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5 Corporate Giants Likely to Gain From Q2 Earnings This Week
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Wall Street is gearing up to kick start the second-quarter 2021 earnings season this week. Market participants have high expectations from this earnings season as overall earnings of corporate America are likely to skyrocket.
As of Jul 9, total second-quarter earnings of the market's benchmark — the S&P 500 Index — are projected to jump 62.2% from the same period last year on 18.2% higher revenues, following 49.3% year-over-year earnings growth on 10.3% higher revenues in first-quarter 2021. Second-quarter 2021 earnings estimates have shown steady improvements since the beginning of this year.
These estimates are impressive primarily because second-quarter 2020 was under lockdown owing to the global outbreak of the deadly coronavirus. Notwithstanding favorable comparisons with last year, second-quarter 2021 earnings estimates reflect genuine growth, climbing 9.9% from the pre-pandemic second-quarter 2019.
Q2 2021 At a Glance
The U.S. economy witnessed a robust recovery from the pandemic-led devastations in the second quarter. Nationwide deployment of COVID-19 vaccines on a priority basis, massive fiscal stimulus and the continuation of easy money policies by the Fed resulted in a faster-than-expected reopening of the economy.
Strong pent-up demand supported by record-high personal savings, labor shortage and supply-chain disruptions resulted in a spike in inflation. However, higher inflation has not affected economic activities so far as the Fed repeatedly reiterated that inflation is transitory.
Most parts of the economy are already open and businesses are gradually expanding their scale of operations supported by surging demand. The second quarter of 2021 was extremely favorable for mergers and acquisitions (M&A) and initial public offerings ("IPO"). Solid economic and capital market activities bode well for financial institutions, especially the major banks.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of five stocks in the last quarter.
Image Source: Zacks Investment Research
The Goldman Sachs Group Inc. (GS - Free Report) has an Earnings ESP of +1.53%. The company has an expected earnings growth rate of 82.6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.8% over the last 7 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 73.5%. The company has a current dividend yield of 1.35% and is set to release earnings results on Jul 13, before the opening bell.
PepsiCo Inc. (PEP - Free Report) has an Earnings ESP of +0.33%. The company has an expected earnings growth rate of 9.6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.3% over the last 90 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 6.8%. The company has a current dividend yield of 2.88% and is set to release earnings results on Jul 13, before the opening bell.
Bank of America Corp. (BAC - Free Report) has an Earnings ESP of +0.65%. The company has an expected earnings growth rate of 66.3% for the current year. The Zacks Consensus Estimate for the current year has improved 0.3% over the last 7 days. It posted positive earnings surprises in three out of the last four reported quarters, with an average beat of 16.5%. The company has a current dividend yield of 1.8% and is set to release earnings results on Jul 14, before the opening bell.
BlackRock Inc. (BLK - Free Report) has an Earnings ESP of +1.42%. The company has an expected earnings growth rate of 9.7% for the current year. The Zacks Consensus Estimate for the current year has improved 0.8% over the last 7 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 11.1%. The company has a current dividend yield of 1.83% and is set to release earnings results on Jul 14, before the opening bell.
Morgan Stanley (MS - Free Report) has an Earnings ESP of +0.35%. The company has an expected earnings growth rate of 7.6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.4% over the last 7 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 44.6%. The company has a current dividend yield of 1.55% and is set to release earnings results on Jul 15, before the opening bell.
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5 Corporate Giants Likely to Gain From Q2 Earnings This Week
Wall Street is gearing up to kick start the second-quarter 2021 earnings season this week. Market participants have high expectations from this earnings season as overall earnings of corporate America are likely to skyrocket.
As of Jul 9, total second-quarter earnings of the market's benchmark — the S&P 500 Index — are projected to jump 62.2% from the same period last year on 18.2% higher revenues, following 49.3% year-over-year earnings growth on 10.3% higher revenues in first-quarter 2021. Second-quarter 2021 earnings estimates have shown steady improvements since the beginning of this year.
These estimates are impressive primarily because second-quarter 2020 was under lockdown owing to the global outbreak of the deadly coronavirus. Notwithstanding favorable comparisons with last year, second-quarter 2021 earnings estimates reflect genuine growth, climbing 9.9% from the pre-pandemic second-quarter 2019.
Q2 2021 At a Glance
The U.S. economy witnessed a robust recovery from the pandemic-led devastations in the second quarter. Nationwide deployment of COVID-19 vaccines on a priority basis, massive fiscal stimulus and the continuation of easy money policies by the Fed resulted in a faster-than-expected reopening of the economy.
Strong pent-up demand supported by record-high personal savings, labor shortage and supply-chain disruptions resulted in a spike in inflation. However, higher inflation has not affected economic activities so far as the Fed repeatedly reiterated that inflation is transitory.
Most parts of the economy are already open and businesses are gradually expanding their scale of operations supported by surging demand. The second quarter of 2021 was extremely favorable for mergers and acquisitions (M&A) and initial public offerings ("IPO"). Solid economic and capital market activities bode well for financial institutions, especially the major banks.
Stocks in Focus
Five corporate behemoths (market capital > $100 billion) are slated to release second-quarter earnings results this week. Each of these stocks carries a Zacks Rank#3 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of five stocks in the last quarter.
Image Source: Zacks Investment Research
The Goldman Sachs Group Inc. (GS - Free Report) has an Earnings ESP of +1.53%. The company has an expected earnings growth rate of 82.6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.8% over the last 7 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 73.5%. The company has a current dividend yield of 1.35% and is set to release earnings results on Jul 13, before the opening bell.
PepsiCo Inc. (PEP - Free Report) has an Earnings ESP of +0.33%. The company has an expected earnings growth rate of 9.6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.3% over the last 90 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 6.8%. The company has a current dividend yield of 2.88% and is set to release earnings results on Jul 13, before the opening bell.
Bank of America Corp. (BAC - Free Report) has an Earnings ESP of +0.65%. The company has an expected earnings growth rate of 66.3% for the current year. The Zacks Consensus Estimate for the current year has improved 0.3% over the last 7 days. It posted positive earnings surprises in three out of the last four reported quarters, with an average beat of 16.5%. The company has a current dividend yield of 1.8% and is set to release earnings results on Jul 14, before the opening bell.
BlackRock Inc. (BLK - Free Report) has an Earnings ESP of +1.42%. The company has an expected earnings growth rate of 9.7% for the current year. The Zacks Consensus Estimate for the current year has improved 0.8% over the last 7 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 11.1%. The company has a current dividend yield of 1.83% and is set to release earnings results on Jul 14, before the opening bell.
Morgan Stanley (MS - Free Report) has an Earnings ESP of +0.35%. The company has an expected earnings growth rate of 7.6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.4% over the last 7 days. It recorded positive earnings surprises in the last four reported quarters, with an average beat of 44.6%. The company has a current dividend yield of 1.55% and is set to release earnings results on Jul 15, before the opening bell.