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The Zacks Analyst Blog Highlights: Ally Financial, Texas Instruments, Graco, Dow and Watsco
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For Immediate Release
Chicago, IL – July 19, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ally Financial Inc. (ALLY - Free Report) , Texas Instruments Inc. (TXN - Free Report) , Graco Inc. (GGG - Free Report) , Dow Inc. (DOW - Free Report) and Watsco Inc. (WSO - Free Report) .
Here are highlights from Friday’s Analyst Blog:
5 Large-Cap Stocks to Buy Ahead of Earnings This Week
The second-quarter 2021 earnings season has started with most of the major banks reporting their financial numbers this week. Although at an initial stage, the earnings season has been impressive so far. Wall Street will be busy analyzing results in the next one month or so as market participants have high expectations for second-quarter earnings.
More than 330 companies will report earnings next week. Out of these, we have narrowed down our search to five large-cap (market capital >$10 billion) companies that are poised to beat on second-quarter earnings. Investment in these stocks may be fruitful going forward.
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 did not affect economic activities as the Fed repeatedly reiterated that the inflation is transitory.
U.S. manufacturing is firing on all cylinders, and of late, the services sector has been thriving. Consumer spending, the largest driver of the GDP, remains strong, buoyed by around $2.6 trillion of forced savings. The labor market is settling down gradually. In the second quarter, consumer satisfaction optimization indexes remained elevated. Consequently, businesses also expanded their scale of operations.
Q2 Earnings Season So Far
The second-quarter earnings season has been impressive thus far. As of Jul 14, 30 companies of the S&P 500 Index reported results. Total earnings of these companies were up 244.3% year over year on 14.2% higher revenues. Moreover, 90% of these companies beat both earnings per share (EPS) and revenue estimates.
For the second quarter as a whole, total earnings of the S&P 500 Index are expected to be up 67.7% year over year on 19.1% higher revenues. This indicates an improvement over last week's projection of EPS increasing 62.2% from the same period last year on 18.2% higher revenues.
These estimates are impressive primarily because second-quarter 2020 witnessed lockdowns owing to the global outbreak of the deadly coronavirus.
Notwithstanding favorable comparisons with last year, second-quarter 2021 earnings estimates indicate genuine growth of more than 10% from the pre-pandemic second-quarter 2019. In fact, earnings estimates for 2021 have been growing steadily since the beginning of this year. (Read more: Strong Start to Q2 Earnings Season)
Our Top Picks
The five large-cap companies discussed herein are slated to release second-quarter results next week. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that for stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, 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.
Ally Financial provides various financial products and services to consumers, businesses, automotive dealers, and corporate customers primarily in the United States and Canada. It operates through the Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments.
This Zacks Rank #2 company has an Earnings ESP of +6.64%. Ally Financial has an expected earnings growth rate of more than 100% for the current year. It recorded an earnings surprise in the last four reported quarters, with an average beat of 4.6%. The company is set to release earnings on Jul 20, before the opening bell.
Texas Instruments designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates in two segments, Analog and Embedded Processing. This Zacks Rank #2 company has an Earnings ESP of +1.60%.
Texas Instruments has an expected earnings growth rate of 24.3% for the current year. The Zacks Consensus Estimate for the current year has improved 0.4% over the past 30 days. It recorded an earnings surprise in the last four reported quarters, with the average beat being 34.1%. The company is set to release earnings on Jul 21, after the closing bell.
Graco designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. This Zacks Rank #2 company has an Earnings ESP of +7.31%.
Graco has an expected earnings growth rate of 26.7% for the current year. It recorded an earnings surprise in each of the last four reported quarters, with an average beat of 28.3%. The company is set to release earnings on Jul 21, after the closing bell.
Dow provides various materials science solutions for consumer care, infrastructure, and packaging markets in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It operates through Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials and Coatings segments.
This Zacks Rank #1 company has an Earnings ESP of +2.30%. Dow has an expected earnings growth rate of 34.7% for the current year. The Zacks Consensus Estimate for the current year has improved 4.8% over the past seven days. It recorded an earnings surprise in each of the last four reported quarters, with the average beat being 26.5%. The company is set to release earnings on Jul 22, before the opening bell.
Watsco is the largest distributor of heating, ventilation and air conditioning equipment, as well as related parts and supplies in the United States, Canada, Mexico, and Puerto Rico. This Zacks Rank #2 company has an Earnings ESP of +9.61%.
Watsco has an expected earnings growth rate of 26% for the current year. The Zacks Consensus Estimate for the current year has improved 0.5% over the past seven days. It delivered earnings surprises in the last four reported quarters, with the average being 23.3%. The company is set to release results on Jul 22, before the opening bell.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Ally Financial, Texas Instruments, Graco, Dow and Watsco
For Immediate Release
Chicago, IL – July 19, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ally Financial Inc. (ALLY - Free Report) , Texas Instruments Inc. (TXN - Free Report) , Graco Inc. (GGG - Free Report) , Dow Inc. (DOW - Free Report) and Watsco Inc. (WSO - Free Report) .
Here are highlights from Friday’s Analyst Blog:
5 Large-Cap Stocks to Buy Ahead of Earnings This Week
The second-quarter 2021 earnings season has started with most of the major banks reporting their financial numbers this week. Although at an initial stage, the earnings season has been impressive so far. Wall Street will be busy analyzing results in the next one month or so as market participants have high expectations for second-quarter earnings.
More than 330 companies will report earnings next week. Out of these, we have narrowed down our search to five large-cap (market capital >$10 billion) companies that are poised to beat on second-quarter earnings. Investment in these stocks may be fruitful going forward.
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 did not affect economic activities as the Fed repeatedly reiterated that the inflation is transitory.
U.S. manufacturing is firing on all cylinders, and of late, the services sector has been thriving. Consumer spending, the largest driver of the GDP, remains strong, buoyed by around $2.6 trillion of forced savings. The labor market is settling down gradually. In the second quarter, consumer satisfaction optimization indexes remained elevated. Consequently, businesses also expanded their scale of operations.
Q2 Earnings Season So Far
The second-quarter earnings season has been impressive thus far. As of Jul 14, 30 companies of the S&P 500 Index reported results. Total earnings of these companies were up 244.3% year over year on 14.2% higher revenues. Moreover, 90% of these companies beat both earnings per share (EPS) and revenue estimates.
For the second quarter as a whole, total earnings of the S&P 500 Index are expected to be up 67.7% year over year on 19.1% higher revenues. This indicates an improvement over last week's projection of EPS increasing 62.2% from the same period last year on 18.2% higher revenues.
These estimates are impressive primarily because second-quarter 2020 witnessed lockdowns owing to the global outbreak of the deadly coronavirus.
Notwithstanding favorable comparisons with last year, second-quarter 2021 earnings estimates indicate genuine growth of more than 10% from the pre-pandemic second-quarter 2019. In fact, earnings estimates for 2021 have been growing steadily since the beginning of this year. (Read more: Strong Start to Q2 Earnings Season)
Our Top Picks
The five large-cap companies discussed herein are slated to release second-quarter results next week. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that for stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, 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.
Ally Financial provides various financial products and services to consumers, businesses, automotive dealers, and corporate customers primarily in the United States and Canada. It operates through the Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments.
This Zacks Rank #2 company has an Earnings ESP of +6.64%. Ally Financial has an expected earnings growth rate of more than 100% for the current year. It recorded an earnings surprise in the last four reported quarters, with an average beat of 4.6%. The company is set to release earnings on Jul 20, before the opening bell.
Texas Instruments designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates in two segments, Analog and Embedded Processing. This Zacks Rank #2 company has an Earnings ESP of +1.60%.
Texas Instruments has an expected earnings growth rate of 24.3% for the current year. The Zacks Consensus Estimate for the current year has improved 0.4% over the past 30 days. It recorded an earnings surprise in the last four reported quarters, with the average beat being 34.1%. The company is set to release earnings on Jul 21, after the closing bell.
Graco designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. This Zacks Rank #2 company has an Earnings ESP of +7.31%.
Graco has an expected earnings growth rate of 26.7% for the current year. It recorded an earnings surprise in each of the last four reported quarters, with an average beat of 28.3%. The company is set to release earnings on Jul 21, after the closing bell.
Dow provides various materials science solutions for consumer care, infrastructure, and packaging markets in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It operates through Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials and Coatings segments.
This Zacks Rank #1 company has an Earnings ESP of +2.30%. Dow has an expected earnings growth rate of 34.7% for the current year. The Zacks Consensus Estimate for the current year has improved 4.8% over the past seven days. It recorded an earnings surprise in each of the last four reported quarters, with the average beat being 26.5%. The company is set to release earnings on Jul 22, before the opening bell.
Watsco is the largest distributor of heating, ventilation and air conditioning equipment, as well as related parts and supplies in the United States, Canada, Mexico, and Puerto Rico. This Zacks Rank #2 company has an Earnings ESP of +9.61%.
Watsco has an expected earnings growth rate of 26% for the current year. The Zacks Consensus Estimate for the current year has improved 0.5% over the past seven days. It delivered earnings surprises in the last four reported quarters, with the average being 23.3%. The company is set to release results on Jul 22, before the opening bell.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.