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AutoZone, Costco and JPMorgan are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – March 7, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes AutoZone (AZO - Free Report) , Costco (COST - Free Report) and JPMorgan (JPM - Free Report) .
Previewing the Q2 2022 Earnings Season
The ongoing Ukraine crisis adds to the market’s existing worries about inflation and supply-chain challenges that have been recurring themes in recent months. The addition of geopolitical tensions to the mix has direct implications for the inflation outlook through higher prices for energy and other commodities.
We knew all along that earnings growth was expected to decelerate significantly in the current and coming quarters, after remaining very strong in the preceding periods. But the outlook for earnings had started easing even before the recent geopolitical developments. We saw this in the revisions trend, which had been mixed at best.
The expectation currently is for 2022 Q1 earnings to be up +3.7% from the same period last year on +9.6% higher revenues. In other words, current bottom-up estimates reflect compression in margins, which is in line with the aforementioned inflationary trends.
Estimates for the Energy sector have been positive, reflecting the rise in oil prices. Had it not been for the positive revisions to the Energy sector, the overall revisions trend for Q1 would be negative. In fact, Q1 earnings growth for the S&P 500 index would be -1.1% on an ex-Energy basis.
For Q1, margins are expected to be below the year-earlier level for 9 of the 16 Zacks sectors, with strong margin gains for three sectors (Energy, Transportation and Basic Materials).
As you can see in the table above, the growth picture has shifted materially for the Finance and Technology sectors, the two biggest earnings contributors to the index. Total Finance sector earnings are expected to be down -16.9% from the same period last year on +2.4% higher revenues, while Tech sector earnings are expected to be down -0.7% in Q1 on +7.5% higher revenues.
The Q1 Earnings Season Scorecard
The Q1 earnings season will really get going when the big banks start reporting their March-quarter results in mid-April. But the early reports have come out already. In fact, the AutoZone and Costco reports in recent days for their fiscal quarters ending in February qualify as early Q1 reports.
We will have seen such Q1 results from almost two dozen S&P 500 members by the time JPMorgan comes out with quarterly results on April 13th.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> Looking Ahead to the 2022 Q1 Earnings Season
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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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AutoZone, Costco and JPMorgan are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – March 7, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes AutoZone (AZO - Free Report) , Costco (COST - Free Report) and JPMorgan (JPM - Free Report) .
Previewing the Q2 2022 Earnings Season
The ongoing Ukraine crisis adds to the market’s existing worries about inflation and supply-chain challenges that have been recurring themes in recent months. The addition of geopolitical tensions to the mix has direct implications for the inflation outlook through higher prices for energy and other commodities.
We knew all along that earnings growth was expected to decelerate significantly in the current and coming quarters, after remaining very strong in the preceding periods. But the outlook for earnings had started easing even before the recent geopolitical developments. We saw this in the revisions trend, which had been mixed at best.
The expectation currently is for 2022 Q1 earnings to be up +3.7% from the same period last year on +9.6% higher revenues. In other words, current bottom-up estimates reflect compression in margins, which is in line with the aforementioned inflationary trends.
Estimates for the Energy sector have been positive, reflecting the rise in oil prices. Had it not been for the positive revisions to the Energy sector, the overall revisions trend for Q1 would be negative. In fact, Q1 earnings growth for the S&P 500 index would be -1.1% on an ex-Energy basis.
For Q1, margins are expected to be below the year-earlier level for 9 of the 16 Zacks sectors, with strong margin gains for three sectors (Energy, Transportation and Basic Materials).
As you can see in the table above, the growth picture has shifted materially for the Finance and Technology sectors, the two biggest earnings contributors to the index. Total Finance sector earnings are expected to be down -16.9% from the same period last year on +2.4% higher revenues, while Tech sector earnings are expected to be down -0.7% in Q1 on +7.5% higher revenues.
The Q1 Earnings Season Scorecard
The Q1 earnings season will really get going when the big banks start reporting their March-quarter results in mid-April. But the early reports have come out already. In fact, the AutoZone and Costco reports in recent days for their fiscal quarters ending in February qualify as early Q1 reports.
We will have seen such Q1 results from almost two dozen S&P 500 members by the time JPMorgan comes out with quarterly results on April 13th.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> Looking Ahead to the 2022 Q1 Earnings Season
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
See Stocks Now >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.