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5 Stocks Likely to Gain From Earnings Results This Week
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We are in the last leg of the first-quarter 2022 earnings session. This is the last important week of for this reporting cycle. So far, earnings are better than expected although some major corporates have issued a weak outlook. Earnings results of corporate America are returning to normalcy after last year’s astonishing growth due to pandemic-led favorable comparisons.
Several major corporates are slated to announce their quarterly numbers this month. A handful has the potential to beat earnings estimates, which should help stock prices going forward. Five of them are — The Home Depot Inc. (HD - Free Report) , Keysight Technologies Inc. (KEYS - Free Report) , BJ's Wholesale Club Holdings Inc. (BJ - Free Report) , Lowe's Companies Inc. (LOW - Free Report) and CAE Inc. (CAE - Free Report) .
Strong First-Quarter Earnings Results So Far
As of May 13, 459 S&P 500 companies reported earnings results. Year over year, the total earnings of these companies are up 9.9% on 14.8% higher revenues. Moreover, 78.4% of these companies beat earnings estimates and 74.9% beat revenue estimates.
For the first quarter, total earnings of the S&P 500 Index are currently expected to be up 9.3% year over year on 13.3% higher revenues. The current estimate witnessed a significant improvement from 4.3% year-over-year earnings on 10% higher revenues estimated at the beginning of the reporting cycle.
Our research shows that for stocks with the combination of a Zacks Rank #3 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 their 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 our five picks in the last quarter.
Image Source: Zacks Investment Research
The Home Depot has gained from strong demand for home-improvement projects, robust housing market trends and ongoing investments. HD also benefited from continued strength in both Pro and DIY categories as well as digital momentum. HD’s interconnected retail strategy and underlying technology infrastructure have helped to consistently boost web traffic for the past few quarters, aiding digital sales.
The Home Depot has an Earnings ESP of +0.90%. It has an expected earnings growth rate of 2.9% for the current year (January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.1% over the last 7 days.
The Home Depot recorded earnings surprises in the last four reported quarters, with an average beat of 11.1%. The company is set to release earnings results on May 17, before the opening bell.
Lowe's Companies remains well positioned to capitalize on demand for the home improvement market, backed by investments in technology, merchandise category and strength in Pro business. LOW benefited from the strong execution of strategies, including the Total Home strategy. The Total Home strategy has been resonating well with Pro and DIY customers for a while.
Focus on driving productivity helped Lowe's Companies boost margins. Sales at Lowes.com have increased substantially. Management is committed to enhancing the Pro offerings, expanding LOW’s market share and driving the operating margin.
Lowe's Companies has an Earnings ESP of +1.13%. It has an expected earnings growth rate of 11% for the current year (January 2023). LOW recorded earnings surprises in the last four reported quarters, with an average beat of 12.9%. The company is set to release earnings results on May 18, before the opening bell.
Keysight Technologies is witnessing growth in both Communications Solutions Group and Electronic Industrial Solutions Group. KEYS is likely to gain from solid demand for semiconductor measurement solutions, as semiconductor companies are increasingly developing chips based on process technology.
Accelerated 5G deployments, 6G-related research applications and investments in 400G/ 800G Ethernet for data centers bode well for Keysight Technologies. Moreover, rising demand for power management applications is the key catalyst for growth.
KEYS has an Earnings ESP of +0.48%. It has an expected earnings growth rate of 13.2% for the current year (October 2022). Keysight Technologies recorded earnings surprises in the last four reported quarters, with an average beat of 7.5%. The company is set to release earnings results on May 17, after the closing bell.
BJ's Wholesale Club continued to register growth in total comparable club sales and digitally-enabled sales. Sturdy membership trends, assortment initiatives, enhanced digital capabilities and robust real estate pipeline are likely to help sustain stellar growth of BJ.
BJ’s Wholesale Club foresees merchandise comparable club sales to increase in the low single-digit range and net sales to rise in the mid-single-digit range in fiscal 2022 with merchandise margins likely to remain flat.
BJ has an Earnings ESP of +5.04%. It has an expected earnings growth rate of 0.6% for the current year (January 2023). BJ’s Wholesale Club recorded earnings surprises in the last four reported quarters, with an average beat of 17.9%. The company is set to release earnings results on May 19, before the opening bell.
CAE is a world leader in providing simulation and modelling technologies, and integrated training services to the civil aviation industry and defence forces around the globe. CAE designs, manufactures and supplies simulation equipment and offers training and services.
CAE’s offerings include integrated modelling, simulation and training solutions for commercial airlines, business aircraft operators, aircraft manufacturers and military organizations and a global network of training centres for pilots, and in some instances, cabin crew and maintenance workers.
CAE has an Earnings ESP of +11.11%. It has an expected earnings growth rate of 50.2% for the current year (March 2023). The company recorded earnings surprises in three out of the last four reported quarters, with an average beat of 0.7%. CAE is set to release earnings results on May 19, before the opening bell.
Image: Bigstock
5 Stocks Likely to Gain From Earnings Results This Week
We are in the last leg of the first-quarter 2022 earnings session. This is the last important week of for this reporting cycle. So far, earnings are better than expected although some major corporates have issued a weak outlook. Earnings results of corporate America are returning to normalcy after last year’s astonishing growth due to pandemic-led favorable comparisons.
Several major corporates are slated to announce their quarterly numbers this month. A handful has the potential to beat earnings estimates, which should help stock prices going forward. Five of them are — The Home Depot Inc. (HD - Free Report) , Keysight Technologies Inc. (KEYS - Free Report) , BJ's Wholesale Club Holdings Inc. (BJ - Free Report) , Lowe's Companies Inc. (LOW - Free Report) and CAE Inc. (CAE - Free Report) .
Strong First-Quarter Earnings Results So Far
As of May 13, 459 S&P 500 companies reported earnings results. Year over year, the total earnings of these companies are up 9.9% on 14.8% higher revenues. Moreover, 78.4% of these companies beat earnings estimates and 74.9% beat revenue estimates.
For the first quarter, total earnings of the S&P 500 Index are currently expected to be up 9.3% year over year on 13.3% higher revenues. The current estimate witnessed a significant improvement from 4.3% year-over-year earnings on 10% higher revenues estimated at the beginning of the reporting cycle.
Our Top Picks
Five big companies will report 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 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 their 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 our five picks in the last quarter.
Image Source: Zacks Investment Research
The Home Depot has gained from strong demand for home-improvement projects, robust housing market trends and ongoing investments. HD also benefited from continued strength in both Pro and DIY categories as well as digital momentum. HD’s interconnected retail strategy and underlying technology infrastructure have helped to consistently boost web traffic for the past few quarters, aiding digital sales.
The Home Depot has an Earnings ESP of +0.90%. It has an expected earnings growth rate of 2.9% for the current year (January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.1% over the last 7 days.
The Home Depot recorded earnings surprises in the last four reported quarters, with an average beat of 11.1%. The company is set to release earnings results on May 17, before the opening bell.
Lowe's Companies remains well positioned to capitalize on demand for the home improvement market, backed by investments in technology, merchandise category and strength in Pro business. LOW benefited from the strong execution of strategies, including the Total Home strategy. The Total Home strategy has been resonating well with Pro and DIY customers for a while.
Focus on driving productivity helped Lowe's Companies boost margins. Sales at Lowes.com have increased substantially. Management is committed to enhancing the Pro offerings, expanding LOW’s market share and driving the operating margin.
Lowe's Companies has an Earnings ESP of +1.13%. It has an expected earnings growth rate of 11% for the current year (January 2023). LOW recorded earnings surprises in the last four reported quarters, with an average beat of 12.9%. The company is set to release earnings results on May 18, before the opening bell.
Keysight Technologies is witnessing growth in both Communications Solutions Group and Electronic Industrial Solutions Group. KEYS is likely to gain from solid demand for semiconductor measurement solutions, as semiconductor companies are increasingly developing chips based on process technology.
Accelerated 5G deployments, 6G-related research applications and investments in 400G/ 800G Ethernet for data centers bode well for Keysight Technologies. Moreover, rising demand for power management applications is the key catalyst for growth.
KEYS has an Earnings ESP of +0.48%. It has an expected earnings growth rate of 13.2% for the current year (October 2022). Keysight Technologies recorded earnings surprises in the last four reported quarters, with an average beat of 7.5%. The company is set to release earnings results on May 17, after the closing bell.
BJ's Wholesale Club continued to register growth in total comparable club sales and digitally-enabled sales. Sturdy membership trends, assortment initiatives, enhanced digital capabilities and robust real estate pipeline are likely to help sustain stellar growth of BJ.
BJ’s Wholesale Club foresees merchandise comparable club sales to increase in the low single-digit range and net sales to rise in the mid-single-digit range in fiscal 2022 with merchandise margins likely to remain flat.
BJ has an Earnings ESP of +5.04%. It has an expected earnings growth rate of 0.6% for the current year (January 2023). BJ’s Wholesale Club recorded earnings surprises in the last four reported quarters, with an average beat of 17.9%. The company is set to release earnings results on May 19, before the opening bell.
CAE is a world leader in providing simulation and modelling technologies, and integrated training services to the civil aviation industry and defence forces around the globe. CAE designs, manufactures and supplies simulation equipment and offers training and services.
CAE’s offerings include integrated modelling, simulation and training solutions for commercial airlines, business aircraft operators, aircraft manufacturers and military organizations and a global network of training centres for pilots, and in some instances, cabin crew and maintenance workers.
CAE has an Earnings ESP of +11.11%. It has an expected earnings growth rate of 50.2% for the current year (March 2023). The company recorded earnings surprises in three out of the last four reported quarters, with an average beat of 0.7%. CAE is set to release earnings results on May 19, before the opening bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.