The second-quarter 2022 earnings season is at its early stage and the results are mixed so far. The importation thing is that, as of now, earnings results have not revealed anything that can be considered as an indication of an imminent recession. However, market participants will keenly watch this earnings season as it will provide the most descriptive view of the U.S. corporate health amid record-high inflation and an extremely hawkish Fed.
Next week will be the first big one of this reporting cycle as 892 companies are slated to declare quarterly numbers. We have selected five of them with a favorable Zacks Rank that are poised to beat earnings estimates. These companies are —
EQT Corp. ( EQT Quick Quote EQT - Free Report) , Medpace Holdings Inc. ( MEDP Quick Quote MEDP - Free Report) , Crane Holdings Co. ( CR Quick Quote CR - Free Report) , Zions Bancorporation National Association ( ZION Quick Quote ZION - Free Report) and Hess Corp. ( HES Quick Quote HES - Free Report) . Q2 At a Glance
Like the first quarter, the second quarter of 2022 also remained tough for the U.S. economy. Various measures of inflation remained elevated at a 41-year high. The Fed hiked the benchmark interest rate by 1.25% to the range of 1.5% to 1.75% at the end of the second quarter from 0.25% to 0.50% at the end of the first quarter. Moreover, the central bank has started reducing the size of its $9 trillion balance sheet systematically from June.
Despite these aggressive monetary policies adopted by the Fed, inflation is showing no sign of declining. The latest measure of inflation showed that the consumer price index jumped 9.1% year over year in June, marking the highest monthly rise since November 1981.
The complete devastation of the global supply-chain system and shortage of labor continued to put pressure on businesses in the form of higher input costs and wages. The lingering war between Russia and Ukraine and lockdown in China due to the resurgence of COVID-19 infections were the major hindrances to the restoration of the global supply-chain system.
Q2 Earnings Results So Far
As of Jul 20, 60 companies within the S&P 500 Index reported their financial numbers. Total earnings of these companies are down 11% year over year on 6.6% higher revenues, with 73.3% beating EPS estimates and 63.3% beating revenue estimates. Our latest projection is that for the second quarter as a whole, total earnings of the S&P 500 Index will rise 3.1% year over year on 9.6% higher revenues.
Our Top Picks
Five companies will report second-quarter 2022 earnings results next week. Each of these stocks carries either 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 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 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 Medpace Holdings provides clinical research-based drug and medical device development services in North America, Europe, and Asia. MEDP offers a suite of services supporting the clinical development process from Phase I to IV in various therapeutic areas. Medpace Holdings also provides clinical development services to the pharmaceutical, biotechnology, and medical device industries.
MEDP has an Earnings ESP of +6.23%. It has an expected earnings growth rate of 22.7% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.5% over the last 30 days.
Zacks Rank #1 Medpace Holdings recorded earnings surprises in the last four reported quarters, with an average beat of 17.1%. The company is set to release
earnings results on Jul 25, after the closing bell. Crane Holdings is likely to benefit from its diverse portfolio, efficient management team and strengthening business across segments in the quarters ahead. Rewards to its shareholders and a focus on product innovation raise CR’s appeal.
For 2022, Crane Holdings anticipates adjusted earnings of $7.00-$7.40 per share, implying growth of 10% year over year. For the year, core sales are predicted to grow in the range of 4-6%.
CR has an Earnings ESP of +6.98%. It has an expected earnings growth rate of 14.7% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 30 days.
Zacks Rank #2 Crane Holdings recorded earnings surprises in the last four reported quarters, with an average beat of 22.2%. The company is set to release
earnings results on Jul 25, after the closing bell. Zions Bancorporation provides various banking and related services primarily in the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. ZION is likely to benefit from solid loans and deposit balances and business simplifying efforts. Zions Bancorporation’s strong balance sheet is expected to keep driving efficient capital deployment activities and help in enhancing shareholder value.
ZION has an Earnings ESP of +0.54%. The Zacks Consensus Estimate for current-year earnings improved 3.9% over the last 30 days. Zacks Rank #2 Zions Bancorporation recorded earnings surprises in the last four reported quarters, with an average beat of 20.7%. The company is set to release
earnings results on Jul 26, after the closing bell. Hess is a leading global integrated energy company. HES has made multiple world-class oil discoveries at the Stabroek block, off the coast of Guyana. Hess recently announced three discoveries in the Stabroek block, thereby increasing the block’s gross discovered recoverable resource estimate from 10 billion Boe to 11 billion Boe.
HES anticipates multi-billions of exploration potential to be still left in Guyana. In the Bakken Play, Hess plans to operate a three-rig program, which will enable it to generate significant free cash flows.
HES has an Earnings ESP of +3.73%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 4.7% over the last 7 days.
Zacks Rank #2 Hess recorded earnings surprises in three out of the last four reported quarters, with an average beat of 12.7%. The company is set to release
earnings results on Jul 27, before the opening bell. EQT is a pure-play Appalachian explorer that produces the largest volume of natural gas in the United States. EQT has a huge inventory of drilling locations in the core Appalachian Basin, which can produce significant production volumes.
In the core Marcellus resource, EQT has 1,565 net undeveloped locations, which have brightened the prospects of its natural gas production. Almost 65% of its production in 2022 is hedged, thereby securing the best risk-adjusted upside in natural gas. Also, EQT has lower exposure to debt capital than the industry.
EQT has an Earnings ESP of +16.75%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1.3% over the last 30 days.
Zacks Rank #2 EQT recorded earnings surprises in two out of the last four reported quarters, with an average beat of 93.3%. The company is set to release
earnings results on Jul 27, after the closing bell.
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