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2 Stocks to Consider Buying Before Earnings This Week
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This week’s earnings will be important for investors to get a clearer picture of the outlook for many larger-cap stocks that are crucial to the broader stock market and economy.
With that being said, here are two stocks investors shouldn’t overlook and may want to consider buying going into their fourth-quarter releases.
The first stock investors will want to pay attention to is International Business Machines (IBM - Free Report) which is set to report Q4 earnings on January 25.
Evolving into a cloud and data provider, IBM has shown the ability to manage its bottom line effectively despite a challenging economy and slowing top-line growth.
IBM currently lands a Zacks Rank #3 (Hold) with its current Fiscal year 2022 and Q4 earnings estimate revisions trending higher again despite fiscal 2023 earnings estimates slightly declining.
Image Source: Zacks Investment Research
Q4 Preview: Fourth-quarter earnings estimates have now gone up to $3.60 per share in the last week compared to $3.57 a share, which is a sign that IBM could top bottom-line expectations. This would also represent 7% year-over-year growth from Q4 2021 and round out IBM’s Fiscal 2022 earnings at $9.14 a share, a 15% increase from FY21.
Image Source: Zacks Investment Research
Sales are projected at $15.55 billion for Q4 which would be a -7% decrease from the prior year quarter but shows IBM is making the best of its operating environment. Total sales for FY22 would be $59.39 billion, a -16% YoY decrease with sales at $70.79 billion in 2021.
Earnings ESP: As fore mentioned IBM is expected to top Q4 earnings expectations with an Expected Surprise Prediction of 1.90% as the Zacks Consensus is $3.60 per share and the Most Accurate Consensus is $3.67 a share.
Image Source: Zacks Investment Research
Takeaway: Despite the dip on the top line, IBM’s management seems to be effectively navigating the challenging operating environment as indicated in the company’s earnings. On that note, a Q4 earnings beat and better-than-expected guidance could lead to more upside in IBM stock which is very impressive considering the difficulties higher inflation has inflicted on most tech companies.
Plus, over the last two years, IBM is now up +19% to outperform the S&P 500’s +3% and the Nasdaq’s -17% as the company continues to diversify its business operations.
Another stock investors may want to consider buying this week is United Rentals (URI - Free Report) which is set to report earnings on January 25. As the largest equipment rental company in the world, United Rentals’ stock continues to look very intriguing.
United Rentals’ customer base is loyal and includes construction, industrial, and utility companies that also include municipalities, government agencies, independent contractors, and homeowners among others.
United Rentals currently sports a Zacks Rank #1 (Strong Buy) with earnings estimates trending higher for the company’s current fiscal 2022 and FY23.
Image Source: Zacks Investment Research
Q4 Preview: United Rentals looks poised to have another strong quarter on the bottom line. Fourth quarter earnings are expected to be up 36% YoY at $10.09 per share compared to $7.39 a share in Q4 2021.
This would have United Rentals finishing Fiscal 2022 with earnings up a stellar 48% at $32.60 per share compared to $22.06 per share in 2021.
Image Source: Zacks Investment Research
On the top line, Q4 sales are expected at $3.29 billion, up 18% from the prior year quarter. More impressively United Rentals would post 20% top-line growth for FY22 rounding out the year with sales at $11.64 billion compared to $9.72 billion in 2021.
Earnings ESP: After beating earnings expectations in four consecutive quarters the trend could continue with the Zacks Consensus for URI’s Q4 earnings at $10.09 per share and the Most Accurate Estimate at $10.22 a share. This indicates United Rentals could beat expectations by 1.31%.
Image Source: Zacks Investment Research
Takeaway: The top and bottom line growth for United Rentals has been very impressive and the rising earnings estimate revisions going into Q4 earnings is a sign that URI’s stock could continue its stellar performance, up 26% over the last year and 662% over the last decade to largely outperform the S&P 500.
Bottom Line
IBM and United Rentals are two companies that continue to outperform on their bottom lines and this could lead to more upside in these stocks. Their ability to effectively manage operating costs in a challenging economy and operating environment is very impressive and could separate IBM and URI stock from others in 2023.
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2 Stocks to Consider Buying Before Earnings This Week
This week’s earnings will be important for investors to get a clearer picture of the outlook for many larger-cap stocks that are crucial to the broader stock market and economy.
With that being said, here are two stocks investors shouldn’t overlook and may want to consider buying going into their fourth-quarter releases.
International Business Machines (IBM - Free Report)
The first stock investors will want to pay attention to is International Business Machines (IBM - Free Report) which is set to report Q4 earnings on January 25.
Evolving into a cloud and data provider, IBM has shown the ability to manage its bottom line effectively despite a challenging economy and slowing top-line growth.
IBM currently lands a Zacks Rank #3 (Hold) with its current Fiscal year 2022 and Q4 earnings estimate revisions trending higher again despite fiscal 2023 earnings estimates slightly declining.
Image Source: Zacks Investment Research
Q4 Preview: Fourth-quarter earnings estimates have now gone up to $3.60 per share in the last week compared to $3.57 a share, which is a sign that IBM could top bottom-line expectations. This would also represent 7% year-over-year growth from Q4 2021 and round out IBM’s Fiscal 2022 earnings at $9.14 a share, a 15% increase from FY21.
Image Source: Zacks Investment Research
Sales are projected at $15.55 billion for Q4 which would be a -7% decrease from the prior year quarter but shows IBM is making the best of its operating environment. Total sales for FY22 would be $59.39 billion, a -16% YoY decrease with sales at $70.79 billion in 2021.
Earnings ESP: As fore mentioned IBM is expected to top Q4 earnings expectations with an Expected Surprise Prediction of 1.90% as the Zacks Consensus is $3.60 per share and the Most Accurate Consensus is $3.67 a share.
Image Source: Zacks Investment Research
Takeaway: Despite the dip on the top line, IBM’s management seems to be effectively navigating the challenging operating environment as indicated in the company’s earnings. On that note, a Q4 earnings beat and better-than-expected guidance could lead to more upside in IBM stock which is very impressive considering the difficulties higher inflation has inflicted on most tech companies.
Plus, over the last two years, IBM is now up +19% to outperform the S&P 500’s +3% and the Nasdaq’s -17% as the company continues to diversify its business operations.
United Rentals (URI - Free Report)
Another stock investors may want to consider buying this week is United Rentals (URI - Free Report) which is set to report earnings on January 25. As the largest equipment rental company in the world, United Rentals’ stock continues to look very intriguing.
United Rentals’ customer base is loyal and includes construction, industrial, and utility companies that also include municipalities, government agencies, independent contractors, and homeowners among others.
United Rentals currently sports a Zacks Rank #1 (Strong Buy) with earnings estimates trending higher for the company’s current fiscal 2022 and FY23.
Image Source: Zacks Investment Research
Q4 Preview: United Rentals looks poised to have another strong quarter on the bottom line. Fourth quarter earnings are expected to be up 36% YoY at $10.09 per share compared to $7.39 a share in Q4 2021.
This would have United Rentals finishing Fiscal 2022 with earnings up a stellar 48% at $32.60 per share compared to $22.06 per share in 2021.
Image Source: Zacks Investment Research
On the top line, Q4 sales are expected at $3.29 billion, up 18% from the prior year quarter. More impressively United Rentals would post 20% top-line growth for FY22 rounding out the year with sales at $11.64 billion compared to $9.72 billion in 2021.
Earnings ESP: After beating earnings expectations in four consecutive quarters the trend could continue with the Zacks Consensus for URI’s Q4 earnings at $10.09 per share and the Most Accurate Estimate at $10.22 a share. This indicates United Rentals could beat expectations by 1.31%.
Image Source: Zacks Investment Research
Takeaway: The top and bottom line growth for United Rentals has been very impressive and the rising earnings estimate revisions going into Q4 earnings is a sign that URI’s stock could continue its stellar performance, up 26% over the last year and 662% over the last decade to largely outperform the S&P 500.
Bottom Line
IBM and United Rentals are two companies that continue to outperform on their bottom lines and this could lead to more upside in these stocks. Their ability to effectively manage operating costs in a challenging economy and operating environment is very impressive and could separate IBM and URI stock from others in 2023.