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5 S&P 500 Stocks to Buy Ahead of Earnings Next Week
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The fourth-quarter 2022 earnings season is gradually gaining momentum with 534 companies slated to report their financial numbers next week. This earnings season will be important as market participants will closely monitor any sign of earnings, revenues or margin decline.
Several S&P 500 companies will report next week. We have selected five companies from the stable with a favorable Zacks Rank that are set to beat earnings estimates. The combination of a favorable Zacks Rank and a possible earnings beat should drive their stock prices in the near-term. These companies are - Juniper Networks Inc. (JNPR - Free Report) , MSCI Inc. (MSCI - Free Report) , IDEX Corp. (IEX - Free Report) , Hologic Inc. (HOLX - Free Report) and Air Products and Chemicals Inc. (APD - Free Report) .
S&P 500 in Q4 2022
Wall Street wrapped up 2022 as the worst year since 2008, terminating a three-year winning streak. Major stock indexes suffered a bloody blow last year. The S&P 500 Index tumbled 19.4% year over year and more than 20% from its all-time high.
However, in fourth-quarter 2022, the S&P 500 Index gained 7.1%. Peak inflation seems behind us. Less-than-expected inflation rates in October, November and December with respect to several measures and an unexpected drop in wage rate in December and November have clearly indicated this.
A devastated housing market owing to a high mortgage rate, disappointing retail sales in December, the peak festive season, huge inventory accumulation by several retailers and a sharp fall in U.S. manufacturing and services activities indicated that the U.S. economy is cooling in the desired direction of the Fed.
Q4 2022 Earnings Results So Far
As of Jan 25, 96 S&P 500 companies reported their earnings results. Total earnings of these companies are down 6% year over year on 5.5% higher revenues with 71.9% beating EPS estimates and 67.7% beating revenue estimates. Our current projection shows that for fourth-quarter 2022, total earnings of the S&P 500 Index as a whole are expected to decline 7.2% year over year on 3.9% higher revenues.
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
MSCI is benefiting from solid growth in recurring subscriptions. MSCI is gaining strong demand for custom and factor index modules, recurring revenue business models, and the growing adoption of its ESG and Climate solutions in the investment process. Its expanding portfolio of real asset solutions is noteworthy.
Acquisitions have enhanced MSCI’s ability to provide climate-risk assessment and assist investors with climate-risk disclosure requirements. MSCI’s new portfolio footprinting tool has extended climate analysis to municipal bonds and securitized products. Moreover, strong traction from client segments like wealth management, banks and hedge funds is a positive.
MSCI has an Earnings ESP of +0.76%. It has an expected earnings growth rate of 12.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
MSCI recorded earnings surprises in three out of the last four reported quarters, with an average beat of 3.7%. The company is set to release earnings results on Jan 26, before the opening bell.
Juniper Networks is witnessing strong momentum across its core industry verticals and is confident of its long-term prospects. JNPR has made significant changes to the go-to-market structure to better align sales strategies to each of its core customer verticals.
Our estimates show that revenues are likely to grow by mid-single digit in 2023 on healthy demand trends. The acquisition of WiteSand has brought a skilled engineering team to JNPR, which boosts its efforts to deliver an innovative NAC solution as part of its AI-driven enterprise portfolio.
Juniper Networks has an Earnings ESP of +1.89%. It has an expected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 90 days.
JNPR recorded earnings surprises in two out of the last four reported quarters, with an average beat of 3%. The company is set to release earnings results on Jan 31, after the closing bell.
IDEX is poised to gain from a diversified business structure, solid product portfolio, strengthening end markets and buyouts. The Muon Group acquisition expands IEX’s growing platform of precision technology business. Steady demand in the industrial end market with strength in energy, mining and infrastructure markets will be beneficial for the Fluid & Metering Technologies unit. For 2022, IEX expects adjusted earnings of $8.04-$8.09 per share, implying a rise from $6.30 in 2021.
IDEX has an Earnings ESP of +2.96%. It has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last seven days.
IEX recorded earnings surprises in three out of the last four reported quarters, with an average beat of 5.7%. The company is set to release earnings results on Jan 31, after the closing bell.
Hologic delivered better-than-expected revenues and earnings for the fourth quarter of fiscal 2022. Both molecular diagnostics and surgical businesses grew strong. Excluding COVID impact, molecular diagnostics business grew primarily on more assays being run through HOLX’s expanded Panther installed base. GYN Surgical business of HOLX grew nearly 9% organically as the company registered procedural volumes return as well as acceleration from the new business lines.
Hologic has an Earnings ESP of +6.37%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days. HOLX recorded earnings surprises in the last four reported quarters, with an average beat of 46.1%. The company is set to release earnings results on Feb 1, after the closing bell.
Air Products and Chemicals is expected to benefit from strategic investments in high-return projects, new business deals and acquisitions in fiscal 2023. Also, APD is committed maximizing returns to shareholders leveraging strong cash flows. APD will also benefit from productivity actions. The acquisition of PBF Energy plants is also contributing to its results.
Air Products and Chemicals has an Earnings ESP of +2.67%. It has an expected earnings growth rate of 9.7% for the current year (ending September 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
APD recorded earnings surprises in the last four reported quarters, with an average beat of 1.7%. The company is set to release earnings results on Feb 2, before the opening bell.
Image: Bigstock
5 S&P 500 Stocks to Buy Ahead of Earnings Next Week
The fourth-quarter 2022 earnings season is gradually gaining momentum with 534 companies slated to report their financial numbers next week. This earnings season will be important as market participants will closely monitor any sign of earnings, revenues or margin decline.
Several S&P 500 companies will report next week. We have selected five companies from the stable with a favorable Zacks Rank that are set to beat earnings estimates. The combination of a favorable Zacks Rank and a possible earnings beat should drive their stock prices in the near-term. These companies are - Juniper Networks Inc. (JNPR - Free Report) , MSCI Inc. (MSCI - Free Report) , IDEX Corp. (IEX - Free Report) , Hologic Inc. (HOLX - Free Report) and Air Products and Chemicals Inc. (APD - Free Report) .
S&P 500 in Q4 2022
Wall Street wrapped up 2022 as the worst year since 2008, terminating a three-year winning streak. Major stock indexes suffered a bloody blow last year. The S&P 500 Index tumbled 19.4% year over year and more than 20% from its all-time high.
However, in fourth-quarter 2022, the S&P 500 Index gained 7.1%. Peak inflation seems behind us. Less-than-expected inflation rates in October, November and December with respect to several measures and an unexpected drop in wage rate in December and November have clearly indicated this.
A devastated housing market owing to a high mortgage rate, disappointing retail sales in December, the peak festive season, huge inventory accumulation by several retailers and a sharp fall in U.S. manufacturing and services activities indicated that the U.S. economy is cooling in the desired direction of the Fed.
Q4 2022 Earnings Results So Far
As of Jan 25, 96 S&P 500 companies reported their earnings results. Total earnings of these companies are down 6% year over year on 5.5% higher revenues with 71.9% beating EPS estimates and 67.7% beating revenue estimates. Our current projection shows that for fourth-quarter 2022, total earnings of the S&P 500 Index as a whole are expected to decline 7.2% year over year on 3.9% higher revenues.
Our Top Picks
Five S&P 500 companies are set to beat earnings estimates next week. Each of these stocks carries a Zacks Rank #2 (Buy) 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 (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
MSCI is benefiting from solid growth in recurring subscriptions. MSCI is gaining strong demand for custom and factor index modules, recurring revenue business models, and the growing adoption of its ESG and Climate solutions in the investment process. Its expanding portfolio of real asset solutions is noteworthy.
Acquisitions have enhanced MSCI’s ability to provide climate-risk assessment and assist investors with climate-risk disclosure requirements. MSCI’s new portfolio footprinting tool has extended climate analysis to municipal bonds and securitized products. Moreover, strong traction from client segments like wealth management, banks and hedge funds is a positive.
MSCI has an Earnings ESP of +0.76%. It has an expected earnings growth rate of 12.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
MSCI recorded earnings surprises in three out of the last four reported quarters, with an average beat of 3.7%. The company is set to release earnings results on Jan 26, before the opening bell.
Juniper Networks is witnessing strong momentum across its core industry verticals and is confident of its long-term prospects. JNPR has made significant changes to the go-to-market structure to better align sales strategies to each of its core customer verticals.
Our estimates show that revenues are likely to grow by mid-single digit in 2023 on healthy demand trends. The acquisition of WiteSand has brought a skilled engineering team to JNPR, which boosts its efforts to deliver an innovative NAC solution as part of its AI-driven enterprise portfolio.
Juniper Networks has an Earnings ESP of +1.89%. It has an expected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 90 days.
JNPR recorded earnings surprises in two out of the last four reported quarters, with an average beat of 3%. The company is set to release earnings results on Jan 31, after the closing bell.
IDEX is poised to gain from a diversified business structure, solid product portfolio, strengthening end markets and buyouts. The Muon Group acquisition expands IEX’s growing platform of precision technology business.
Steady demand in the industrial end market with strength in energy, mining and infrastructure markets will be beneficial for the Fluid & Metering Technologies unit. For 2022, IEX expects adjusted earnings of $8.04-$8.09 per share, implying a rise from $6.30 in 2021.
IDEX has an Earnings ESP of +2.96%. It has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last seven days.
IEX recorded earnings surprises in three out of the last four reported quarters, with an average beat of 5.7%. The company is set to release earnings results on Jan 31, after the closing bell.
Hologic delivered better-than-expected revenues and earnings for the fourth quarter of fiscal 2022. Both molecular diagnostics and surgical businesses grew strong. Excluding COVID impact, molecular diagnostics business grew primarily on more assays being run through HOLX’s expanded Panther installed base. GYN Surgical business of HOLX grew nearly 9% organically as the company registered procedural volumes return as well as acceleration from the new business lines.
Hologic has an Earnings ESP of +6.37%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days. HOLX recorded earnings surprises in the last four reported quarters, with an average beat of 46.1%. The company is set to release earnings results on Feb 1, after the closing bell.
Air Products and Chemicals is expected to benefit from strategic investments in high-return projects, new business deals and acquisitions in fiscal 2023. Also, APD is committed maximizing returns to shareholders leveraging strong cash flows. APD will also benefit from productivity actions. The acquisition of PBF Energy plants is also contributing to its results.
Air Products and Chemicals has an Earnings ESP of +2.67%. It has an expected earnings growth rate of 9.7% for the current year (ending September 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
APD recorded earnings surprises in the last four reported quarters, with an average beat of 1.7%. The company is set to release earnings results on Feb 2, before the opening bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.