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5 U.S. Corporate Giants to Invest in Ahead of Earnings This Week
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We are in the second-half of the fourth-quarter 2022 earnings season. So far, results are mostly in line with expectations. As of Feb 10, 346 S&P 500 companies have reported their earnings results. Total earnings of these companies are down 6.2% year over year on 5.6% higher revenues with 71.1% beating EPS estimates and 69.7% beating revenue estimates.
This week will be the last big week of this reporting cycle with as many as 854 companies reporting their quarterly financial numbers. We have selected five U.S. corporate bigwigs with a favorable Zacks Rank that are poised 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.
This earnings season will be important as market participants will closely monitor any sign of earnings, revenues or margin decline as well as the guidance given by companies.
Market participants will try to understand whether the U.S. economy is heading for a recession in the near future. How much U.S. corporates are being affected due to supply-chain disruption, hike in wage rate and the Fed’s rigorous monetary tightening policies is a matter of concern.
Our current projection shows that for fourth-quarter 2022, total earnings of the S&P 500 Index as a whole are expected to decline 5.6% year over year on 5.4% 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
Coca-Cola has benefited from its strategic transformation and ongoing recovery around the world. Strength across the majority of markets, investments in marketplace, recovery in certain markets as well as the cycling of last year’s pandemic-led impacts aided volumes. KO retained its upbeat 2022 view. KO is poised to gain from innovations and accelerating digital investments.
Coca-Cola has an Earnings ESP of +0.75%. It has an expected earnings growth rate of 2.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 60 days.
KO recorded earnings surprises in the last four reported quarters, with an average beat of 8.8%. The company is set to release earnings results on Feb 14, before the opening bell.
Deere is poised well to gain on improving commodity prices, which will encourage farmers to spend more on farm equipment. Strong replacement demand will also continue to boost DE’s top line. Demand for Construction equipment will likely benefit from anticipated growth in infrastructure investments. We expect Deere’s adjusted earnings per share to grow 16% in fiscal 2023, led by strong demand and pricing.
Product launches equipped with the latest technology to make farming automated will continue to provide DE with an edge over its competitors. DE will benefit in the long run from rapid growth in the global population as well as the rising worldwide infrastructure needs.
Deere has an Earnings ESP of +5.20%. It has an expected earnings growth rate of 20.3% for the current year (ending October 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days.
DE recorded earnings surprises in three out of the last four reported quarters, with an average beat of 7.1%. The company is set to release earnings results on Feb 17, before the opening bell.
Republic Services is focused on increasing its operational efficiency by shifting to compressed natural gas collection vehicles and converting rear-loading trucks to automated-side loaders to reduce costs.
RSG continues to grow internally with the help of long-term contracts for collection, recycling and disposal of solid waste materials. Consistency in dividend payments and share buybacks boost investors’ confidence and positively impact earnings per share.
Republic Services has an Earnings ESP of +7.50%. It has an expected earnings growth rate of 5.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days.
RSG recorded earnings surprises in the last four reported quarters, with an average beat of 8%. The company is set to release earnings results on Feb 15, after the closing bell.
American International Group has benefitted from cost-cutting efforts that drives its operational efficiency and aids margins. After suffering tepid revenues for the past several years, AIG’s sales are growing now on the back of well-performing Commercial and Personal lines businesses.
Divestitures streamlined American International Group’s business operations as well as enhanced capital allocation and operating leverage. From Life and Retirement IPO, now Corebridge Financial, AIG has fetched gross proceeds of $1.7 billion.
American International Group has an Earnings ESP of +0.70%. It has an expected earnings growth rate of 42.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3% over the last 30 days.
AIG recorded earnings surprises in three out of the last four reported quarters, with an average beat of 13%. The company is set to release earnings results on Feb 15, after the closing bell.
Westinghouse Air Brake Technologies continues to benefit from solid growth across its Freight segment revenues. Acquisition of Collins Aerospace’s ARINC rail solutions business segment expands WAB’s digital and electronics portfolio, enhances productivity, safety, and efficiency across the global rail network. The impending buyout of Super Metal is a prudent move. The buyout should boost WAB's Railway Maintenance portfolio. Wabtec’s sound liquidity position is a positive.
Westinghouse Air Brake Technologies has an Earnings ESP of +0.29%. It has an expected earnings growth rate of 11.3% for the current year. WAB recorded earnings surprises in three out of the last four reported quarters, with an average beat of 0.6%. The company is set to release earnings results on Feb 15, before the opening bell.
Image: Bigstock
5 U.S. Corporate Giants to Invest in Ahead of Earnings This Week
We are in the second-half of the fourth-quarter 2022 earnings season. So far, results are mostly in line with expectations. As of Feb 10, 346 S&P 500 companies have reported their earnings results. Total earnings of these companies are down 6.2% year over year on 5.6% higher revenues with 71.1% beating EPS estimates and 69.7% beating revenue estimates.
This week will be the last big week of this reporting cycle with as many as 854 companies reporting their quarterly financial numbers. We have selected five U.S. corporate bigwigs with a favorable Zacks Rank that are poised 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: The Coca-Cola Co. (KO - Free Report) , Deere & Co. (DE - Free Report) , Republic Services Inc. (RSG - Free Report) , Westinghouse Air Brake Technologies Corp. (WAB - Free Report) and American International Group Inc. (AIG - Free Report) .
Importance of Q4 Earnings Results
This earnings season will be important as market participants will closely monitor any sign of earnings, revenues or margin decline as well as the guidance given by companies.
Market participants will try to understand whether the U.S. economy is heading for a recession in the near future. How much U.S. corporates are being affected due to supply-chain disruption, hike in wage rate and the Fed’s rigorous monetary tightening policies is a matter of concern.
Our current projection shows that for fourth-quarter 2022, total earnings of the S&P 500 Index as a whole are expected to decline 5.6% year over year on 5.4% higher revenues.
Our Top Picks
Five U.S. corporate behemoths are set to beat earnings estimates this 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
Coca-Cola has benefited from its strategic transformation and ongoing recovery around the world. Strength across the majority of markets, investments in marketplace, recovery in certain markets as well as the cycling of last year’s pandemic-led impacts aided volumes. KO retained its upbeat 2022 view. KO is poised to gain from innovations and accelerating digital investments.
Coca-Cola has an Earnings ESP of +0.75%. It has an expected earnings growth rate of 2.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 60 days.
KO recorded earnings surprises in the last four reported quarters, with an average beat of 8.8%. The company is set to release earnings results on Feb 14, before the opening bell.
Deere is poised well to gain on improving commodity prices, which will encourage farmers to spend more on farm equipment. Strong replacement demand will also continue to boost DE’s top line. Demand for Construction equipment will likely benefit from anticipated growth in infrastructure investments. We expect Deere’s adjusted earnings per share to grow 16% in fiscal 2023, led by strong demand and pricing.
Product launches equipped with the latest technology to make farming automated will continue to provide DE with an edge over its competitors. DE will benefit in the long run from rapid growth in the global population as well as the rising worldwide infrastructure needs.
Deere has an Earnings ESP of +5.20%. It has an expected earnings growth rate of 20.3% for the current year (ending October 2023). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days.
DE recorded earnings surprises in three out of the last four reported quarters, with an average beat of 7.1%. The company is set to release earnings results on Feb 17, before the opening bell.
Republic Services is focused on increasing its operational efficiency by shifting to compressed natural gas collection vehicles and converting rear-loading trucks to automated-side loaders to reduce costs.
RSG continues to grow internally with the help of long-term contracts for collection, recycling and disposal of solid waste materials. Consistency in dividend payments and share buybacks boost investors’ confidence and positively impact earnings per share.
Republic Services has an Earnings ESP of +7.50%. It has an expected earnings growth rate of 5.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days.
RSG recorded earnings surprises in the last four reported quarters, with an average beat of 8%. The company is set to release earnings results on Feb 15, after the closing bell.
American International Group has benefitted from cost-cutting efforts that drives its operational efficiency and aids margins. After suffering tepid revenues for the past several years, AIG’s sales are growing now on the back of well-performing Commercial and Personal lines businesses.
Divestitures streamlined American International Group’s business operations as well as enhanced capital allocation and operating leverage. From Life and Retirement IPO, now Corebridge Financial, AIG has fetched gross proceeds of $1.7 billion.
American International Group has an Earnings ESP of +0.70%. It has an expected earnings growth rate of 42.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3% over the last 30 days.
AIG recorded earnings surprises in three out of the last four reported quarters, with an average beat of 13%. The company is set to release earnings results on Feb 15, after the closing bell.
Westinghouse Air Brake Technologies continues to benefit from solid growth across its Freight segment revenues. Acquisition of Collins Aerospace’s ARINC rail solutions business segment expands WAB’s digital and electronics portfolio, enhances productivity, safety, and efficiency across the global rail network. The impending buyout of Super Metal is a prudent move. The buyout should boost WAB's Railway Maintenance portfolio. Wabtec’s sound liquidity position is a positive.
Westinghouse Air Brake Technologies has an Earnings ESP of +0.29%. It has an expected earnings growth rate of 11.3% for the current year. WAB recorded earnings surprises in three out of the last four reported quarters, with an average beat of 0.6%. The company is set to release earnings results on Feb 15, before the opening bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.