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The first-quarter 2023 earnings season is set to kick off this week. Market participants will try to analyze this reporting cycle against the backdrop of the Fed’s interest rate hike policies. Therefore, this season, management guidance and the near-term business outlook will get more importance than actual results. In addition to earnings and revenues, margins will get more attention from financial researchers.
At present, our estimate has shown that total earnings of the S&P 500 Index likely to drop 9.8% year-over-year on 0.4% lower revenues. The second-quarter earnings decline would follow the 3.4% decline in the first quarter and a 5.4% drop in fourth-quarter 2022.
Despite a tepid outlook, a handful of stocks with a favorable Zacks Rank are set to b eat on second quarter earnings next week. The combination of a possible earnings beat with a favorable Zacks Rank should drive their stocks in the near future.
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
Genuine Parts Co.‘s (GPC - Free Report) strategic buyouts to improve product offerings and expand geographical footprint are boosting its prospects. The KDG acquisition has strengthened the market-leading position of GPC in the North American industrial platform.
GPC’s dividend aristocrat status is commendable. The upbeat 2023 sales view further sparks optimism. GPC projects 2023 revenues from both the Automotive and Industrial segments to increase by 4-6%.
Genuine Parts has an Earnings ESP of +0.79%. It has an expected earnings growth rate of 8.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days.
GPC recorded earnings surprises in the last four reported quarters, with an average beat of 8.2%. The company is set to release earnings results on Jul 20, before the opening bell.
Abbott Laboratories (ABT - Free Report) exited the first quarter of 2023 with better-than-expected earnings and revenues. The Medical Device segment of ABT registered strong sales led by double-digit organic growth in Diabetes Care, Structural Heart, Heart Failure and Neuromodulation. The Diabetes Care business continued to benefit from the growing sales of its sensor-based continuous glucose monitoring system, FreeStyle Libre.
Abbott has an Earnings ESP of +0.85%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. ABT recorded earnings surprises in the last four reported quarters, with an average beat of 19.3%. The company is set to release earnings results on Jul 20, before the opening bell.
AutoNation Inc.‘s (AN - Free Report) diversified product mix and multiple streams of income reduce its risk profile and augur well for earnings and sales growth. Enhanced digital solutions have helped AN to further boost profitability and market presence. Buyouts of 11 dealerships from Priority 1 Automotive and Peacock Automotive are boosting AN’s growth prospects.
AutoNation has an Earnings ESP of +9.85%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days. AN recorded earnings surprises in three out of the last four reported quarters, with an average beat of 5%. The company is set to release earnings results on Jul 21, before the opening bell.
Snap-on Inc. (SNA - Free Report) has been benefiting from positive business momentum and gains from its Value Creation plan. SNA is on track with its Rapid Continuous Improvement process and other cost-reduction initiatives. Cost-reduction plans, including the RCI program, designed to enhance organizational effectiveness and minimize costs, bode well. Higher sales volume and gains from RCI initiatives have led to the margin expansion of SNA.
Snap-on has an Earnings ESP of +0.59%. It has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the last 90 days.
SNA recorded earnings surprises in the last four reported quarters, with an average beat of 9.6%. The company is set to release earnings results on Jul 20, before the opening bell.
PPG Industries Inc. (PPG - Free Report) is executing a cost cutting and restructuring strategy. Cost savings from restructuring are likely to support its margins. PPG is also taking steps to expand business inorganically. Acquisitions including Tikkurila, Worwag and Cetelon are expected to contribute to PPG’s sales this year.
PPG Industries has an Earnings ESP of +2.57%. It has an expected earnings growth rate of 20.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last seven days.
PPG recorded earnings surprises in three out of the last four reported quarters, with an average beat of 6.6%. The company is set to release earnings results on Jul 20, after the closing bell.
Image: Bigstock
5 Stocks to Buy Ahead of Q2 Earnings Next Week
The first-quarter 2023 earnings season is set to kick off this week. Market participants will try to analyze this reporting cycle against the backdrop of the Fed’s interest rate hike policies. Therefore, this season, management guidance and the near-term business outlook will get more importance than actual results. In addition to earnings and revenues, margins will get more attention from financial researchers.
At present, our estimate has shown that total earnings of the S&P 500 Index likely to drop 9.8% year-over-year on 0.4% lower revenues. The second-quarter earnings decline would follow the 3.4% decline in the first quarter and a 5.4% drop in fourth-quarter 2022.
Despite a tepid outlook, a handful of stocks with a favorable Zacks Rank are set to b eat on second quarter earnings next week. The combination of a possible earnings beat with a favorable Zacks Rank should drive their stocks in the near future.
Our Picks
We have narrowed our search to five companies that are set to declare second-quarter earnings results next week. Each of our picks 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
Genuine Parts Co.‘s (GPC - Free Report) strategic buyouts to improve product offerings and expand geographical footprint are boosting its prospects. The KDG acquisition has strengthened the market-leading position of GPC in the North American industrial platform.
GPC’s dividend aristocrat status is commendable. The upbeat 2023 sales view further sparks optimism. GPC projects 2023 revenues from both the Automotive and Industrial segments to increase by 4-6%.
Genuine Parts has an Earnings ESP of +0.79%. It has an expected earnings growth rate of 8.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days.
GPC recorded earnings surprises in the last four reported quarters, with an average beat of 8.2%. The company is set to release earnings results on Jul 20, before the opening bell.
Abbott Laboratories (ABT - Free Report) exited the first quarter of 2023 with better-than-expected earnings and revenues. The Medical Device segment of ABT registered strong sales led by double-digit organic growth in Diabetes Care, Structural Heart, Heart Failure and Neuromodulation. The Diabetes Care business continued to benefit from the growing sales of its sensor-based continuous glucose monitoring system, FreeStyle Libre.
Abbott has an Earnings ESP of +0.85%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. ABT recorded earnings surprises in the last four reported quarters, with an average beat of 19.3%. The company is set to release earnings results on Jul 20, before the opening bell.
AutoNation Inc.‘s (AN - Free Report) diversified product mix and multiple streams of income reduce its risk profile and augur well for earnings and sales growth. Enhanced digital solutions have helped AN to further boost profitability and market presence. Buyouts of 11 dealerships from Priority 1 Automotive and Peacock Automotive are boosting AN’s growth prospects.
AutoNation has an Earnings ESP of +9.85%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days. AN recorded earnings surprises in three out of the last four reported quarters, with an average beat of 5%. The company is set to release earnings results on Jul 21, before the opening bell.
Snap-on Inc. (SNA - Free Report) has been benefiting from positive business momentum and gains from its Value Creation plan. SNA is on track with its Rapid Continuous Improvement process and other cost-reduction initiatives. Cost-reduction plans, including the RCI program, designed to enhance organizational effectiveness and minimize costs, bode well. Higher sales volume and gains from RCI initiatives have led to the margin expansion of SNA.
Snap-on has an Earnings ESP of +0.59%. It has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the last 90 days.
SNA recorded earnings surprises in the last four reported quarters, with an average beat of 9.6%. The company is set to release earnings results on Jul 20, before the opening bell.
PPG Industries Inc. (PPG - Free Report) is executing a cost cutting and restructuring strategy. Cost savings from restructuring are likely to support its margins. PPG is also taking steps to expand business inorganically. Acquisitions including Tikkurila, Worwag and Cetelon are expected to contribute to PPG’s sales this year.
PPG Industries has an Earnings ESP of +2.57%. It has an expected earnings growth rate of 20.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last seven days.
PPG recorded earnings surprises in three out of the last four reported quarters, with an average beat of 6.6%. The company is set to release earnings results on Jul 20, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.