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The second-quarter 2023 earnings season is in full swing. This week is the first big one for the season with 987 companies slated to report their financial numbers. Market participants will try to analyze this reporting cycle against the backdrop of the Fed’s interest rate hike policies.
As of Jul 25, 122 S&P 500 companies reported earnings results. Total earnings of these companies are up 1.2% year-over-year on 7.1% higher revenues. Of these 122 companies, 81.1% surpassed EPS estimates while 63.9% outpaced revenue estimates.
At present, our estimate has shown that the total earnings of the S&P 500 Index will likely drop 10.4% 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.
Beside tech bigwigs, several major companies will report this week. We have selected five such companies with a favorable Zacks Rank that are poised to beat earnings estimates. The combination of a possible earnings beat and 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
Honeywell International Inc. (HON - Free Report) has solid footprints in the aerospace industry, with commercial aviation and defense being two major business sources. Opportunities within unmanned aerial systems and urban air mobility industries are encouraging too.
HON’s unit — Unmanned Aerial Systems — is working to gain leverage from these promising markets. The launch of SATCOM — by far the smallest and lightest satellite communication system for unmanned aerial vehicles — is a step forward in the direction.
Honeywell International has an Earnings ESP of +0.85%. It has an expected earnings growth rate of 4.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. HON recorded earnings surprises in the last four reported quarters, with an average beat of 4%.
Boston Scientific Corp. (BSX - Free Report) develops, manufactures, and markets medical devices for use in various interventional medical specialties worldwide. BSX operates through the MedSurg and Cardiovascular segments. BSX has adopted organic as well as inorganic routes for success.
Boston Scientific has an Earnings ESP of +0.47%. It has an expected earnings growth rate of 14% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 90 days. BSX recorded earnings surprises in two out of the last four reported quarters, with an average beat of 1.9%.
A. O. Smith Corp. (AOS - Free Report) is one of the leading manufacturers of commercial and residential water heating equipment, and water treatment products of the world. AOS specializes in offering innovative, as well as energy-efficient solutions and products, which are developed and sold on a global platform.
A. O. Smith has an Earnings ESP of +1.31%. It has an expected earnings growth rate of 11.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 30 days. AOS recorded earnings surprises in the last four reported quarters, with an average beat of 8%.
S&P Global Inc. (SPGI - Free Report) is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. SPGI operates through six reportable segments: S&P Global Market Intelligence, S&P Global Ratings, S&P Global Commodity Insights, S&P Global Mobility, S&P Dow Jones Indices, and S&P Global Engineering Solutions.
S&P Global has an Earnings ESP of +1.89%. It has an expected earnings growth rate of 12.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past seven days. SPGI recorded earnings surprises in three out of the last four reported quarters, with an average beat of 3.1%.
Autohome Inc. (ATHM - Free Report) offers an online destination for automobile consumers primarily in the People's Republic of China. ATHM through its websites, autohome.com.cn and che168.com delivers content to automobile buyers and owners.
ATHM also offers advertising services; dealer subscription services; used automobile listings services; automobile dealer subscription services. ATHM operates an automotive aftermarket services platform and real-time feedback on the service providers.
Autohome has an Earnings ESP of +7.61%. It has an expected earnings growth rate of 2.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% over the past 30 days. ATHM recorded earnings surprises in the last four reported quarters, with an average beat of 14.2%.
Image: Bigstock
5 Must-Buy Stocks Ahead of Q2 Earnings Tomorrow
The second-quarter 2023 earnings season is in full swing. This week is the first big one for the season with 987 companies slated to report their financial numbers. Market participants will try to analyze this reporting cycle against the backdrop of the Fed’s interest rate hike policies.
As of Jul 25, 122 S&P 500 companies reported earnings results. Total earnings of these companies are up 1.2% year-over-year on 7.1% higher revenues. Of these 122 companies, 81.1% surpassed EPS estimates while 63.9% outpaced revenue estimates.
At present, our estimate has shown that the total earnings of the S&P 500 Index will likely drop 10.4% 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.
Beside tech bigwigs, several major companies will report this week. We have selected five such companies with a favorable Zacks Rank that are poised to beat earnings estimates. The combination of a possible earnings beat and a favorable Zacks Rank should drive their stocks in the near future.
Our Top Picks
We have narrowed our search to five stocks that are set to declare second-quarter earnings results on Jul 27, before market open. 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
Honeywell International Inc. (HON - Free Report) has solid footprints in the aerospace industry, with commercial aviation and defense being two major business sources. Opportunities within unmanned aerial systems and urban air mobility industries are encouraging too.
HON’s unit — Unmanned Aerial Systems — is working to gain leverage from these promising markets. The launch of SATCOM — by far the smallest and lightest satellite communication system for unmanned aerial vehicles — is a step forward in the direction.
Honeywell International has an Earnings ESP of +0.85%. It has an expected earnings growth rate of 4.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. HON recorded earnings surprises in the last four reported quarters, with an average beat of 4%.
Boston Scientific Corp. (BSX - Free Report) develops, manufactures, and markets medical devices for use in various interventional medical specialties worldwide. BSX operates through the MedSurg and Cardiovascular segments. BSX has adopted organic as well as inorganic routes for success.
Boston Scientific has an Earnings ESP of +0.47%. It has an expected earnings growth rate of 14% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 90 days. BSX recorded earnings surprises in two out of the last four reported quarters, with an average beat of 1.9%.
A. O. Smith Corp. (AOS - Free Report) is one of the leading manufacturers of commercial and residential water heating equipment, and water treatment products of the world. AOS specializes in offering innovative, as well as energy-efficient solutions and products, which are developed and sold on a global platform.
A. O. Smith has an Earnings ESP of +1.31%. It has an expected earnings growth rate of 11.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 30 days. AOS recorded earnings surprises in the last four reported quarters, with an average beat of 8%.
S&P Global Inc. (SPGI - Free Report) is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. SPGI operates through six reportable segments: S&P Global Market Intelligence, S&P Global Ratings, S&P Global Commodity Insights, S&P Global Mobility, S&P Dow Jones Indices, and S&P Global Engineering Solutions.
S&P Global has an Earnings ESP of +1.89%. It has an expected earnings growth rate of 12.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past seven days. SPGI recorded earnings surprises in three out of the last four reported quarters, with an average beat of 3.1%.
Autohome Inc. (ATHM - Free Report) offers an online destination for automobile consumers primarily in the People's Republic of China. ATHM through its websites, autohome.com.cn and che168.com delivers content to automobile buyers and owners.
ATHM also offers advertising services; dealer subscription services; used automobile listings services; automobile dealer subscription services. ATHM operates an automotive aftermarket services platform and real-time feedback on the service providers.
Autohome has an Earnings ESP of +7.61%. It has an expected earnings growth rate of 2.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% over the past 30 days. ATHM recorded earnings surprises in the last four reported quarters, with an average beat of 14.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.