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JPMorgan, Pepsi and Delta Air are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – October 9, 2023 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan (JPM - Free Report) , Pepsi (PEP - Free Report) and Delta Air (DAL - Free Report) .
Analyzing Q3 Earnings & Higher Interest Rates
Quarterly earnings releases will begin taking center stage this week, helping dilute the market's rapt attention on rising treasury bond yields. The push higher in yields has been reflective of the higher-for-longer Fed view, which in turn has been driven by the U.S. economy's extraordinary resilience.
The economy's resilience has been showing up in the positive turn in the earnings outlook that we have been flagging in this space in recent months. Specifically, the earnings estimates revisions trend notably stabilized in early April this year after steadily coming down for nearly a year.
Had it not been for the Energy sector weakness, whose estimates had been steadily coming down this year before reversing course in recent days and going back up, aggregate earnings estimates would be modestly up since early April 2023.
Sectors enjoying positive estimate revisions in this time period include Tech, Construction, Autos, Consumer Discretionary, Industrial Products, and Retail.
We are seeing a similar revisions trend at play concerning estimates for 2023 Q3, whose advanced results have started coming out already.
The expectation currently is of S&P 500 earnings declining by -2.1% in Q3 from the same period last year on +0.6% higher revenues. This would follow the -7.1% decline on +1.1% higher revenues in 2023 Q2.
2023 Q3 is expected to be the last period of declining earnings for the index, with positive growth resuming from 2023 Q4 onwards. In fact, had it not been for the Energy sector drag, earnings growth in 2023 Q3 would already be positive.
Excluding the Energy sector, however, net margins would be modestly up from the year-earlier period.
One sector that has made significant progress on the margins front is the Tech sector, whose year-over-year comparison turned positive in the preceding period and is expected to expand further this quarter.
Look at current expectations for next year and the year after to understand the disconnect between the reality of current bottom-up aggregate earnings estimates and the seemingly never-ending worries about an impending economic downturn. That said, most economic analysts have been steadily lowering their recessionary odds in recent months.
This Week's Notable Earnings Releases
The Q3 earnings season will really get going when the big banks start coming out with their quarterly numbers a week from today. We have 12 S&P 500 members on deck to report results this week, including JPMorgan and other bank results, on Friday, October 13th. Other notable companies reporting this week include Pepsi on Tuesday, October 10th, and the October 12th release from Delta Air.
Remember that this week's results from JPMorgan, Pepsi, and Delta wouldn't be the first earnings reports that will be counted as part of the 2023 Q3 tally. That distinction goes to Oracle and 19 other S&P 500 members that have already reported results in recent days for their fiscal periods ending in August.
All of these early results from the 20 index members are from companies with fiscal quarters ending in August, which we count as part of our September-quarter tally.
For the 20 S&P 500 members that have reported already, total earnings and revenues are up +2.3% and +4.3% from the same period last year, with 85% beating EPS estimates and 65% beating revenue estimates.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>The Q3 Earnings Season Kicks Off?
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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JPMorgan, Pepsi and Delta Air are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – October 9, 2023 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan (JPM - Free Report) , Pepsi (PEP - Free Report) and Delta Air (DAL - Free Report) .
Analyzing Q3 Earnings & Higher Interest Rates
Quarterly earnings releases will begin taking center stage this week, helping dilute the market's rapt attention on rising treasury bond yields. The push higher in yields has been reflective of the higher-for-longer Fed view, which in turn has been driven by the U.S. economy's extraordinary resilience.
The economy's resilience has been showing up in the positive turn in the earnings outlook that we have been flagging in this space in recent months. Specifically, the earnings estimates revisions trend notably stabilized in early April this year after steadily coming down for nearly a year.
Had it not been for the Energy sector weakness, whose estimates had been steadily coming down this year before reversing course in recent days and going back up, aggregate earnings estimates would be modestly up since early April 2023.
Sectors enjoying positive estimate revisions in this time period include Tech, Construction, Autos, Consumer Discretionary, Industrial Products, and Retail.
We are seeing a similar revisions trend at play concerning estimates for 2023 Q3, whose advanced results have started coming out already.
The expectation currently is of S&P 500 earnings declining by -2.1% in Q3 from the same period last year on +0.6% higher revenues. This would follow the -7.1% decline on +1.1% higher revenues in 2023 Q2.
2023 Q3 is expected to be the last period of declining earnings for the index, with positive growth resuming from 2023 Q4 onwards. In fact, had it not been for the Energy sector drag, earnings growth in 2023 Q3 would already be positive.
Excluding the Energy sector, however, net margins would be modestly up from the year-earlier period.
One sector that has made significant progress on the margins front is the Tech sector, whose year-over-year comparison turned positive in the preceding period and is expected to expand further this quarter.
Look at current expectations for next year and the year after to understand the disconnect between the reality of current bottom-up aggregate earnings estimates and the seemingly never-ending worries about an impending economic downturn. That said, most economic analysts have been steadily lowering their recessionary odds in recent months.
This Week's Notable Earnings Releases
The Q3 earnings season will really get going when the big banks start coming out with their quarterly numbers a week from today. We have 12 S&P 500 members on deck to report results this week, including JPMorgan and other bank results, on Friday, October 13th. Other notable companies reporting this week include Pepsi on Tuesday, October 10th, and the October 12th release from Delta Air.
Remember that this week's results from JPMorgan, Pepsi, and Delta wouldn't be the first earnings reports that will be counted as part of the 2023 Q3 tally. That distinction goes to Oracle and 19 other S&P 500 members that have already reported results in recent days for their fiscal periods ending in August.
All of these early results from the 20 index members are from companies with fiscal quarters ending in August, which we count as part of our September-quarter tally.
For the 20 S&P 500 members that have reported already, total earnings and revenues are up +2.3% and +4.3% from the same period last year, with 85% beating EPS estimates and 65% beating revenue estimates.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>The Q3 Earnings Season Kicks Off?
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.