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Earnings Season: 3 Companies That Could Positively Surprise
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It’s shaping up to be a busy week in the market, with earnings season taking center stage. The Q3 cycle will be vastly important, potentially sparking a rally that could last into year-end.
As usual, surprises are lurking beneath the hood, a few of which could come from Packaging Corporation of America (PKG - Free Report) , Hess Corp. (HES - Free Report) , and Ryder System (R - Free Report) . All three sport a positive Zacks Earnings ESP Score.
Zacks Earnings ESP (Expected Surprise Prediction) finds companies that have recently seen positive earnings estimate revision activity.
The idea is that more recent information is generally more accurate and can better predict the future, giving investors an advantage in earnings season.
Let’s take a closer look at each.
Hess Corp.
Hess is a globally integrated energy company engaging in the exploration, production, development, transportation, purchase, and sale of crude oil and natural gas liquids. Analysts have taken their expectations well higher for the release, with the $1.31 Zacks Consensus EPS Estimate up 30% since July of this year. Hess will report on October 25th before the market’s open.
Image Source: Zacks Investment Research
The company has consistently exceeded earnings expectations as of late, beating the Zacks Consensus EPS Estimate in seven consecutive quarters. Still, it’s worth noting that top line performance has left some to be desired, as Hess has missed revenue expectations in back-to-back releases.
As we can see below, the company’s quarterly releases have regularly brought volatility, seeing buying pressure following the most recent release.
Image Source: Zacks Investment Research
In addition, we expect the company to post $2.6 billion in revenue, reflecting a 20% pullback from year-ago sales of $3.2 billion. The quarterly estimate has narrowly moved lower since July, down a fractional 0.4%.
Packaging Corporation of America
Packaging Corporation of America is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. Analysts have primarily left their earnings expectations unchanged since July, with the $1.92 per share consensus estimate down a penny. PKG will report on October 23rd after the market’s close.
Image Source: Zacks Investment Research
The story is primarily the same regarding top line expectations, with the $1.9 billion quarterly revenue estimate down 0.4% since July and reflecting a pullback of 8% from year-ago sales of $2.1 billion. Below is a chart illustrating the company’s revenue on a quarterly basis.
As we can see, sales have eclipsed pre-pandemic levels.
Image Source: Zacks Investment Research
Like HES, Packaging Corporations’ quarterly releases have brought volatility to shares, seeing both positive and negative reactions post-earnings in 2023.
Image Source: Zacks Investment Research
Ryder System
Ryder System is a leading logistics and transportation company providing supply chain, dedicated transportation, and fleet management solutions. Analysts have a bullish tone for the release, with the $3.38 Zacks Consensus EPS Estimate up 8% since July. Ryder will report on October 25th before the market’s open.
As shown below, recent positive revisions hit the tape in early October.
Image Source: Zacks Investment Research
Revenue expectations have been taken lower, though, as the $3 billion quarterly revenue expected is down roughly 2% since July’s original $3.1 billion estimate. It’s worth noting that the value reflects essentially zero change from the year-ago quarter.
Shares have gotten a boost following back-to-back releases, creating a strong uptrend since their late April low. In fact, shares are currently trading above their 200 and 50-day daily moving averages, reflecting bullishness.
Below is a chart illustrating this favorable trend, with a recent ‘Golden Cross’ also apparent.
Image Source: Zacks Investment Research
Bottom Line
With earnings season kicking into high gear this week, there are sure to be plenty of surprises lurking beneath. The big banks’ results were primarily positive, helping us start the cycle on the right foot.
And when it comes to upcoming surprises, all three companies above - Packaging Corporation of America (PKG - Free Report) , Hess Corp. (HES - Free Report) , and Ryder System (R - Free Report) – could deliver just that.
All three sport a positive Zacks Earnings ESP Score and carry a favorable Zacks Rank, with the latter reflecting optimism among analysts.
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Earnings Season: 3 Companies That Could Positively Surprise
It’s shaping up to be a busy week in the market, with earnings season taking center stage. The Q3 cycle will be vastly important, potentially sparking a rally that could last into year-end.
As usual, surprises are lurking beneath the hood, a few of which could come from Packaging Corporation of America (PKG - Free Report) , Hess Corp. (HES - Free Report) , and Ryder System (R - Free Report) . All three sport a positive Zacks Earnings ESP Score.
Zacks Earnings ESP (Expected Surprise Prediction) finds companies that have recently seen positive earnings estimate revision activity.
The idea is that more recent information is generally more accurate and can better predict the future, giving investors an advantage in earnings season.
Let’s take a closer look at each.
Hess Corp.
Hess is a globally integrated energy company engaging in the exploration, production, development, transportation, purchase, and sale of crude oil and natural gas liquids. Analysts have taken their expectations well higher for the release, with the $1.31 Zacks Consensus EPS Estimate up 30% since July of this year. Hess will report on October 25th before the market’s open.
Image Source: Zacks Investment Research
The company has consistently exceeded earnings expectations as of late, beating the Zacks Consensus EPS Estimate in seven consecutive quarters. Still, it’s worth noting that top line performance has left some to be desired, as Hess has missed revenue expectations in back-to-back releases.
As we can see below, the company’s quarterly releases have regularly brought volatility, seeing buying pressure following the most recent release.
Image Source: Zacks Investment Research
In addition, we expect the company to post $2.6 billion in revenue, reflecting a 20% pullback from year-ago sales of $3.2 billion. The quarterly estimate has narrowly moved lower since July, down a fractional 0.4%.
Packaging Corporation of America
Packaging Corporation of America is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. Analysts have primarily left their earnings expectations unchanged since July, with the $1.92 per share consensus estimate down a penny. PKG will report on October 23rd after the market’s close.
Image Source: Zacks Investment Research
The story is primarily the same regarding top line expectations, with the $1.9 billion quarterly revenue estimate down 0.4% since July and reflecting a pullback of 8% from year-ago sales of $2.1 billion. Below is a chart illustrating the company’s revenue on a quarterly basis.
As we can see, sales have eclipsed pre-pandemic levels.
Image Source: Zacks Investment Research
Like HES, Packaging Corporations’ quarterly releases have brought volatility to shares, seeing both positive and negative reactions post-earnings in 2023.
Image Source: Zacks Investment Research
Ryder System
Ryder System is a leading logistics and transportation company providing supply chain, dedicated transportation, and fleet management solutions. Analysts have a bullish tone for the release, with the $3.38 Zacks Consensus EPS Estimate up 8% since July. Ryder will report on October 25th before the market’s open.
As shown below, recent positive revisions hit the tape in early October.
Image Source: Zacks Investment Research
Revenue expectations have been taken lower, though, as the $3 billion quarterly revenue expected is down roughly 2% since July’s original $3.1 billion estimate. It’s worth noting that the value reflects essentially zero change from the year-ago quarter.
Shares have gotten a boost following back-to-back releases, creating a strong uptrend since their late April low. In fact, shares are currently trading above their 200 and 50-day daily moving averages, reflecting bullishness.
Below is a chart illustrating this favorable trend, with a recent ‘Golden Cross’ also apparent.
Image Source: Zacks Investment Research
Bottom Line
With earnings season kicking into high gear this week, there are sure to be plenty of surprises lurking beneath. The big banks’ results were primarily positive, helping us start the cycle on the right foot.
And when it comes to upcoming surprises, all three companies above - Packaging Corporation of America (PKG - Free Report) , Hess Corp. (HES - Free Report) , and Ryder System (R - Free Report) – could deliver just that.
All three sport a positive Zacks Earnings ESP Score and carry a favorable Zacks Rank, with the latter reflecting optimism among analysts.