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5 Large-Cap Stocks Likely to Gain on Earnings This Month
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We are in the last leg of the first-quarter earnings season. This is the last big week of this reporting cycle. Earnings results are so far better than expected. Overall results and management guidance will be crucial for market participants to gauge the health of the U.S. economy.
As of May 8, 440 companies on the S&P 500 Index reported their financial numbers. Total earnings for these 400 index members increased 5% from the same period last year on 4.2% higher revenues, with 78% beating EPS estimates and 60.9% beating revenue estimates.
At present, total earnings of the S&P 500 Index in first-quarter 2024 are expected to be up 9.2% on 4.5% higher revenues. This follows the 5.3% earnings growth on 4.3% higher revenues in fourth-quarter 2023 and 3.8% earnings growth on 2.2% higher revenues in third-quarter 2023.
Meanwhile, a few U.S. corporate bigwigs are set to beat on earnings this month. A handful of them currently carry a favorable Zacks Rank. The combination of a favorable Zacks Rank and an earnings beat should drive their stock prices in the near term.
Our research shows that for stocks with the combination of a Zacks Rank #3 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 release. 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
AutoZone Inc. (AZO - Free Report) has been generating record sales for 34 consecutive years. The focus on increasing AZO’s market penetration via the expansion of mega hubs is set to boost long-term prospects. Expanded hub and mega-hub rollouts, along with the expansion of distribution center footprint, bode well. AZO’s robust buyback program sparks confidence.
Zacks Rank #3 AutoZone has an Earnings ESP of +0.26%. It has an expected earnings growth rate of 15.1% for the current year (August 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days.
AutoZone recorded earnings surprises in the last four reported quarters, with an average beat of 7.7%. The company is set to release earnings results on May 21, before the opening bell.
Deere & Co. (DE - Free Report) is taking steps to enhance its pricing. This is expected to aid its results. DE’s long-term growth prospects remain strong, owing to consistent investments in new products and markets.
Gains from the launch of products equipped with the latest technology will drive DE’s performance. The demand for agricultural equipment will keep supporting DE’s order levels.
Zacks Rank #3 Deere has an Earnings ESP of +0.21%. Deere recorded earnings surprises in the last four reported quarters, with an average beat of 17.1%. The company is set to release earnings results on May 16, before the opening bell.
Applied Materials Inc. (AMAT - Free Report) is benefiting from strength in the Applied Global Services segment, owing to the growing adoption of the 200-mm system. Solid momentum in the subscription and display businesses is a plus.
AMAT remains optimistic about its strategies and investments in IoT and AI. AMAT’s strength in IoT, Communications, Auto, Power and Sensors is likely to continue aiding its position in the semiconductor industry in the days ahead. AMAT’s broad-based diversified portfolio and strong services business remain its key growth drivers.
Zacks Rank #3 Applied Materials has an Earnings ESP of +0.31%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days. Applied Materials recorded earnings surprises in the last four reported quarters, with an average beat of 9.4%. The company is set to release earnings results on May 16, after the closing bell.
Walmart Inc. (WMT - Free Report) has been gaining from its highly diversified business with contributions from various segments, channels and formats. WMT has been benefiting from an increase in in-store and digital channel traffic due to its robust omnichannel initiatives. Store-fulfilled delivery sales jumped 50% in the fourth quarter of fiscal 2024.
WMT’s strategic focus on enhancing delivery services has also been rewarding, as evidenced by the constant increase in the market share for groceries. Upsides like these, along with growth in the advertising business, fueled WMT’s fourth-quarter results and led to an encouraging fiscal 2025 view.
Zacks Rank #3 Walmart has an Earnings ESP of +1.65%. It has an expected earnings growth rate of 6.3% for the current year (January 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days.
Walmart recorded earnings surprises in the last four reported quarters, with an average beat of 7.3%. The company is set to release earnings results on May 16, before the opening bell.
The TJX Companies Inc.’s (TJX - Free Report) off-price business model, strategic store locations, impressive brands and supply-chain management are working well. TJX has been benefiting from robust performance in its Marmaxx and HomeGoods segments, a trend that continued in fourth-quarter fiscal 2024. TJX’s Comparable store sales saw a rise, indicating sustained momentum.
TJX anticipates a 2-3% rise in comparable store sales for fiscal 2025. With a solid pre-tax margin, TJX is poised for steady profitability, supported by improved merchandise margins and expense leverage. Also, management is on track with expansion efforts.
Zacks Rank #2 The TJX Companies has an Earnings ESP of +2.50%. It has an expected earnings growth rate of 9% for the current year (January 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last seven days.
The TJX Companies recorded earnings surprises in the last four reported quarters, with an average beat of 6.3%. The company is set to release earnings results on May 22, before the opening bell.
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5 Large-Cap Stocks Likely to Gain on Earnings This Month
We are in the last leg of the first-quarter earnings season. This is the last big week of this reporting cycle. Earnings results are so far better than expected. Overall results and management guidance will be crucial for market participants to gauge the health of the U.S. economy.
As of May 8, 440 companies on the S&P 500 Index reported their financial numbers. Total earnings for these 400 index members increased 5% from the same period last year on 4.2% higher revenues, with 78% beating EPS estimates and 60.9% beating revenue estimates.
At present, total earnings of the S&P 500 Index in first-quarter 2024 are expected to be up 9.2% on 4.5% higher revenues. This follows the 5.3% earnings growth on 4.3% higher revenues in fourth-quarter 2023 and 3.8% earnings growth on 2.2% higher revenues in third-quarter 2023.
Meanwhile, a few U.S. corporate bigwigs are set to beat on earnings this month. A handful of them currently carry a favorable Zacks Rank. The combination of a favorable Zacks Rank and an earnings beat should drive their stock prices in the near term.
Our Top Picks
We have narrowed our search to five large-cap stocks that are poised to beat on earnings results this month. Each of these stocks carries either a Zacks Rank #2 (Buy) or 3 (Hold) 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 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 release. 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
AutoZone Inc. (AZO - Free Report) has been generating record sales for 34 consecutive years. The focus on increasing AZO’s market penetration via the expansion of mega hubs is set to boost long-term prospects. Expanded hub and mega-hub rollouts, along with the expansion of distribution center footprint, bode well. AZO’s robust buyback program sparks confidence.
Zacks Rank #3 AutoZone has an Earnings ESP of +0.26%. It has an expected earnings growth rate of 15.1% for the current year (August 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days.
AutoZone recorded earnings surprises in the last four reported quarters, with an average beat of 7.7%. The company is set to release earnings results on May 21, before the opening bell.
Deere & Co. (DE - Free Report) is taking steps to enhance its pricing. This is expected to aid its results. DE’s long-term growth prospects remain strong, owing to consistent investments in new products and markets.
Gains from the launch of products equipped with the latest technology will drive DE’s performance. The demand for agricultural equipment will keep supporting DE’s order levels.
Zacks Rank #3 Deere has an Earnings ESP of +0.21%. Deere recorded earnings surprises in the last four reported quarters, with an average beat of 17.1%. The company is set to release earnings results on May 16, before the opening bell.
Applied Materials Inc. (AMAT - Free Report) is benefiting from strength in the Applied Global Services segment, owing to the growing adoption of the 200-mm system. Solid momentum in the subscription and display businesses is a plus.
AMAT remains optimistic about its strategies and investments in IoT and AI. AMAT’s strength in IoT, Communications, Auto, Power and Sensors is likely to continue aiding its position in the semiconductor industry in the days ahead. AMAT’s broad-based diversified portfolio and strong services business remain its key growth drivers.
Zacks Rank #3 Applied Materials has an Earnings ESP of +0.31%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days. Applied Materials recorded earnings surprises in the last four reported quarters, with an average beat of 9.4%. The company is set to release earnings results on May 16, after the closing bell.
Walmart Inc. (WMT - Free Report) has been gaining from its highly diversified business with contributions from various segments, channels and formats. WMT has been benefiting from an increase in in-store and digital channel traffic due to its robust omnichannel initiatives. Store-fulfilled delivery sales jumped 50% in the fourth quarter of fiscal 2024.
WMT’s strategic focus on enhancing delivery services has also been rewarding, as evidenced by the constant increase in the market share for groceries. Upsides like these, along with growth in the advertising business, fueled WMT’s fourth-quarter results and led to an encouraging fiscal 2025 view.
Zacks Rank #3 Walmart has an Earnings ESP of +1.65%. It has an expected earnings growth rate of 6.3% for the current year (January 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days.
Walmart recorded earnings surprises in the last four reported quarters, with an average beat of 7.3%. The company is set to release earnings results on May 16, before the opening bell.
The TJX Companies Inc.’s (TJX - Free Report) off-price business model, strategic store locations, impressive brands and supply-chain management are working well. TJX has been benefiting from robust performance in its Marmaxx and HomeGoods segments, a trend that continued in fourth-quarter fiscal 2024. TJX’s Comparable store sales saw a rise, indicating sustained momentum.
TJX anticipates a 2-3% rise in comparable store sales for fiscal 2025. With a solid pre-tax margin, TJX is poised for steady profitability, supported by improved merchandise margins and expense leverage. Also, management is on track with expansion efforts.
Zacks Rank #2 The TJX Companies has an Earnings ESP of +2.50%. It has an expected earnings growth rate of 9% for the current year (January 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last seven days.
The TJX Companies recorded earnings surprises in the last four reported quarters, with an average beat of 6.3%. The company is set to release earnings results on May 22, before the opening bell.