Back to top

Wood Stocks to Watch for Q2 Earnings on Jul 28: WY & OBS

Read MoreHide Full Article

With the Q2 earnings season taking center stage, investors are all eagerly waiting to note the daily beats and misses of mega companies.

Our latest Earnings Trend reveals that 117 S&P 500 companies (accounting for 44.1% of the index’s total market capitalization) have reported earnings till Jul 26, with 78.9% topping earnings per share estimates and 70.8% coming in ahead of top-line expectations.

Overall performance of the Q2 reporting cycle has been fairly good till now. The broad-based momentum has been stemmed by the better-than-expected results of companies reporting earnings in recent days.  

We currently anticipate that earnings and revenues of all the S&P 500 stocks would increase 8.7% and 4.7%, respectively, on a year-over-year basis.

While reckoning the performance of wood stocks, we believe that the improving U.S. housing market scenario would likely boost results in the second quarter. Tailwinds like an improved job market picture and upbeat consumer confidence are recovering housing market conditions in the country.

Zacks Counsel

According to the Zacks Industry classification, wood stocks are broadly grouped under the construction sector, one of the 16 Zacks sectors.

Our latest Earnings Trend (dated Jul 26, 2017) states that roughly 46.2% of the Construction stocks in the S&P 500 Group have reported results for this quarter, recording 9.8% rise in earnings and 15.2% upside in revenues on a year-over-year basis.

We project that both earnings and revenues of all the construction stocks in the S&P 500 Group would increase 17% and 9.6%, respectively, on a year-over-year basis.

What's in the Cards for these 2 Wood Stocks?

Weyerhaeuser Co. (WY - Free Report) is scheduled to report second-quarter 2017 results, before the market opens. The company’s average positive earnings surprise for the last four quarters is 1.28%. However, our proven model does not conclusively show that Weyerhaeuser will likely beat estimates in this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

That is not the case here as we will see below.

Weyerhaeuser’s Earnings ESP is -7.41%, as the Most Accurate estimate of 25 cents comes below the Zacks Consensus Estimate of 27 cents.

Weyerhaeuser Company Price and EPS Surprise

 

Weyerhaeuser Company Price and EPS Surprise | Weyerhaeuser Company Quote

Though the company carries a favorable Zacks Rank #2, we also need to have a positive ESP to be confident of an earnings beat. Notably, there has been no change in the quarterly estimate over the last seven days.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is poised to grow on the back of solid demand, the Plum Creek Timber merger and strategic investments. However, on the flip side, headwinds like stiff industry rivalry or adverse foreign currency translation impact are expected to limit growth in the quarters ahead.  (Read more: Weyerhaeuser to Report Q2 Earnings: What's in Store?)

Norbord Inc. (OSB - Free Report) is slated to report quarterly numbers, before the market opens. The company’s average positive earnings surprise for the last four quarters is 15.33%.

However, our proven model does not conclusively show that the company will likely beat on earnings in this quarter. Norbord carries a favorable Zacks Rank #3, but an Earnings ESP of 0.00% makes surprise prediction inconclusive. The stock’s Most Accurate estimate of 11 cents is in line with the

Norbord Inc. Price and EPS Surprise

 

Norbord Inc. Price and EPS Surprise | Norbord Inc. Quote

Zacks Consensus Estimate. Notably, there has been no change in the quarterly estimate over the last seven days.

More Stock News: Tech Opportunity Worth $386 Billion in 2017                 

From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.

Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity.  Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Weyerhaeuser Company (WY) - free report >>

Norbord Inc. (OSB) - free report >>


More from Zacks Analyst Blog

You May Like