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Wall Street is continuing its bull run for four months in a row. All the major stock indexes have surged by double digit growth so far in 2019. Last week, the market benchmark S&P 500 Index and tech-heavy Nasdaq Composite recorded new all-time highs. The blue-chip Dow 30 Index is currently within striking distance to set a new record.
Are First-Quarter Earnings Showing Some Surprises?
As of Apr 26, 230 companies on the S&P 500 Index reported first-quarter 2019 earnings results. Total earnings of these companies were up 0.5% year over year on 3.7% higher revenues. Of the 230 companies, 79.1% have beaten earnings estimate and 58.7% have beaten revenue estimates.
Total earnings for the benchmark index are now expected to be down 1.6% from the same period last year on 4.5% higher revenues. This would be an improvement from an expected earnings decline of nearly 4% at the beginning of the earnings period. (Read More: Positive EPS Beats 2nd Highest in 5 Years)
5 Top Stocks Likely to Gain on Earnings
We have narrowed down our search to five large companies which will release their earnings results this week. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank 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 expected to soar close on the heels of earnings release irrespective of already solid gains year to date.
Cigna Corp. (CI - Free Report) is a health service organization, providing insurance and related products and services in the United States and internationally. It operates through Integrated Medical, Health Services, International Markets, and Group Disability and Other segments.
In December 2018, Cigna acquired the largest pharmacy benefit manager Express Scripts Holding for $67 billion, including $15 billion in debt. The merged company is now a one-stop shop for customers' healthcare needs, ranging from sale of drugs to insurance cover.
The merged entity would benefit consumers by bringing together the medical care and pharmacy benefits under one roof to improve treatments and lower costs. The transaction would result in total cost synergies of $650 million and double-digit accretion to earnings in 2019.
Cigna has an expected earnings growth rate of 15.5% for the current year. It has an Earnings ESP of +5.14% for the quarter to be reported and sports a Zacks Rank #1. The company generated positive earnings surprises in three out of the last four reported quarters, with an average beat of 11.8%. Cigna is expected to release earnings results on May 2, before the opening bell.
Ceridian HCM Holding Inc. operates as a human capital management (HCM) software company in the United States and internationally. The company offers Dayforce, a cloud platform that provides human resources (HR), payroll, benefits, workforce management, and talent management functionality; and Powerpay, a cloud platform, which offers scalable and straightforward payroll and HR solutions. It also provides solutions for payroll and payroll-related services.
Ceridian HCM Holding has an expected earnings growth rate of 980% for the current year. It has an Earnings ESP of +31.65% for the quarter to be reported. It sports a Zacks Rank #1.The company generated positive earnings surprises in two out of the last four reported quarters, with an average beat of 54.2%.
The Zacks Consensus Estimate for the current quarter and year has improved 11.1% and 2.3%, respectively, over the last 30 days. Ceridian HCM Holding is expected to release earnings results on May 1, after the closing bell.
Arconic Inc. engineers, manufactures, and sells lightweight metals worldwide. The company operates in three segments: Engineered Products and Solutions, Global Rolled Products, and Transportation and Construction Solutions.
Arconic is focusing on operational cost reduction and productivity improvements across its businesses, which should lend support to its bottom line. It is expected to continue to benefit from its cost actions in 2019. The company plans to cut operating costs by around $200 million on an annual run-rate basis with a significant impact of the program expected in 2019.
Arconic is seeing strong demand in the aerospace market. It holds the number one market position in aluminum sheet and plate for the aerospace industry globally. Arconic expects growth in the aerospace market to be supported by strength in the commercial segment on higher air travel demand, new aircraft orders and strong order backlog.
Arconic has an expected earnings growth rate of 23.5% for the current year. It has an Earnings ESP of +5.06% for the quarter to be reported and carries a Zacks Rank #2. The company generated positive earnings surprises in the last four quarters, with an average beat of 12.6%. Arconic is expected to release earnings results on Apr 30, before the opening bell.
The Estée Lauder Companies Inc. (EL - Free Report) is one of the world's leading manufacturers and marketers of quality skin care, makeup, and fragrance and hair care products. The company's products are sold in over 150 countries and territories.
Estee Lauder has made several strategic acquisitions to enhance its portfolio. The acquisitions of BECCA and Too Faced (during first-quarter fiscal 2017) have strengthened its fastest-growing prestige portfolio.
The investment in DECIEM — a fast-growing multi-brand company is also likely to aid beauty sales. The company’s previous moves in this regard include the buyout of sophisticated Paris-based brand — By Kilian and the takeover of the key prestige skin care brands — RODIN olio lusso and GLAMGLOW. Apart from skin care, Estee Lauder acquired high-end fragrance and lifestyle brand, Le Labo (The Lab) and high-end fragrance brand Editions de Parfums Frédéric Malle in October 2014 and January 2015, respectively.
Estée Lauder has an expected earnings growth rate of 12.6% for the current year. It has an Earnings ESP of +0.77% for the quarter to be reported and a Zacks Rank #2. The company delivered positive earnings surprises in the trailing four quarters, with an average beat of 11.7%. Estée Lauder is expected to release earnings results on May 1, before the opening bell.
Fortinet Inc. (FTNT - Free Report) is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. Its solutions are designed to integrate multiple levels of security protection, including firewall, virtual private networking, antivirus, intrusion prevention, Web filtering, antispam and wide area network acceleration.
Through its products and subscription services, the company provides integrated protection against dynamic security threats while simplifying the IT security infrastructure. The company’s flagship UTM solution consists of FortiGate appliance product line and FortiGuard security subscription services.
Fortinet has an expected earnings growth rate of 13% for the current year. It has an Earnings ESP of +1.49% for the quarter to be reported and carries a Zacks Rank #2. The company generated positive earnings surprises in the last four quarters, with an average beat of 18.8%. Fortinet is expected to release earnings results on May 2, after the closing bell.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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5 Top Stocks to Buy Ahead of Earnings This Week
Wall Street is continuing its bull run for four months in a row. All the major stock indexes have surged by double digit growth so far in 2019. Last week, the market benchmark S&P 500 Index and tech-heavy Nasdaq Composite recorded new all-time highs. The blue-chip Dow 30 Index is currently within striking distance to set a new record.
Are First-Quarter Earnings Showing Some Surprises?
As of Apr 26, 230 companies on the S&P 500 Index reported first-quarter 2019 earnings results. Total earnings of these companies were up 0.5% year over year on 3.7% higher revenues. Of the 230 companies, 79.1% have beaten earnings estimate and 58.7% have beaten revenue estimates.
Total earnings for the benchmark index are now expected to be down 1.6% from the same period last year on 4.5% higher revenues. This would be an improvement from an expected earnings decline of nearly 4% at the beginning of the earnings period. (Read More: Positive EPS Beats 2nd Highest in 5 Years)
5 Top Stocks Likely to Gain on Earnings
We have narrowed down our search to five large companies which will release their earnings results this week. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank 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 expected to soar close on the heels of earnings release irrespective of already solid gains year to date.
Cigna Corp. (CI - Free Report) is a health service organization, providing insurance and related products and services in the United States and internationally. It operates through Integrated Medical, Health Services, International Markets, and Group Disability and Other segments.
In December 2018, Cigna acquired the largest pharmacy benefit manager Express Scripts Holding for $67 billion, including $15 billion in debt. The merged company is now a one-stop shop for customers' healthcare needs, ranging from sale of drugs to insurance cover.
The merged entity would benefit consumers by bringing together the medical care and pharmacy benefits under one roof to improve treatments and lower costs. The transaction would result in total cost synergies of $650 million and double-digit accretion to earnings in 2019.
Cigna has an expected earnings growth rate of 15.5% for the current year. It has an Earnings ESP of +5.14% for the quarter to be reported and sports a Zacks Rank #1. The company generated positive earnings surprises in three out of the last four reported quarters, with an average beat of 11.8%. Cigna is expected to release earnings results on May 2, before the opening bell.
Ceridian HCM Holding Inc. operates as a human capital management (HCM) software company in the United States and internationally. The company offers Dayforce, a cloud platform that provides human resources (HR), payroll, benefits, workforce management, and talent management functionality; and Powerpay, a cloud platform, which offers scalable and straightforward payroll and HR solutions. It also provides solutions for payroll and payroll-related services.
Ceridian HCM Holding has an expected earnings growth rate of 980% for the current year. It has an Earnings ESP of +31.65% for the quarter to be reported. It sports a Zacks Rank #1.The company generated positive earnings surprises in two out of the last four reported quarters, with an average beat of 54.2%.
The Zacks Consensus Estimate for the current quarter and year has improved 11.1% and 2.3%, respectively, over the last 30 days. Ceridian HCM Holding is expected to release earnings results on May 1, after the closing bell.
Arconic Inc. engineers, manufactures, and sells lightweight metals worldwide. The company operates in three segments: Engineered Products and Solutions, Global Rolled Products, and Transportation and Construction Solutions.
Arconic is focusing on operational cost reduction and productivity improvements across its businesses, which should lend support to its bottom line. It is expected to continue to benefit from its cost actions in 2019. The company plans to cut operating costs by around $200 million on an annual run-rate basis with a significant impact of the program expected in 2019.
Arconic is seeing strong demand in the aerospace market. It holds the number one market position in aluminum sheet and plate for the aerospace industry globally. Arconic expects growth in the aerospace market to be supported by strength in the commercial segment on higher air travel demand, new aircraft orders and strong order backlog.
Arconic has an expected earnings growth rate of 23.5% for the current year. It has an Earnings ESP of +5.06% for the quarter to be reported and carries a Zacks Rank #2. The company generated positive earnings surprises in the last four quarters, with an average beat of 12.6%. Arconic is expected to release earnings results on Apr 30, before the opening bell.
The Estée Lauder Companies Inc. (EL - Free Report) is one of the world's leading manufacturers and marketers of quality skin care, makeup, and fragrance and hair care products. The company's products are sold in over 150 countries and territories.
Estee Lauder has made several strategic acquisitions to enhance its portfolio. The acquisitions of BECCA and Too Faced (during first-quarter fiscal 2017) have strengthened its fastest-growing prestige portfolio.
The investment in DECIEM — a fast-growing multi-brand company is also likely to aid beauty sales. The company’s previous moves in this regard include the buyout of sophisticated Paris-based brand — By Kilian and the takeover of the key prestige skin care brands — RODIN olio lusso and GLAMGLOW. Apart from skin care, Estee Lauder acquired high-end fragrance and lifestyle brand, Le Labo (The Lab) and high-end fragrance brand Editions de Parfums Frédéric Malle in October 2014 and January 2015, respectively.
Estée Lauder has an expected earnings growth rate of 12.6% for the current year. It has an Earnings ESP of +0.77% for the quarter to be reported and a Zacks Rank #2. The company delivered positive earnings surprises in the trailing four quarters, with an average beat of 11.7%. Estée Lauder is expected to release earnings results on May 1, before the opening bell.
Fortinet Inc. (FTNT - Free Report) is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. Its solutions are designed to integrate multiple levels of security protection, including firewall, virtual private networking, antivirus, intrusion prevention, Web filtering, antispam and wide area network acceleration.
Through its products and subscription services, the company provides integrated protection against dynamic security threats while simplifying the IT security infrastructure. The company’s flagship UTM solution consists of FortiGate appliance product line and FortiGuard security subscription services.
Fortinet has an expected earnings growth rate of 13% for the current year. It has an Earnings ESP of +1.49% for the quarter to be reported and carries a Zacks Rank #2. The company generated positive earnings surprises in the last four quarters, with an average beat of 18.8%. Fortinet is expected to release earnings results on May 2, after the closing bell.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>