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Buy 5 Top Stocks Poised to Beat Earnings Estimates This Week

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The fourth-quarter 2019 earnings releases have been showing steady improvement so far. Below we discuss five top-ranked mid-cap stocks that are poised to beat earnings estimates this week.

Better-Than-Expected Fourth-Quarter Earnings So Far

Fourth-quarter 2019 earnings results have been improving significantly. In fact, overall earnings expectations have rebounded and are in positive territory. As of Feb 14, 388 S&P 500 members reported fourth-quarter earnings results. Total earnings of these companies are up 1.3% from the same period last year on 4.8% higher revenues. Of the total, 72.9% surpassed EPS estimates while 66.2% outpaced revenue estimates.

Overall, fourth-quarter 2019 earnings for the S&P 500 Index were projected to be up 0.8% year over year on 4.3% higher revenues. This suggests a complete turnaround from earnings decline of 3.2% year over year on 3.5% higher revenues, projected at the beginning of the reporting cycle. (Read More: Key Takeaways from the Q4 Earnings Season)

5 Stocks Set to Surpass Earnings Estimates

We have narrowed down our search to five companies that are gearing up to release their earnings results this week. Each of these stocks carry 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 after 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 past three years.

 

Jack in the Box Inc. (JACK - Free Report) is a restaurant company that operates and franchises through Jack in the Box quick-service restaurants, and is one of the nation’s largest hamburger chains. The company has an Earnings ESP of +1.56% for first-quarter fiscal 2020 (ended December).

Jack in the Box  has an expected earnings growth rate of 4.1% for the current year (ending September 2020). The trailing four-quarter positive earnings surprise is 4.9%, on average. The Zacks Rank #2 company is set to release earnings results on Feb 19, after the closing bell.

TPG Specialty Lending Inc. (TSLX - Free Report) is a specialty finance company. It is focused on providing fully-underwritten capital solutions to middle market companies. The company has an Earnings ESP of +4.26% for fourth-quarter 2019.

TPG Specialty Lending has an expected earnings growth rate of 2.9% for the current year. The Zacks Consensus Estimate for the current year has improved 1% over the last 30 days. The trailing four-quarter positive earnings surprise is 9.2%, on average. The Zacks Rank #2 company is set to release earnings results on Feb 19, after the closing bell.

Nordson Corp. (NDSN - Free Report) engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide. The company has an Earnings ESP of +2.10% for first-quarter fiscal 2020 (ended January).

Nordson has an expected earnings growth rate of 1.7% for the current year (ending October 2020). The Zacks Consensus Estimate for the current year has improved 1% over the last 30 days. The Zacks Rank #2 company is set to release quarterly numbers on Feb 19, after the closing bell.

Hormel Foods Corp. (HRL - Free Report) produces and markets various meat and food products to retail, foodservice, deli, and commercial customers in the United States and internationally. It operates through four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store and International & Other. The company has an Earnings ESP of +1.10% for first-quarter fiscal 2020 (ended January).

Hormel Foods has an expected earnings growth rate of 2.9% for the current year. The Zacks Consensus Estimate for the current year has improved 0.6% over the last 30 days. The trailing four-quarter positive earnings surprise is 2.6%, on average. The Zacks Rank #2 company is set to release earnings results on Feb 20, before the opening bell.

Builders FirstSource Inc. (BLDR - Free Report) manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. It operates through four segments: Northeast, Southeast, South and West. The company has an Earnings ESP of +1.45% for fourth-quarter 2019.

Builders FirstSource has an expected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for the current year has improved 0.5% over the last 30 days. The trailing four-quarter positive earnings surprise is 28.20%, on average. The Zacks Rank #1 company is set to release financial numbers on Feb 20, after the closing bell.

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