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3 Transportation Stocks Poised to Beat Q3 Earnings Estimates
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The widely diversified Zacks Transportation sector comprising airlines, railroads, trucking and shipping companies, among others, is being aided improved freight demand, impressive e-commerce demand and the rebound in demand for air-travel after enduring pandemic lows.
These positives contributed to the results of a handful of sector participants who already reported third-quarter 2022 results. With the majority of transportation stocks yet to report earnings numbers, the same tailwinds should help entities like Copa Holdings (CPA - Free Report) , JetBlue Airways (JBLU - Free Report) and United Parcel Service (UPS - Free Report) post better-than-expected earnings per share for the September quarter.
Let’s delve deep into the factors that are likely to boost the third-quarter results of the sector participants who are yet to announce earnings figures.
Owing to the uptick in economic activities, freight demand is strong. This is supporting growth for some sector participants.The Cass Freight shipments Index improved 4.8% year over year in September. The index improved year over year in each of the three months (July, August and September) of the third quarter. Upbeat crude and product tanker rates should aid results of the shipping companies in the September quarter.
Even though economies are reopening, consumers’ urge for online shopping refuses to relent. Apart from consumer habits, the digitalization-related trend is helping e-commerce demand stay strong. This bodes well for companies like UPS.
Another major positive is the stronger-than-expected recovery in air-travel demand. People are again resorting to air-travel as they resume their normal activities. Strong passenger volumes are likely to drive results of the yet-to-report airline companies. The Labor Day holiday period during the quarter is likely to bolster passenger revenues, further improving results.
The Zacks Earnings Preview report suggests that the transportation sector’s quarterly earnings are likely to increase 51.5% from the third-quarter 2021 actuals.
How to Pick the Right Stocks
Against the current backdrop and amid a large number of transportation stocks, it is always a daunting task for investors to pick a winning basket of stocks with the potential to deliver better-than-expected earnings.
While there is no foolproof method of choosing outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks with high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this perfect mix of elements, the odds of an earnings beat are as high as 70%.
The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Upbeat air-travel demand on the domestic front is expected to have aided the third-quarter performance of this Latin American carrier. CPA’s earnings surpassed the Zacks Consensus in each of the last four quarters, the average beat being 174.2%.
UPS, scheduled to report third-quarter 2022 results on Oct 25, currently has an Earnings ESP of +0.60% and a Zacks Rank #3.
High shipping rates and impressive e-commerce demand are likely to boost results. UPS’ bottom line surpassed the Zacks Consensus in each of the last four quarters, the average being 8.5%.
United Parcel Service, Inc. Price and EPS Surprise
JetBlue Airways has an Earnings ESP of +1.67% and a Zacks Rank of 3, presently. JBLU will release results on Oct 25.
Strong air-travel demand (particularly for leisure) is expected to have aided JBLU’S performance in the September quarter. JBLU’s earnings surpassed the Zacks Consensus in three of the last four quarters (missing the consensus mark in the remaining quarter.
JetBlue Airways Corporation Price and EPS Surprise
Image: Bigstock
3 Transportation Stocks Poised to Beat Q3 Earnings Estimates
The widely diversified Zacks Transportation sector comprising airlines, railroads, trucking and shipping companies, among others, is being aided improved freight demand, impressive e-commerce demand and the rebound in demand for air-travel after enduring pandemic lows.
These positives contributed to the results of a handful of sector participants who already reported third-quarter 2022 results. With the majority of transportation stocks yet to report earnings numbers, the same tailwinds should help entities like Copa Holdings (CPA - Free Report) , JetBlue Airways (JBLU - Free Report) and United Parcel Service (UPS - Free Report) post better-than-expected earnings per share for the September quarter.
Let’s delve deep into the factors that are likely to boost the third-quarter results of the sector participants who are yet to announce earnings figures.
Owing to the uptick in economic activities, freight demand is strong. This is supporting growth for some sector participants.The Cass Freight shipments Index improved 4.8% year over year in September. The index improved year over year in each of the three months (July, August and September) of the third quarter. Upbeat crude and product tanker rates should aid results of the shipping companies in the September quarter.
Even though economies are reopening, consumers’ urge for online shopping refuses to relent. Apart from consumer habits, the digitalization-related trend is helping e-commerce demand stay strong. This bodes well for companies like UPS.
Another major positive is the stronger-than-expected recovery in air-travel demand. People are again resorting to air-travel as they resume their normal activities. Strong passenger volumes are likely to drive results of the yet-to-report airline companies. The Labor Day holiday period during the quarter is likely to bolster passenger revenues, further improving results.
The Zacks Earnings Preview report suggests that the transportation sector’s quarterly earnings are likely to increase 51.5% from the third-quarter 2021 actuals.
How to Pick the Right Stocks
Against the current backdrop and amid a large number of transportation stocks, it is always a daunting task for investors to pick a winning basket of stocks with the potential to deliver better-than-expected earnings.
While there is no foolproof method of choosing outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks with high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this perfect mix of elements, the odds of an earnings beat are as high as 70%.
The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our Choices
Copa Holdings currently has an Earnings ESP of +7.28% and a Zacks Rank of 2. CPA will release results on Nov 16. You can see the complete list of today’s Zacks #1 Rank stocks here.
Upbeat air-travel demand on the domestic front is expected to have aided the third-quarter performance of this Latin American carrier. CPA’s earnings surpassed the Zacks Consensus in each of the last four quarters, the average beat being 174.2%.
Copa Holdings, S.A. Price and EPS Surprise
Copa Holdings, S.A. price-eps-surprise | Copa Holdings, S.A. Quote
UPS, scheduled to report third-quarter 2022 results on Oct 25, currently has an Earnings ESP of +0.60% and a Zacks Rank #3.
High shipping rates and impressive e-commerce demand are likely to boost results. UPS’ bottom line surpassed the Zacks Consensus in each of the last four quarters, the average being 8.5%.
United Parcel Service, Inc. Price and EPS Surprise
United Parcel Service, Inc. price-eps-surprise | United Parcel Service, Inc. Quote
JetBlue Airways has an Earnings ESP of +1.67% and a Zacks Rank of 3, presently. JBLU will release results on Oct 25.
Strong air-travel demand (particularly for leisure) is expected to have aided JBLU’S performance in the September quarter. JBLU’s earnings surpassed the Zacks Consensus in three of the last four quarters (missing the consensus mark in the remaining quarter.
JetBlue Airways Corporation Price and EPS Surprise
JetBlue Airways Corporation price-eps-surprise | JetBlue Airways Corporation Quote