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JPMorgan, FedEx and Nike are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – June 8, 2024 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan (JPM - Free Report) , FedEx (FDX - Free Report) , and Nike (NKE - Free Report) .
3 Key Things to Know About Q2 Earnings Season
With the June-quarter reporting cycle taking center stage with reports from JPMorgan and the other major banks on Friday, July 12th, it is useful to take a big-picture view of where we have been in recent periods and what is expected in the coming quarters.
We are highlighting three aspects of the overall earnings setup as we prepare to receive the coming quarterly releases.
The first thing we would like all market participants to be mindful of is the steadily accelerating earnings growth trend.
As we have noted in this space before, the +8.4% earnings growth in 2024 Q2 is the highest growth pace in almost two years.
The second thing we would like to flag here is the favorable development on the revisions front, with estimates for Q2 holding up far better than other recent periods. In the three-month period from the start of the quarter through June 30th, Q2 estimates for the S&P 500 index fell the least relative to comparable periods of other recent quarters.
The Energy sector was a notable contributor to the positive revisions trend earlier in the quarter. But as the underlying commodity prices lost ground later in the period, analysts also started reflecting that in their estimates. Aside from the Energy sector, estimates increased in the Transportation, Utilities, Tech, Autos, and Consumer Discretionary sectors.
On the negative side, estimates have been cut for 10 of the 16 Zacks sectors, with notable declines at the Industrial Products, Aerospace, Consumer Staples, Conglomerates, Construction, and others.
The third key feature to keep in mind is the robust earnings outlook for the Tech sector in general and the ‘Magnificent 7 Stocks’ in particular. The stock market leadership of the Tech and Mag 7 stocks reflects this positive earnings backdrop for the group.
The Zacks Tech sector has an outsized weight in the S&P 500 index, accounting for 41.1% of the index’s market capitalization and on track to bring 29.9% of the index’s total earnings for the coming four-quarter period. As such, the Tech sector is unlike any other sector, and trends in the sector significantly impact the aggregate picture.
As noted earlier, the Tech sector is one of the six sectors that enjoyed a favorable revisions trend in 2024 Q2, a trend that has also been in place for the last few quarters.
We are also seeing a favorable revisions trend for the back half of the year.
Please note that the Zacks Tech sector differs slightly from the Standard & Poor’s official GICs, as it is essentially a blend of the S&P’s Information Tech and Communication Services sectors.
As we have been flagging all along, the Tech sector is firmly in growth mode now, with 2024 Q2 as the fourth consecutive quarter of double-digit earnings growth. Total Tech sector earnings are expected to be up +15.7% from the same period last year on +9.6% higher revenues. Had it not been for the Tech sector’s strong growth, Q2 earnings for the rest of the index would be up only +4.8% (vs. +8.4% otherwise).
For the Mag 7 stocks, Q2 earnings are expected to be up +25.5% on +13.2% higher revenues.
Q2 Earnings Season Scorecard
We noted earlier that the July 12th quarterly report from JPMorgan and the other big banks will put the spotlight on the Q2 earnings season. But the banks aren’t the first to report the Q2 results, as the 19 S&P 500 members that have been reporting results in recent days for their respective fiscal quarters ending in May form part of our overall Q2 tally. A number of the companies in this sample of 19 index members are bellwethers like FedEx, Nike and others.
For the 19 S&P 500 members that have reported their fiscal May quarter results already, total earnings are up +25.7% from the same period last year on +4.4% higher revenues, with 84.2% beating EPS estimates and only 36.8% able to beat revenue estimates.
This is by no means a representative sample of results at this early stage, but we will be keenly looking at how the revenue beats percentage evolves in the days ahead, as we are off to a rough start on that count.
The Annual Earnings Picture
Total 2024 S&P 500 earnings are expected to be up +9.1% on +1.7% revenue growth. The expected revenue growth pace improves to +3.9% once Finance is excluded from the aggregate data, with the index level aggregate earnings growth for the year remaining unchanged at +9% on an ex-Finance basis.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Q2 Earnings Season Gets Underway
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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JPMorgan, FedEx and Nike are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – June 8, 2024 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan (JPM - Free Report) , FedEx (FDX - Free Report) , and Nike (NKE - Free Report) .
3 Key Things to Know About Q2 Earnings Season
With the June-quarter reporting cycle taking center stage with reports from JPMorgan and the other major banks on Friday, July 12th, it is useful to take a big-picture view of where we have been in recent periods and what is expected in the coming quarters.
We are highlighting three aspects of the overall earnings setup as we prepare to receive the coming quarterly releases.
The first thing we would like all market participants to be mindful of is the steadily accelerating earnings growth trend.
As we have noted in this space before, the +8.4% earnings growth in 2024 Q2 is the highest growth pace in almost two years.
The second thing we would like to flag here is the favorable development on the revisions front, with estimates for Q2 holding up far better than other recent periods. In the three-month period from the start of the quarter through June 30th, Q2 estimates for the S&P 500 index fell the least relative to comparable periods of other recent quarters.
The Energy sector was a notable contributor to the positive revisions trend earlier in the quarter. But as the underlying commodity prices lost ground later in the period, analysts also started reflecting that in their estimates. Aside from the Energy sector, estimates increased in the Transportation, Utilities, Tech, Autos, and Consumer Discretionary sectors.
On the negative side, estimates have been cut for 10 of the 16 Zacks sectors, with notable declines at the Industrial Products, Aerospace, Consumer Staples, Conglomerates, Construction, and others.
The third key feature to keep in mind is the robust earnings outlook for the Tech sector in general and the ‘Magnificent 7 Stocks’ in particular. The stock market leadership of the Tech and Mag 7 stocks reflects this positive earnings backdrop for the group.
The Zacks Tech sector has an outsized weight in the S&P 500 index, accounting for 41.1% of the index’s market capitalization and on track to bring 29.9% of the index’s total earnings for the coming four-quarter period. As such, the Tech sector is unlike any other sector, and trends in the sector significantly impact the aggregate picture.
As noted earlier, the Tech sector is one of the six sectors that enjoyed a favorable revisions trend in 2024 Q2, a trend that has also been in place for the last few quarters.
We are also seeing a favorable revisions trend for the back half of the year.
Please note that the Zacks Tech sector differs slightly from the Standard & Poor’s official GICs, as it is essentially a blend of the S&P’s Information Tech and Communication Services sectors.
As we have been flagging all along, the Tech sector is firmly in growth mode now, with 2024 Q2 as the fourth consecutive quarter of double-digit earnings growth. Total Tech sector earnings are expected to be up +15.7% from the same period last year on +9.6% higher revenues. Had it not been for the Tech sector’s strong growth, Q2 earnings for the rest of the index would be up only +4.8% (vs. +8.4% otherwise).
For the Mag 7 stocks, Q2 earnings are expected to be up +25.5% on +13.2% higher revenues.
Q2 Earnings Season Scorecard
We noted earlier that the July 12th quarterly report from JPMorgan and the other big banks will put the spotlight on the Q2 earnings season. But the banks aren’t the first to report the Q2 results, as the 19 S&P 500 members that have been reporting results in recent days for their respective fiscal quarters ending in May form part of our overall Q2 tally. A number of the companies in this sample of 19 index members are bellwethers like FedEx, Nike and others.
For the 19 S&P 500 members that have reported their fiscal May quarter results already, total earnings are up +25.7% from the same period last year on +4.4% higher revenues, with 84.2% beating EPS estimates and only 36.8% able to beat revenue estimates.
This is by no means a representative sample of results at this early stage, but we will be keenly looking at how the revenue beats percentage evolves in the days ahead, as we are off to a rough start on that count.
The Annual Earnings Picture
Total 2024 S&P 500 earnings are expected to be up +9.1% on +1.7% revenue growth. The expected revenue growth pace improves to +3.9% once Finance is excluded from the aggregate data, with the index level aggregate earnings growth for the year remaining unchanged at +9% on an ex-Finance basis.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Q2 Earnings Season Gets Underway
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.