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5 Stocks Worth a Look From Leading Sectors This Earnings Season
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The second-quarter 2024 earnings season will kick off this week, with banking sector players due to report numbers. The overall picture ahead of this reporting cycle is one of continued resilience, marked by a steadily improving outlook and a favorable revision trend.
While most of the stocks are expected to outperform this earnings season, we have zeroed in on the best stocks of the sectors that have a high chance of surprising in their upcoming releases. These stocks — Apple (AAPL - Free Report) , HCA Healthcare (HCA - Free Report) , Expro International Group Holdings Ltd. (XPRO - Free Report) , Churchill Downs (CHDN - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) — could make great plays as the earnings season unfolds and will likely move higher in the days to come.
Q2 Earnings Trend
Total S&P 500 earnings are expected to be up 8.6% from the year-ago period on 4.7% higher revenues, per the latest Earnings Trends. This will be the highest earnings growth rate since the 9.9% growth rate in the first quarter of 2022. Though estimates have steadily come down since the start of the quarter, the magnitude of declines is far smaller relative to the comparable periods of other recent quarters.
Of the 16 Zacks sectors, nine are expected to post earnings growth in the second quarter, with the strongest gains in the Technology sector (15.8%). This would be followed by Healthcare (19.0%), Energy (10.9%), Consumer Discretionary (12.5%) and Finance (9.0%). In particular, second-quarter earnings of the “Magnificent 7” companies are expected to be up 25.5% from the same period last year on 13.2% higher revenues.
The energy sector is likely to register earnings growth in the second quarter after witnessing declines in the preceding four quarters.
How to Choose Stocks?
An earnings beat will definitely inspire investors’ confidence and propel the price of stocks higher. Picking the star performers would be easy if we go by our proprietary methodology that selects stocks with a combination of a positive Earnings ESP and a favorable Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst revisions. This is done because if an analyst reevaluates their estimate right before an earnings release, it means that they have fresh information that could potentially be more accurate than what analysts thought about a company two or three months ago.
Stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 or better produced an earnings surprise 70% of the time. Best of all, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10-year backtest. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Technology
Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories worldwide. The company offers iPhone, Mac, iPad and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod.
It has an Earnings ESP of +3.23% and a Zacks Rank #2.
Apple, which was way behind its competitors in adopting AI, is finally in the game. The introduction of numerous AI-powered features at its recent Worldwide Developers Conference is expected to kickstart the next upgrade cycle, enhancing the company's performance and restoring investor confidence in Apple. This helped the stock to become more valuable and the first company to reach a market capitalization of $3.5 trillion.
Per the latest report from IDC, Apple expects 21% growth in personal computer shipments in the second quarter, the biggest jump among global PC makers. Revenues from Apple's App Store rose 13% for the fiscal third quarter, per an analyst at Bank of America, amid concerns about the technology giant's market share in China and a new European Union law that could affect the service.
The Zacks Consensus Estimate for the yet-to-be-reported quarter has been revised upward by a penny to $1.33 over the past seven days, implying growth of 5.6%. Apple delivered an earnings surprise of 4.14% on average in the last four quarters. It is scheduled to report earnings on Aug 1 after market close.
HCA Healthcare is the largest non-governmental operator of acute care hospitals in the United States. It operates hospitals and related healthcare entities. The stock has an Earnings ESP of +7.10% and a Zacks Rank #2.
The company is benefiting from improved patient volumes, which remain the primary contributor to any healthcare facility operator's top line. An increase in elective and outpatient surgeries, which translates to higher occupancy levels, will continue to provide a boost to revenues.
HCA Healthcare saw a positive earnings estimate revision of 6 cents over the past 30 days for the yet-to-be-reported quarter, indicating growth of 15.8%. HCA Healthcare delivered an average earnings surprise of 0.47% in the past four quarters. The company is slated to release earnings on Jul 23.
Expro International is an oil and gas service company. It has an Earnings ESP of +2.04% and a Zacks Rank #2.
Expro is well-positioned in the drilling and completions levered businesses, which will drive profitability and shareholder returns. The company reiterated its 2024 revenue guidance in the range of $1.6-$1.7 billion. Additionally, the international and offshore markets, which are in the early stages of a multi-year growth phase, are expected to get stronger in the coming months.
The stock has seen an upward earnings estimate revision of a penny over the past month for the to-be-reported quarter and has an expected earnings growth rate of 47.1%. Expro International delivered an average earnings surprise of 78.41% for the last four quarters. The company is slated to release earnings on Jul 25.
Expro Group Holdings N.V. Price, Consensus and EPS Surprise
Churchill Downs operates as a racing, online wagering and gaming entertainment company in the United States. It has an Earnings ESP of +0.19% and a Zacks Rank #2.
The global betting and gaming industry boasts a solid outlook that will drive the company’s revenues and profitability higher. Rising demand for Internet connectivity, the growing popularity of online betting, increasing smartphone adoption and the introduction of high-bandwidth networks like 5G will continue to fuel the company’s growth.
The stock has seen a positive earnings estimate revision of a couple of cents for the yet-to-be-reported quarter and has an expected growth rate of 21%. Churchill Downs delivered an earnings surprise of 16.13% for the past four quarters on average and is slated to release earnings on Jul 24.
Churchill Downs, Incorporated Price, Consensus and EPS Surprise
JPMorgan is one of the biggest global banks, with assets worth $4.09 trillion and stockholders’ equity worth $336.6 billion as of Mar 31, 2024. With operations in more than 60 countries, the company is one of the largest financial service firms in the world. It has an Earnings ESP of +0.57% and a Zacks Rank #3.
The company is poised for continued positive performance once the Fed starts reducing interest rates. Unlike smaller banks, JPMorgan benefits from a cost advantage in attracting low-cost deposits and can efficiently spread its substantial expenses over a larger revenue base. This dynamic supports strong and consistent profitability.
JPMorgan saw a positive earnings estimate revision of 3 cents for the yet-to-be-reported quarter in the past seven days but its earnings are expected to decline 4.1% from the year-ago quarter. It delivered an earnings surprise of 12.31%, on average, for the past four quarters. JPM is slated to release earnings on Jul 12.
JPMorgan Chase & Co. Price, Consensus and EPS Surprise
Image: Bigstock
5 Stocks Worth a Look From Leading Sectors This Earnings Season
The second-quarter 2024 earnings season will kick off this week, with banking sector players due to report numbers. The overall picture ahead of this reporting cycle is one of continued resilience, marked by a steadily improving outlook and a favorable revision trend.
While most of the stocks are expected to outperform this earnings season, we have zeroed in on the best stocks of the sectors that have a high chance of surprising in their upcoming releases. These stocks — Apple (AAPL - Free Report) , HCA Healthcare (HCA - Free Report) , Expro International Group Holdings Ltd. (XPRO - Free Report) , Churchill Downs (CHDN - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) — could make great plays as the earnings season unfolds and will likely move higher in the days to come.
Q2 Earnings Trend
Total S&P 500 earnings are expected to be up 8.6% from the year-ago period on 4.7% higher revenues, per the latest Earnings Trends. This will be the highest earnings growth rate since the 9.9% growth rate in the first quarter of 2022. Though estimates have steadily come down since the start of the quarter, the magnitude of declines is far smaller relative to the comparable periods of other recent quarters.
Of the 16 Zacks sectors, nine are expected to post earnings growth in the second quarter, with the strongest gains in the Technology sector (15.8%). This would be followed by Healthcare (19.0%), Energy (10.9%), Consumer Discretionary (12.5%) and Finance (9.0%). In particular, second-quarter earnings of the “Magnificent 7” companies are expected to be up 25.5% from the same period last year on 13.2% higher revenues.
The energy sector is likely to register earnings growth in the second quarter after witnessing declines in the preceding four quarters.
How to Choose Stocks?
An earnings beat will definitely inspire investors’ confidence and propel the price of stocks higher. Picking the star performers would be easy if we go by our proprietary methodology that selects stocks with a combination of a positive Earnings ESP and a favorable Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst revisions. This is done because if an analyst reevaluates their estimate right before an earnings release, it means that they have fresh information that could potentially be more accurate than what analysts thought about a company two or three months ago.
Stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 or better produced an earnings surprise 70% of the time. Best of all, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10-year backtest. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Technology
Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories worldwide. The company offers iPhone, Mac, iPad and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod.
It has an Earnings ESP of +3.23% and a Zacks Rank #2.
Apple, which was way behind its competitors in adopting AI, is finally in the game. The introduction of numerous AI-powered features at its recent Worldwide Developers Conference is expected to kickstart the next upgrade cycle, enhancing the company's performance and restoring investor confidence in Apple. This helped the stock to become more valuable and the first company to reach a market capitalization of $3.5 trillion.
Per the latest report from IDC, Apple expects 21% growth in personal computer shipments in the second quarter, the biggest jump among global PC makers. Revenues from Apple's App Store rose 13% for the fiscal third quarter, per an analyst at Bank of America, amid concerns about the technology giant's market share in China and a new European Union law that could affect the service.
The Zacks Consensus Estimate for the yet-to-be-reported quarter has been revised upward by a penny to $1.33 over the past seven days, implying growth of 5.6%. Apple delivered an earnings surprise of 4.14% on average in the last four quarters. It is scheduled to report earnings on Aug 1 after market close.
Apple Inc. Price, Consensus and EPS Surprise
Apple Inc. price-consensus-eps-surprise-chart | Apple Inc. Quote
Healthcare
HCA Healthcare is the largest non-governmental operator of acute care hospitals in the United States. It operates hospitals and related healthcare entities. The stock has an Earnings ESP of +7.10% and a Zacks Rank #2.
The company is benefiting from improved patient volumes, which remain the primary contributor to any healthcare facility operator's top line. An increase in elective and outpatient surgeries, which translates to higher occupancy levels, will continue to provide a boost to revenues.
HCA Healthcare saw a positive earnings estimate revision of 6 cents over the past 30 days for the yet-to-be-reported quarter, indicating growth of 15.8%. HCA Healthcare delivered an average earnings surprise of 0.47% in the past four quarters. The company is slated to release earnings on Jul 23.
HCA Healthcare, Inc. Price, Consensus and EPS
Surprise
HCA Healthcare, Inc. price-consensus-eps-surprise-chart | HCA Healthcare, Inc. Quote
Energy
Expro International is an oil and gas service company. It has an Earnings ESP of +2.04% and a Zacks Rank #2.
Expro is well-positioned in the drilling and completions levered businesses, which will drive profitability and shareholder returns. The company reiterated its 2024 revenue guidance in the range of $1.6-$1.7 billion. Additionally, the international and offshore markets, which are in the early stages of a multi-year growth phase, are expected to get stronger in the coming months.
The stock has seen an upward earnings estimate revision of a penny over the past month for the to-be-reported quarter and has an expected earnings growth rate of 47.1%. Expro International delivered an average earnings surprise of 78.41% for the last four quarters. The company is slated to release earnings on Jul 25.
Expro Group Holdings N.V. Price, Consensus and EPS Surprise
Expro Group Holdings N.V. price-consensus-eps-surprise-chart | Expro Group Holdings N.V. Quote
Consumer Discretionary
Churchill Downs operates as a racing, online wagering and gaming entertainment company in the United States. It has an Earnings ESP of +0.19% and a Zacks Rank #2.
The global betting and gaming industry boasts a solid outlook that will drive the company’s revenues and profitability higher. Rising demand for Internet connectivity, the growing popularity of online betting, increasing smartphone adoption and the introduction of high-bandwidth networks like 5G will continue to fuel the company’s growth.
The stock has seen a positive earnings estimate revision of a couple of cents for the yet-to-be-reported quarter and has an expected growth rate of 21%. Churchill Downs delivered an earnings surprise of 16.13% for the past four quarters on average and is slated to release earnings on Jul 24.
Churchill Downs, Incorporated Price, Consensus and EPS Surprise
Churchill Downs, Incorporated price-consensus-eps-surprise-chart | Churchill Downs, Incorporated Quote
Finance
JPMorgan is one of the biggest global banks, with assets worth $4.09 trillion and stockholders’ equity worth $336.6 billion as of Mar 31, 2024. With operations in more than 60 countries, the company is one of the largest financial service firms in the world. It has an Earnings ESP of +0.57% and a Zacks Rank #3.
The company is poised for continued positive performance once the Fed starts reducing interest rates. Unlike smaller banks, JPMorgan benefits from a cost advantage in attracting low-cost deposits and can efficiently spread its substantial expenses over a larger revenue base. This dynamic supports strong and consistent profitability.
JPMorgan saw a positive earnings estimate revision of 3 cents for the yet-to-be-reported quarter in the past seven days but its earnings are expected to decline 4.1% from the year-ago quarter. It delivered an earnings surprise of 12.31%, on average, for the past four quarters. JPM is slated to release earnings on Jul 12.
JPMorgan Chase & Co. Price, Consensus and EPS Surprise
JPMorgan Chase & Co. price-consensus-eps-surprise-chart | JPMorgan Chase & Co. Quote