We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in Store for Materials ETFs in Q2 Earnings?
Read MoreHide Full Article
The materials sector, which tends to be the most sensitive to global economic growth expectations, has been performing well this year, given a resilient U.S. economy. The popular ETFs — Materials Select Sector SPDR (XLB - Free Report) , Vanguard Materials ETF (VAW - Free Report) , iShares U.S. Basic Materials ETF (IYM - Free Report) and Fidelity MSCI Materials Index ETF (FMAT - Free Report) — have gained 1.7%, 1.8%, 0.6% and 1.8%, respectively, over the past three months.
Going into the Q2 earnings season, earnings releases from the sector giants will determine the movement of these funds. Some well-known players in the space, like Linde plc (LIN - Free Report) , Air Products & Chemicals (APD - Free Report) , Dow Inc. (DOW - Free Report) , Ecolab Inc. (ECL - Free Report) and Newmont (NEM - Free Report) , will report earnings in the coming days. Let’s delve into the earnings picture of these companies, as that would drive the performance of the funds dominated by them. These stocks collectively account for a 41.5% share in IYM, 41.4% in XLB, 31.3% in FMAT and 31.3% in VAW (see: all the Materials ETFs here).
According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Inside Our Surprise Prediction for These Stocks
Linde has an Earnings ESP of +1.30% and a Zacks Rank #4 (Sell). The company witnessed a positive earnings estimate revision of a couple of cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The stock’s earnings surprise track record over the past four quarters has been good, with an average beat of 2.26%. The company will report earnings on Aug 2, before market open.
Air Products & Chemicals has an Earnings ESP of -0.64% and a Zacks Rank #4. It saw no earnings estimate revision over the past 30 days for the to-be-reported quarter and delivered an earnings surprise of 0.70%, on average, for the last four quarters. The company is scheduled to report on Aug 1, before market open (read: 5 ETFs Making the Most of the Great Market Rotation).
Dow is scheduled to release earnings on Jul 25 before the opening bell. It has an Earnings ESP of -2.50% and a Zacks Rank #4. Over the past 30 days, the stock saw a negative earnings estimate revision of 3 cents for the to-be-reported quarter. The company delivered an earnings surprise of 11.36% in the last four quarters, on average.
Ecolab is set to release earnings on Jul 30 before the opening bell. It has an Earnings ESP of 0.00% and a Zacks Rank #3. The stock has seen no earnings estimate revision over the past month for the to-be-reported quarter and delivered an earnings surprise of 1.30%, on average, in the last four quarters.
Newmont has an Earnings ESP of +3.15% and a Zacks Rank #2. The company saw a positive earnings estimate revision of three cents over the past 30 days for the to-be-reported quarter. It delivered an earnings surprise of 6.38%, on average, over the last four quarters. The company is scheduled to report earnings on Jul 24 before the opening bell.
Summing Up
While the sector is expected to post a double-digit earnings decline of 20%, per the latest Earnings Trends report, some of the major players have reasonable chances of beating earnings estimates. Additionally, the sector has a favorable Zacks Rank in the top 50%, suggesting that material ETFs might see some smooth trading in the weeks ahead. Additionally, the abovementioned ETFs have a favorable Zacks ETF Rank #2 or #3.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
What's in Store for Materials ETFs in Q2 Earnings?
The materials sector, which tends to be the most sensitive to global economic growth expectations, has been performing well this year, given a resilient U.S. economy. The popular ETFs — Materials Select Sector SPDR (XLB - Free Report) , Vanguard Materials ETF (VAW - Free Report) , iShares U.S. Basic Materials ETF (IYM - Free Report) and Fidelity MSCI Materials Index ETF (FMAT - Free Report) — have gained 1.7%, 1.8%, 0.6% and 1.8%, respectively, over the past three months.
Going into the Q2 earnings season, earnings releases from the sector giants will determine the movement of these funds. Some well-known players in the space, like Linde plc (LIN - Free Report) , Air Products & Chemicals (APD - Free Report) , Dow Inc. (DOW - Free Report) , Ecolab Inc. (ECL - Free Report) and Newmont (NEM - Free Report) , will report earnings in the coming days. Let’s delve into the earnings picture of these companies, as that would drive the performance of the funds dominated by them. These stocks collectively account for a 41.5% share in IYM, 41.4% in XLB, 31.3% in FMAT and 31.3% in VAW (see: all the Materials ETFs here).
According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Inside Our Surprise Prediction for These Stocks
Linde has an Earnings ESP of +1.30% and a Zacks Rank #4 (Sell). The company witnessed a positive earnings estimate revision of a couple of cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The stock’s earnings surprise track record over the past four quarters has been good, with an average beat of 2.26%. The company will report earnings on Aug 2, before market open.
Air Products & Chemicals has an Earnings ESP of -0.64% and a Zacks Rank #4. It saw no earnings estimate revision over the past 30 days for the to-be-reported quarter and delivered an earnings surprise of 0.70%, on average, for the last four quarters. The company is scheduled to report on Aug 1, before market open (read: 5 ETFs Making the Most of the Great Market Rotation).
Dow is scheduled to release earnings on Jul 25 before the opening bell. It has an Earnings ESP of -2.50% and a Zacks Rank #4. Over the past 30 days, the stock saw a negative earnings estimate revision of 3 cents for the to-be-reported quarter. The company delivered an earnings surprise of 11.36% in the last four quarters, on average.
Ecolab is set to release earnings on Jul 30 before the opening bell. It has an Earnings ESP of 0.00% and a Zacks Rank #3. The stock has seen no earnings estimate revision over the past month for the to-be-reported quarter and delivered an earnings surprise of 1.30%, on average, in the last four quarters.
Newmont has an Earnings ESP of +3.15% and a Zacks Rank #2. The company saw a positive earnings estimate revision of three cents over the past 30 days for the to-be-reported quarter. It delivered an earnings surprise of 6.38%, on average, over the last four quarters. The company is scheduled to report earnings on Jul 24 before the opening bell.
Summing Up
While the sector is expected to post a double-digit earnings decline of 20%, per the latest Earnings Trends report, some of the major players have reasonable chances of beating earnings estimates. Additionally, the sector has a favorable Zacks Rank in the top 50%, suggesting that material ETFs might see some smooth trading in the weeks ahead. Additionally, the abovementioned ETFs have a favorable Zacks ETF Rank #2 or #3.