Intriguingly, several top-rated Zacks stocks are standing out from various sectors after beating earnings expectations on Wednesday.
With opportunity brewing, Sherwin-Williams (SHW), Kimberly-Clark (KMB), and PACCAR (PCAR) are three such stocks that investors should consider.
Let’s review their strong quarterly reports and see why now is a good time to buy going forward.
Sherwin-Williams Q2 Review: There was a lot to like about Sherwin-Williams’ Q2 report on Wednesday and its stock currently flaunts a Zacks Rank #1 (Strong Buy).
Highlights included gross margin improving 46% YoY driven by strong sales volume in the company’s Paint Store Group segment along with double-digit percentage growth in earnings per share and EBITDA.
Sherwin-Williams easily topped earnings expectations with EPS at $3.29 and 21% above estimates of $2.71 a share. On the top line, sales came in 4% above estimates at $6.24 billion. Overall, Q2 earnings soared 36% from the prior year quarter with sales up 6% from a year ago.
Kimberly-Clark Q2 Review: Gross margin expansion was also a highlight of Kimberly-Clark’s Q2 report yesterday with its stock currently sporting a Zacks Rank #2 (Buy).
Gross margin was 33.7% up a respectable 3.5% from a year ago. Kimberly-Clark also highlighted another quarter of strong organic sales growth and raised its 2023 outlook for organic growth to 3%-5% and 10%-14% for adjusted earnings per share growth.
To that point, Kimberly-Clark delivered double-digit earnings growth during Q2 with EPS climbing 23% YoY to $1.65 per share which topped estimates by 11%. Sales slightly beat expectations at $5.13 billion and rose 1% from a year ago. Kimberly-Clark stated its growth strategy is working with the consumer products giant completing the sale of its Brazil tissue assets in June while launching a new marketing campaign for its renowned diaper brand Huggies.
PACCAR Q2 Review: With a Zacks Rank #2 (Buy) Paccar stock remains attractive after the company announced the achievement of record revenues and net income for the second quarter on Wednesday.
The success was driven by increased truck deliveries (51,900 units), strong gross margins, and strengthening results from its parts distribution segment. Paccar’s record net income came in at $1.22 billion which soared 70% from $720.4 million in Q2 2022.
This translated into EPS of $2.33 which beat earnings expectations by 8%. Second-quarter sales of $8.44 billion topped estimates by 2% and climbed 24% from the prior-year quarter. PACCAR also highlighted that it will increase its quarterly dividend by 8% from $0.25 per share to $0.27 per share, further bolstering the company’s strong business environment.
Bottom Line
Now is a good time to buy these top-rated Zacks stocks as their strong Q2 reports reconfirmed their strengthening outlooks. It’s quite plausible that earnings estimate revisions will continue to trend higher for Sherwin-Williams, Kimberly-Clark, and Paccar’s stock which should lead to more upside following their stellar quarterly results.
The Sherwin-Williams Company (SHW): Free Stock Analysis Report
Kimberly-Clark Corporation (KMB): Free Stock Analysis Report
PACCAR Inc. (PCAR): Free Stock Analysis Report
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