We are in the last leg of the second-quarter 2023 earnings season. So far, earnings results are not great but they are not bad either. Moreover, the outlook given by companies that have already reported is far better than expected.
As of Aug 9, 452 S&P 500 companies reported earnings results. Total earnings of these companies are down 9.6% year-over-year on 0.4% higher revenues. Of these, 78.8% surpassed EPS estimates while 65% outpaced revenue estimates.
At present, our estimate has shown that the total earnings of the S&P 500 Index will likely decline 8.2% year-over-year on 0.8% lower revenues. The second-quarter earnings decline would follow the 3.4% decline in the first quarter and a 5.4% drop in fourth-quarter 2022.
Our Top Picks
We have narrowed our search to five stocks that are set to declare earnings results next week. The combination of a possible earnings beat and a favorable Zacks Rank should drive their stocks in the near future. Each of our picks carries a Zacks Rank #2 (Buy) and has a positive Earnings ESP.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Legend Biotech Corp. LEGN is a clinical-stage biopharmaceutical company. LEGN engaged in the discovery and development of novel cell therapies for oncology and other indications. LEGN’s lead product consists of LCAR-B38M/JNJ-4528, which is in the clinical stage.
Legend Biotech has an Earnings ESP of +8.26%. The Zacks Consensus Estimate for current-year earnings has improved 3.8% over the last 30 days. LEGN is set to release earnings results on Aug 15, before the opening bell.
On Holding AG ONON develops and distributes sports products worldwide. ONON offers athletic footwear, apparel, and accessories. ONON sells its products through independent retailers and distributors, online and in stores.
On Holding has an Earnings ESP of +11.60%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the last 30 days.
ONON recorded earnings surprises in two out of the last four reported quarters, with an average beat of 339%. The company is set to release earnings results on Aug 15, before the opening bell.
The TJX Companies Inc. TJX is benefiting from its solid store and e-commerce growth efforts. TJX’s Marmaxx segment is doing particularly well, wherein comp store sales increased in the first quarter of fiscal 2024, backed by improved customer traffic. TJX’s off-price business model, strategic store locations, impressive brands and fashion products and supply-chain management have been working well.
The TJX Companies has an Earnings ESP of +2.63%. It has an expected earnings growth rate of 14.8% for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days.
TJX recorded earnings surprises in three out of the last four reported quarters, with an average beat of 4.4%. The company is set to release earnings results on Aug 16, before the opening bell.
Walmart Inc. WMT has been benefiting from its robust omnichannel operations due to its efforts to enhance store and online experience. WMT has been particularly gaining from its efforts to boost delivery services. Increased market share in grocery continued to boost U.S. comp sales. Strong comp sales growth globally, expense leverage and e-commerce growth across all units are upsides.
Walmart has an Earnings ESP of +1.97%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days. WMT recorded earnings surprises in the last four reported quarters, with an average beat of 12%. The company is set to release earnings results on Aug 17, before the opening bell.
BILL Holdings Inc. BILL is benefiting from an expanding small and medium business clientele, as well as a diversified business model. BILL’s large-scale two-sided network simplifies operations and offers automation and multiple payment choices for both sides of a transaction within a secure and frictionless experience. Bill.com is leveraging AI that makes its solutions easier to use, more automated and predicted. BILL is also working on integrating generative AI in its solutions to enhance customer experience.
BILL Holdings has an Earnings ESP of +3.94%. It has an expected earnings growth rate of 16.9% for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the last 60 days.
BILL recorded earnings surprises in the last four reported quarters, with an average beat of 135.4%. The company is set to release earnings results on Aug 17, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
The TJX Companies, Inc. (TJX): Free Stock Analysis Report
Walmart Inc. (WMT): Free Stock Analysis Report
BILL Holdings, Inc. (BILL): Free Stock Analysis Report
Legend Biotech Corporation Sponsored ADR (LEGN): Free Stock Analysis Report
On Holding AG (ONON): Free Stock Analysis Report
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