For Immediate Release
Chicago, IL – April 24, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: General Electric Co. GE, Kimberly-Clark Corp. KMB, Corning Inc. GLW, Raytheon Technologies Corp. RTX and Align Technology Inc. ALGN.
Here are highlights from Friday’s Analyst Blog:
U.S. Corporate Majors Set to Beat on Q1 Earnings This Week
The first-quarter 2023 earnings season is slowly gathering pace. Next week will be the first big week of this reporting cycle as more than 1,000 companies are slated to announce their financial numbers. Five U.S. corporate giants with a favorable Zacks Rank are poised to beat on earnings next week.
Early-Stage Q1 Results
Market participants will try to analyze this reporting cycle against the backdrop of a possible recession later this year. Therefore, this season, management guidance and the near-term business outlook will get more importance than actual results. In addition to earnings and revenues, margins will get more attention from financial researchers.
As of Apr 19, 53 companies on the S&P 500 Index have reported their quarterly financial numbers. Total earnings of these companies are up 2.9% year over year on 9.3% higher revenues. Moreover, 83% of companies have surpassed earnings estimates while 71.7% have beaten revenue estimates.
Better-Than-Expected Start to Q1 Earnings
As of Apr 19, our projection has shown that total earnings of the S&P 500 Index are set to decline 8.8% year over year on 2.1% higher revenues compared with a 10% year-over-year decline in earnings on 1.7% higher revenues, estimated at the beginning of the reporting cycle. This will follow a 5.4% year-over-year decline in earnings of the S&P 500 Index on 5.9% higher revenues in fourth-quarter 2022.
This earnings season is likely to witness the fifth consecutive quarter of a year-over-year decline in net margins of the S&P 500 Index. The aggregate net margin is likely to decline 1.47% in the first quarter. If this happens, it will mark the biggest quarterly decline since the 1.38% year-over-year net margin decline in fourth-quarter 2022.
Our Top Picks
We have narrowed our search to five U.S. corporate bigwigs that are set to report first-quarter 2023 earnings results next week. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.
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 releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
General Electric Co. operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. The strong performance of the Aerospace segment, driven by continued recovery in the commercial market and robust consumer demand is aiding GE’s growth.
A rebound in the Power segment after months of softness is encouraging. Investments in innovation and productivity improvement should fuel GE’s growth. Also, its shareholder-friendly policies are praiseworthy.
Zacks Rank #1 General Electric has an Earnings ESP of +10.11%. The Zacks Consensus Estimate for current-year earnings improved 1% over the last 30 days. GE recorded earnings surprises in three out of the last four reported quarters, with an average beat of 27.9%. General Electric is set to release earnings results on Apr 25, before the opening bell.
Kimberly-Clark Corp. has been benefiting from its three growth pillars. These include focus on improving KMB’s core business in the developed markets, speeding up growth of the Personal Care segment in developing and emerging markets and enhancing digital and e-commerce capacities. Apart from this, KMB’s pricing and saving initiatives have been aiding amid cost inflation.
Zacks Rank #2 Kimberly-Clark has an Earnings ESP of +3.25%. It has an expected earnings growth rate of 5.5% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last seven days.
Kimberly-Clark recorded earnings surprises in two out of the last four reported quarters, with an average beat of 1.4%. KMB is set to release earnings results on Apr 25, before the opening bell.
Corning Inc. is engaged in display technologies, optical communications, environmental technologies, specialty materials, and life sciences businesses worldwide. The increasing use of mobile devices and the proliferation of clouds should drive GLW’s fiber optic solutions business, while its Iris glass presents significant growth opportunity.
GLW remains focused on operational excellence, cash flow generation and capital allocation. GLW also boasts a leadership position in each of the markets addressed by its Market-Access Platforms.
Zacks Rank #2 Corning has an Earnings ESP of +3.70%. The Zacks Consensus Estimate for current-year earnings improved 2.6% over the last seven days. GLW recorded earnings surprises in the last four reported quarters, with an average beat of 4.7%. GLW is set to release earnings results on Apr 25, before the opening bell.
Raytheon Technologies Corp. continues to receive ample orders for its combat-proven defense products and expects both domestic and international program growth to remain robust for its defense business. This should boost the revenue generation prospects for RTX’s defense business. A steady recovery in commercial air traffic continues to boost commercial OEM as well as commercial aftermarket sales for RTX.
Zacks Rank #2 Raytheon Technologies has an Earnings ESP of +3.60%. It has an expected earnings growth rate of 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.6% over the last 30 days.
Raytheon Technologies recorded earnings surprises in the last four reported quarters, with an average beat of 7.2%. RTX is set to release earnings results on Apr 25, before the opening bell.
Align Technology Inc. expects to see continued stability in an improving operating environment. ALGN is confident about a large untapped market opportunity for digital orthodontics and restorative dentistry. ALGN expects 2023 to be a stronger year for new innovation.
Zacks Rank #2 Align Technology has an Earnings ESP of +2.38%. It has an expected earnings growth rate of 2.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last seven days. Align Technology is set to release earnings results on Apr 26, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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