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5 Blue-Chip Stocks Set to Beat on Earnings Results This Month

We are in the initial stage of the first-quarter 2024 earnings season, and the results are so far in line with expectations. As of Apr 17, 48 companies on the S&P 500 Index have reported their financial numbers. Total earnings for these 48 index members are up 9.5% from the same period last year on 4.5% higher revenues, with 77.1% beating EPS estimates and 64.6% beating revenue estimates.

At present, total earnings of the S&P 500 Index in first-quarter 2024 are expected to be up 2.9% on 3.8% higher revenues. This follows the 6.8% earnings growth on 4% higher revenues in fourth-quarter 2023 and 3.8% earnings growth on 2.2% higher revenues in third-quarter 2023.

The Dow in Q1 at a Glance

U.S. stock markets witnessed an astonishing rally in the past 15 months. The Dow — popularly known as Wall Street’s blue-chip index — rallied 5.6% in first-quarter 2024 after climbing 13.7% in 2023. Notably, last quarter was its strongest first-quarter performance since 2021.

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Although, the major driver of this rally was globally booming artificial intelligence (AI), especially generative AI, stock prices of some of these companies have skyrocketed 200-300% during this period.

Consequently, market participants shifted toward cyclical sectors like industrials, financials, energy, materials and transportation, to name a few. This sector churn helped the Dow to register an impressive first-quarter performance.

Meanwhile, a few blue-chip stocks are set to beat on earnings this week. A handful of them currently carry a favorable Zacks Rank. The combination of a favorable Zacks Rank and an earnings beat should drive their stock prices in the near term.

Our Top Picks

We have narrowed our search to five Dow stocks that are poised to beat on earnings results this month. Each of these stocks carries a Zacks Rank #3 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 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.

The chart below shows the price performance of our five picks in the last quarter.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Caterpillar Inc.’s CAT Construction Industries segment is expected to benefit from the rising construction activities in the United States and other parts of the world. Backed by demand for commodities fueled by the energy-transition trend, a thriving mining sector will aid the Resource Industries segment.

CAT’s Energy & Transportation segment remains well-poised for growth, backed by strong demand across all applications. A strong liquidity position, investments in expanding services and digital initiatives will help CAT deliver outsized returns.

Caterpillar has an Earnings ESP of +1.76%. It has an expected earnings growth rate of 0.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days.

Caterpillar recorded earnings surprises in the last four reported quarters, with an average beat of 19.7%. The company is set to release earnings results on Apr 25, before the opening bell.

American Express Co. AXP has benefited from growth initiatives, like launching new products, reaching new agreements and forging alliances. Consumer spending on T&E, which carries higher margins for AXP, is advancing well. AXP’s balance sheet looks strong with ample cash. Solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital via buybacks and dividends.

American Express has an Earnings ESP of +0.45%. It has an expected earnings growth rate of 14.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days.

AXP recorded earnings surprises in two out of the last four reported quarters, with an average beat of 1.1%. The company is set to release earnings results on Apr 19, before the opening bell.

Honeywell International Inc. HON has been benefiting from strength in the commercial aviation, aerospace and process solutions businesses. Strong commercial aftermarket and commercial aviation demand led by strength in the air transport aftermarket is aiding the Aerospace segment. HON’s bullish forecast for 2024 holds promise. The acquisition of Compressor Controls enhances HON’s expertise in industrial control, automation and process solutions.

Honeywell International has an Earnings ESP of +0.87%. It has an expected earnings growth rate of 8.5% for the current year. HON recorded earnings surprises in three out of the last four reported quarters, with an average beat of 2.7%. The company is set to release earnings results on Apr 25, before the opening bell.

Visa Inc.’s V strategic acquisitions and alliances are fostering long-term growth and consistently driving its revenues. V expects net revenues to increase in low double digits for fiscal 2024.

Visa, fueled by increased payments, cross-border volumes and sustained investments in technology, is witnessing significant profit growth. The ongoing shift to digital payments is advantageous for V, with solid domestic volumes supporting its overall performance.

Visa has an Earnings ESP of +0.59%. It has an expected earnings growth rate of 12.7% for the current year (ending September 2024). V recorded earnings surprises the last four reported quarters, with an average beat of 4.1%. The company is set to release earnings results on Apr 23, after the closing bell.

Dow Inc. DOW is likely to gain from cost synergy savings and productivity initiatives. Dow is focused on maintaining cost and operational discipline through several restructuring and cost-removal initiatives.

Actions to reduce operating costs are expected to lend support to DOW’s earnings. Investment in high-return projects should be accretive to earnings. DOW has adequate liquidity to meet its debt obligations.

DOW has an Earnings ESP of +2.28%. It has an expected earnings growth rate of 39.3% for the current year. DOW recorded earnings surprises in the last four reported quarters, with an average beat of 20.8%. The company is set to release earnings results on Apr 25, before the opening bell.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Visa Inc. (V) : Free Stock Analysis Report

Caterpillar Inc. (CAT) : Free Stock Analysis Report

Honeywell International Inc. (HON) : Free Stock Analysis Report

American Express Company (AXP) : Free Stock Analysis Report

Dow Inc. (DOW) : Free Stock Analysis Report

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Zacks Investment Research