Advertisement
Singapore markets close in 3 hours 28 minutes

  • Straits Times Index

    3,281.98
    -11.15 (-0.34%)
     

  • Nikkei

    37,637.86
    -822.22 (-2.14%)
     

  • Hang Seng

    17,260.83
    +59.56 (+0.35%)
     

  • FTSE 100

    8,040.38
    -4.43 (-0.06%)
     

  • Bitcoin USD

    64,096.91
    -2,673.74 (-4.00%)
     

  • CMC Crypto 200

    1,387.85
    -36.25 (-2.55%)
     

  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     

  • Dow

    38,460.92
    -42.77 (-0.11%)
     

  • Nasdaq

    15,712.75
    +16.11 (+0.10%)
     

  • Gold

    2,329.00
    -9.40 (-0.40%)
     

  • Crude Oil

    82.93
    +0.12 (+0.14%)
     

  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     

  • FTSE Bursa Malaysia

    1,570.29
    -1.19 (-0.08%)
     

  • Jakarta Composite Index

    7,157.23
    -17.30 (-0.24%)
     

  • PSE Index

    6,577.18
    +4.43 (+0.07%)
     

Buy 5 Top Stocks Set to Beat Earnings Estimates Tomorrow

Nalak Das
·5-min read

The coronavirus-stricken first-quarter 2020 reporting cycle, the significant toll that economic disaster has taken on corporate earnings is palpable. Despite the negative earnings trend, a handful of stocks with a favorable Zacks Rank are poised to beat earnings estimates tomorrow. We have selected the top five.

Brief Insight Into First Quarter

U.S. GDP for first-quarter 2020 contracted 4.8% compared with an expansion of 2.1% in the previous quarter. This marks the first negative GDP quarter since first-quarter 2014 and reflects the highest decline in GDP in any quarter since fourth-quarter 2008.

Notably, consumer spending, the largest component (67%) of the GDP plunged 7.6%. Durable goods spending plummeted 16.1% while expenditures on services declined 10.2%. Goods consumption dropped 1.3% while services shed 10.2%.

Several disappointing numbers including jobs data, industrial production, retail sales, manufacturing activities, home building and consumer confidence, revealed how badly the U.S. economy was hurt in the first quarter due to lockdowns, both domestic and international.

Disappointing First-Quarter Earnings So Far

As of May 1, 277 S&P 500 members reported first-quarter  earnings results. Total earnings of these companies are down 12.6% from the same period last year on 2.1% higher revenues. Of the total, 68.6% surpassed EPS estimates and 63.9% outpaced revenue estimates. Overall, first-quarter  earnings for the S&P 500 Index were projected to be down 12.5% year over year on 2.1% higher revenues. This is in sharp contrast to 4% earnings growth expected in early January. (Read More: Tech Sector Shows its Earnings Power)

Our Top Picks

We have narrowed down our search to five stocks that will release earnings results tomorrow. 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 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are expected to soar after 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.

 

Shopify Inc. SHOP provides a cloud-based multi-channel commerce platform for small and medium-sized businesses in Canada, the United States, the United Kingdom, Australia and internationally. The Zacks Rank #2 company has an Earnings ESP of +23.41% for first-quarter 2020. It has a trailing four-quarter positive earnings surprise of 188%, on average. The company is set to release earnings results on May 6, before the opening bell.

The Scotts Miracle-Gro Co. SMG manufactures, markets, and sells consumer lawn and garden products in the United States and internationally. It operates through three segments: U.S. Consumer, Hawthorne and Other. The Zacks Rank #1 company has an Earnings ESP of +1.49% for the second quarter of fiscal 2020.

The Scotts Miracle-Gro has an expected earnings growth rate of 4.3% for the current year (ending September 2020). The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 60 days. It has a trailing four-quarter positive earnings surprise of 6.6%, on average. The company is set to release earnings results on May 6, before the opening bell.

Etsy Inc. ETSY operates online market places for buyers and sellers primarily in the United States, the United Kingdom, Canada, Australia, France and Germany. Its online market places include Etsy.com and Reverb.com. The Zacks Rank #2 company has an Earnings ESP of +18.31% for first-quarter 2020.

The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the last 7 days. It has a trailing four-quarter positive earnings surprise of 29.6%, on average. The company is set to release earnings results on May 6, after the closing bell.

Exact Sciences Corp. EXAS is a molecular diagnostics company focused on the early detection and prevention of some of the deadliest forms of cancer. The Zacks Rank #2 company has an Earnings ESP of +2.28% for first-quarter 2020. It has a trailing four-quarter positive earnings surprise of 6.6%, on average. The company is set to release earnings results on May 6, after the closing bell.

Franco-Nevada Corp. FNV operates as a gold-focused royalty and stream company with additional interests in silver, platinum group metals, oil and gas and other resource assets. The Zacks Rank #2 company has an Earnings ESP of +1.53% for first-quarter 2020.

Franco-Nevada has an expected earnings growth rate of 22% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the last 30 days. It has a trailing four-quarter positive earnings surprise of 18.8%, on average. The company is set to release earnings results on May 6, after the closing bell.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


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
 
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
 
The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report
 
Exact Sciences Corporation (EXAS) : Free Stock Analysis Report
 
Etsy, Inc. (ETSY) : Free Stock Analysis Report
 
Shopify Inc. (SHOP) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.