5 Top Stocks Set to Beat Earnings Estimates Next Week

Wall Street had a dream run in 2019 wherein all three major stock indexes witnessed the best yearly performance in six years. Although, expectations for fourth-quarter 2019 earnings are negative at present, results so far are far better than initially anticipated. Below we present five stocks that are poised to beat earnings estimates next week.

Fourth-Quarter at a Glance

The final three months of last year were quite promising as the U.S.-China trade war finally seemed to ease and strong economic data boosted investors’ sentiments.

The U.S. economy is on a stable footing. Strong consumer spending, which constitutes 70% of GDP, a strong labor market, a historically low-level of unemployment, steady growth in wage rate and a housing-market revival bolstered investors’ sentiments and are likely to reflect on earnings results.

Moreover, after remaining quiet in the first half of 2019, the central bank reduced the benchmark interest rate by 75 basis points in three equal tranches in the third quarter of last year. Fed’s timey intervention helped the economy, especially the sagging U.S. housing market to recover with a low mortgage rate.

Fourth-Quarter Earnings Results Improving  

As of Jan 29, 141 S&P 500 members reported fourth-quarter earnings results. Total earnings of these companies are down 0.6% from the same period last year on 2.7% higher revenues. Of the total, 70.2% surpassed EPS estimates while 68.8% outpaced revenue estimates.

As of Jan 29, fourth-quarter 2019 earnings for the S&P 500 Index were projected to be down 2.3% year over year on 3.9% higher revenues. This suggests good improvement from earnings decline of 3.2% in fourth-quarter 2018 on 3.5% higher revenues, projected at the beginning of the reporting cycle.

5 Stocks Set to Surpass Earnings Estimates

We have narrowed down our search to five companies that are gearing up to release their earnings results next week. Each of these stocks carries a Zacks Rank #2 (Buy) 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 (Hold) 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 past three months.

Waters Corp. WAT is a specialty measurement company, provides analytical workflow solutions in Asia, the Americas, and Europe. The company has an Earnings ESP of +0.50% for the fourth quarter.

Waters Corp has an expected earnings growth rate of 12% for the current year. The last four-quarter positive earnings surprise is 0.6%, on average. Waters Corp is set to release earnings results on Feb 4, before the opening bell.

Neurocrine Biosciences Inc. NBIX discovers and develops pharmaceuticals for the treatment of neurological and endocrine-related diseases and disorders in the United States. The company has an Earnings ESP of +5.89% for the fourth quarter.

Neurocrine Biosciences has an expected earnings growth rate of 372.7% for the current year. The Zacks Consensus Estimate for the current year has improved 9.3% over the last 30 days. The last four-quarter positive earnings surprise is 25.7%, on average. Neurocrine Biosciences is set to release earnings results on Feb 4, after the closing bell.

Spirit Airlines Inc. SAVE is an ultra-low-cost carrier operates in the United States, the Caribbean and Latin America. The company has an Earnings ESP of +3.24% for the fourth quarter.

The Zacks Consensus Estimate for the current year has improved 9.3% over the last 30 days. The last four-quarter positive earnings surprise is 1%, on average. Spirit Airlines is set to release earnings results on Feb 5, after the closing bell.

NuStar Energy L.P. NS is engaged in the terminalling, storage and marketing of petroleum products. It operates through three segments: Pipeline, Storage and Fuels Marketing. The company has an Earnings ESP of +1.32% for the fourth quarter.

NuStar Energy has an expected earnings growth rate of 238.7% for the current year. The Zacks Consensus Estimate for the current year has improved 4.8% over the last 30 days. NuStar Energy is set to release earnings results on Feb 5, before the opening bell.

The RMR Group Inc. RMR provides business and property management services in the United States. It provides management services to its four publicly traded real estate investment trusts and three real estate operating companies. The company has an Earnings ESP of +3.33% for the first quarter of fiscal 2020 (ended December).

The Zacks Consensus Estimate for the current year has improved 0.9% over the last 30 days. The last four-quarter positive earnings surprise is 0.5%, on average. The RMR Group is set to release earnings results on Feb 6, before the opening bell.

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Spirit Airlines, Inc. (SAVE) : Free Stock Analysis Report
 
NuStar Energy L.P. (NS) : Free Stock Analysis Report
 
Waters Corporation (WAT) : Free Stock Analysis Report
 
Neurocrine Biosciences, Inc. (NBIX) : Free Stock Analysis Report
 
The RMR Group Inc. (RMR) : Free Stock Analysis Report
 
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