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6 Top Large-Cap Stocks Set to Soar on Earnings Next Week

Nalak Das
·5-min read

The fourth-quarter earnings season will be in full swing this week and earnings trends are showing improvement. Although corporate earnings growth was negative year over year in the first three quarters of last year, results were far better than initially anticipated. In line with improving earnings results, six large-cap stocks are poised to beat earnings estimates next week.

Fourth-Quarter Earnings Results Improving  

As of Jan 27, just 87 S&P 500 members reported fourth-quarter earnings results. Total earnings of these companies are down 0.1% from the same period last year on 3.4% higher revenues. Of the total, 70.1% surpassed EPS estimates while 72.4% outpaced revenue estimates.

As of Jan 27, fourth-quarter 2019 earnings for the S&P 500 Index were projected to be down 2.6% year over year on 3.7% higher revenues. This suggests an improvement from earnings decline of 3.2% from the same period last year on 3.5% higher revenues, projected at the beginning of the reporting cycle.  (Read More: Tech Earnings Expected to Turn Around)

6 Large-Cap Stocks to Consider Ahead of Earnings Releases

We have narrowed down our search to six large companies which will release their 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 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 six picks in the past three months.

McKesson Corp. MCK provides pharmaceuticals and medical supplies in the United States and internationally. It operates through three segments: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions, and Medical-Surgical Solutions. The company has an Earnings ESP of +0.63% for the third quarter (ended December) of fiscal 2020

McKesson has an expected earnings growth rate of 7.4% for the current year (ending March 2020). The Zacks Consensus Estimate for the current year has improved 1.3% over the last 30 days. The last four-quarter positive earnings surprise is 4.2%, on average. McKesson is set to release earnings results on Feb 4, before the opening bell.

Chipotle Mexican Grill Inc. CMG operates Chipotle Mexican Grill restaurants in the United States, Canada, the United Kingdom, France, and Germany. The company has an Earnings ESP of +3.49% for the fourth-quarter.

Chipotle Mexican Grill has an expected earnings growth rate of 29.1% for the current year. 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 16.1%, on average. Chipotle Mexican Grill is set to release earnings results on Feb 4, after the closing bell.

Microchip Technology Inc. MCHP develops, manufactures and sells semiconductor products for various embedded control applications in the Americas, Europe and Asia. The company has an Earnings ESP of +1.33% for the third quarter (ended December) of fiscal 2020

Microchip Technology has an expected earnings growth rate of 16.5% for the current year (ending March 2021). The Zacks Consensus Estimate for the current year has improved 4.2% over the last 30 days. The last four-quarter positive earnings surprise is 3.6%, on average. Microchip Technology is set to release earnings results on Feb 4, after the closing bell.

S&P Global Inc. SPGI provides ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. It operates through four segments: S&P Global Ratings (Ratings), S&P Global Market Intelligence (Market Intelligence), S&P Global Platts (Platts), and S&P Dow Jones Indices (Indices). The company has an Earnings ESP of +0.49% for the fourth-quarter.

S&P Global has an expected earnings growth rate of 11% for the current year. 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 3.6%, on average. S&P Global is set to release earnings results on Feb 6, before the opening bell.

Kellogg Co. K manufactures and markets ready-to-eat cereal and convenience foods. It operates through the U.S. Snacks, U.S. Morning Foods, U.S. Specialty Channels, North America Other, Europe, Latin America and Asia Pacific segments. The company has an Earnings ESP of +1.33% for the fourth-quarter.

Kellogg has an expected earnings growth rate of 3.6% for the current year. The last four-quarter positive earnings surprise is 7.9%, on average. Kellogg is set to release earnings results on Feb 6, before the opening bell.

CDW Corp. CDW provides integrated information technology solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada. It operates through three segments: Corporate, Small Business and Public. The company has an Earnings ESP of +2.34% for the fourth-quarter.

CDW has an expected earnings growth rate of 9% for the current year. The last four-quarter positive earnings surprise is 9.1%, on average. CDW is set to release earnings results on Feb 6, before the opening bell.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


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
 
S&P Global Inc. (SPGI) : Free Stock Analysis Report
 
CDW Corporation (CDW) : Free Stock Analysis Report
 
Kellogg Company (K) : Free Stock Analysis Report
 
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
 
Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report
 
McKesson Corporation (MCK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research