For Immediate Release
Chicago, IL – August 16, 2022 – 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: Keysight Technologies Inc. KEYS, Dollar General Corp. DG, On Holding AG ONON, Intuit Inc. INTU and Ulta Beauty Inc. ULTA.
Here are highlights from Monday’s Analyst Blog:
5 Stocks to Buy Ahead of Earnings Results This Month
We are in the last leg of the second-quarter 2022 reporting cycle. Market participants have keenly watched this earnings season as it provides the most descriptive view of U.S. corporate health amid record-high inflation and an extremely hawkish Fed. So far, earnings results have come in better than expected, with no visible sign of an imminent recession.
Here we have selected five companies slated to report earnings results in the second half of August. The combination of a favorable Zacks Rank and a possible earnings beat should drive their share prices. These companies are — Keysight Technologies Inc., Dollar General Corp., On Holding AG, Intuit Inc. and Ulta Beauty Inc.
Q2 Earnings Results So Far
As of Aug 10, 452 companies within the S&P 500 Index have reported their financial numbers. Total earnings of these companies are up 8.1% year over year on 15.3% higher revenues, with 77.4% beating EPS estimates and 68.4% beating revenue estimates.
Our latest projection is that for the second quarter as a whole, total earnings of the S&P 500 Index will rise 6.8% year over year on 14% higher revenues and net margin compression of 0.82%. These show a notable improvement over 2.1% growth in earnings year over year on 9.7% higher revenues and net margin compression of 0.95% estimated at the beginning of the reporting cycle.
Our Top Picks
Five companies are slated to beat earnings estimates this month. 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 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.
Keysight is witnessing growth in both Communications Solutions Group and Electronic Industrial Solutions Group. KEYS is likely to gain from solid demand for semiconductor measurement solutions, as semiconductor companies are increasingly developing chips based on process technology.
Accelerated 5G deployments, 6G-related research applications and investments in 400G/ 800G Ethernet for data centers bode well for Keysight. Moreover, the rising demand for power management applications is the key catalyst for growth.
KEYS has an Earnings ESP of +1.23%. It has an expected earnings growth rate of 15.1% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings improved 0.1% over the last 30 days.
Keysight recorded earnings surprises in the last four reported quarters, with an average beat of 8%. The company is set to release earnings results on Aug 17, after the closing bell.
Dollar General remains a compelling growth story in the retail space. Thanks to its value-creating initiatives, defensive product mix and real estate growth strategy, DG has the capabilities to gain market share. Its commitment to better pricing, private label offerings, effective inventory management and merchandise initiative should drive sales.
We also remain encouraged by Dollar General's host of initiatives such as DG Fresh, Fast Track, non-consumables, digitization and private fleet that should yield same-store sales growth and margin expansion. Markedly, we expect same-store sales to increase 3.5% and 3% in fiscal 2022 and 2023, respectively.
DG has an Earnings ESP of +0.99%. It has an expected earnings growth rate of 13.3% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.4% over the last 30 days.
Dollar General recorded earnings surprises in the last four reported quarters, with an average beat of 2.8%. The company is set to release earnings results on Aug 25, before the opening bell.
Intuit is benefiting from strong momentum in online ecosystem revenues and solid professional tax revenues. The TurboTax Live offering is also driving growth in the Consumer tax business.
Solid momentum in INTU's lending product, QuickBooks Capital, remains a positive. Moreover, Intuit's strategy of shifting its business to cloud-based subscription model will help generate stable revenues over the long run.
INTU has an Earnings ESP of +1.92%. It has an expected earnings growth rate of 16.3% for the current year (ending July 2023). The Zacks Consensus Estimate for current-year earnings improved 0.8% over the last 90 days.
Intuit recorded earnings surprises in the last four reported quarters, with an average beat of 16.8%. The company is set to release earnings results on Aug 23, after the closing bell.
Ulta Beauty has been benefiting from its omnichannel strength, thanks to efficient store and digital operations. ULTA's skincare category has been gaining on consumers' rising interest in self-care. Further, management has raised its fiscal 2022 guidance.
Ulta Beauty has been seeing market share gains in major beauty categories for a while now, with skincare standing out. Its foremost priority is to strengthen its omnichannel business and explore the potential of both physical and digital facets.
ULTA has an Earnings ESP of +3.27%. The Zacks Consensus Estimate for current-year earnings improved 8% over the last 90 days. Ulta Beauty recorded earnings surprises in the last four reported quarters, with an average beat of 49.8%. The company is set to release earnings results on Aug 25, after the closing bell.
On Holding develops and distributes sports products worldwide. ONON offers athletic footwear, apparel, and accessories. ON Holding offers its products through independent retailers and distributors, online, and stores.
ONON has an Earnings ESP of +433.33%. It has an expected earnings growth rate of 58.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 58.3% over the last 7 days.
ON Holding recorded earnings surprises in two out of the last four reported quarters, with an average beat of 106.7%. The company is set to release earnings results on Aug 16, before the opening bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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