We are in the last week of the fourth-quarter 2023 earnings season. Results are, so far, much better than expected. As of Feb 20, 402 companies on the S&P 500 Index have reported their financial numbers. Total earnings for these index members are up 4.9% from the same period last year on 3.4% higher revenues, with 78.6% beating EPS estimates and 64.4% beating revenue estimates.
At present, total earnings of the S&P 500 Index in fourth-quarter 2023 are expected to be up 5.5% on 3.2% higher revenues. This would follow 3.8% earnings growth on 2% higher revenues in the third quarter and three back-to-back quarters of declining earnings before that.
Meanwhile, five stocks are set to beat on earnings this week. The combination of a favorable Zacks Rank and a possible earnings beat should drive their stock prices in the near term.
Our Top Picks
We have narrowed our search to five stocks that are poised to beat on earnings this 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 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 f our five picks in the past quarter.
Image Source: Zacks Investment Research
HEICO Corp. HEI has witnessed improved demand for its commercial aerospace products and services in the last couple of quarters, buoyed by a recovery in commercial air travel. The expectation of continued recovery in domestic and international travel demand bodes well for HEI’s growth in the coming days.
HEI’s disciplined acquisition strategy has also been driving its overall performance. Wencor’s takeover has boosted HEI’s position in the aircraft aftermarket space. The stock has a strong solvency position in the short run.
HEICO has an Earnings ESP of +1.77%. It has an expected earnings growth rate of 11.4% for the current year (ending October 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 90 days.
HEICO recorded earnings surprises in the last four reported quarters, with an average beat of 7.8%. The company is set to release earnings results on Feb 26, after the closing bell.
Constellation Energy Corp. CEG generates and markets electricity. CEG’s operating segment consists of the Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions. CEG sells natural gas, renewable energy and other energy-related products and services.
Constellation Energy has an Earnings ESP of +1.47%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
Constellation Energy recorded earnings surprises in two out of the last four reported quarters, with an average beat of 37%. The company is set to release earnings results on Feb 27, before the opening bell.
Inter Parfums Inc. IPAR has been gaining on favorable trends in the fragrance market. Continued traction of its legacy scents, courtesy of innovative extensions, bodes well. Also, strength in the newer brands has been a catalyst. These positives collectively boosted sales, on the back of growth in European and U.S-based operations.
IPAR is set to witness another record year in 2024. Inter Parfums continues to make significant investments in advertising and promotion. IPAR plans to allocate 21% of its annual net sales to advertising and promotion, reiterating its aggressive approach to drive sell-through.
Inter Parfums has an Earnings ESP of +7.14%. It has an expected earnings growth rate of 8.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the last 60 days.
Inter Parfums recorded earnings surprises in the last four reported quarters, with an average beat of 45.7%. The company is set to release earnings results on Feb 27, after the closing bell.
Apellis Pharmaceuticals Inc. APLS is witnessing robust sales uptake owing to continued strong demand. In March 2023, APLS launched Syfovre to treat geographic atrophy secondary to age-related macular degeneration in the United States. APLS’ first marketed drug, Empaveli, approved for paroxysmal nocturnal hemoglobinuria, has also witnessed a steady uptake so far.
Apellis Pharmaceuticals has an Earnings ESP of +28.35%. It has an expected earnings growth rate of 75.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 20.3% over the last 30 days. Apellis Pharmaceuticals is set to release earnings results on Feb 27, before the opening bell.
Vaxcyte Inc. PCVX is a clinical-stage biotechnology vaccine company, which develops novel protein vaccines to prevent or treat bacterial infectious diseases. PCVX’s lead vaccine candidate is VAX-24, a 24-valent investigational pneumococcal conjugate vaccine for the prevention of invasive pneumococcal disease.
PCVX also develops VAX-31 to protect against these emerging strains and to help address antibiotic resistance, VAX-A1, a novel conjugate vaccine candidate to prevent disease caused by Group A Streptococcus, VAX-PG, a novel protein vaccine candidate targeting keystone pathogen responsible for periodontitis; and VAX-GI to prevent Shigella, a bacterial illness.
Vaxcyte has an Earnings ESP of +12.29%. The Zacks Consensus Estimate for current-year earnings has improved 4.6% over the last 30 days. Vaxcyte recorded earnings surprises in two out of the last four reported quarters, with an average beat of 1.5%. The company is set to release earnings results on Feb 27, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.0% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>Constellation Energy Corporation (CEG) : Free Stock Analysis Report
Inter Parfums, Inc. (IPAR) : Free Stock Analysis Report
Heico Corporation (HEI) : Free Stock Analysis Report
Apellis Pharmaceuticals, Inc. (APLS) : Free Stock Analysis Report
Vaxcyte, Inc. (PCVX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
