The upcoming week stands to be a pivotal moment for investors as a significant influx of companies are set to announce their earnings. This week is poised to be the busiest of the earnings season, with around a third of the S&P 500 companies, along with ten from the prestigious Dow Jones Industrial Average, preparing to reveal their latest financial results. Major players like Microsoft, Amazon, and Apple will draw considerable attention, but it’s essential to look beyond these megacaps and recognize potential surprises from firms in diverse sectors such as travel, pharmaceuticals, energy, and restaurants.
Currently, approximately 36% of S&P 500 companies have reported their earnings, with an encouraging trend showing that over 70% of these firms managed to exceed analyst expectations. This statistic suggests a prevailing uptrend in corporate performance, which could fuel market enthusiasm. CNBC Pro has sifted through the data to identify companies expected to deliver positive earnings surprises next week. To qualify for this selection, stocks had to be rated as a ‘buy’ by at least 55% of analysts, show at least a 10% increase in earnings per share (EPS) estimates over the past three and six months, and demonstrate projected growth of at least 15% over the next 12 months.
One standout company scheduled to report next week is MetLife, a global insurance provider. Analysts seem optimistic about its financial outlook, with 65% rating it as a ‘buy’. The average price target for MetLife implies a notable upside of around 30%, showcasing strong market confidence. Recently, TD Cowen initiated coverage with a ‘buy’ rating, emphasizing that the firm’s earnings drawn predominantly from group benefits and international exposure mitigates macroeconomic risks. Their forecast of over 10% EPS growth suggests stability for MetLife, which has already seen its shares climb 25% this year.
Amazon, another headline grabber, has been in positive momentum, with its stock price rising nearly 25% in 2024. With over 80% of covering analysts recommending it as a ‘buy’, the average target price presents an upside potential of around 31%. Ahead of its earnings report, analysts from Bank of America have reaffirmed their optimistic outlook, while Citi has contextualized the holiday shopping landscape by comparing it with previous years. Despite a shorter shopping season this year, they assert that consumer and advertiser spending should remain robust, indicating a firm belief in Amazon’s resilience and adaptability in a competitive market.
Amidst the other significant players, Aptiv stands out with potential for a substantial rebound. Despite its shares plummeting nearly 23% thus far in 2024, Wells Fargo’s recent price target revision indicates a potential comeback, forecasting a 27% increase in stock value following their earnings release on Thursday. Aptiv has been upgraded to an ‘overweight’ from ‘equal weight’, an affirmation of its potential for above-average growth prospects despite recent difficulties. The consensus from analysts, with 61% maintaining a ‘buy’ rating, reaffirms the stock’s optimistic outlook.
The upcoming earnings reports will also feature significant names such as Alphabet and leading financial service providers Mastercard and Visa. The anticipation surrounding their performance further accentuates the high stakes of this earnings season. As these companies navigate various market dynamics, their reports could drive substantial investor sentiment and impact sector performance.
As the market braces for a consequential week of earnings reports, both analysts and investors will be keenly observing the outcomes. The interplay between expected financial performance and market reactions could shape the landscape for the remaining fiscal year. Companies like MetLife, Amazon, and Aptiv, along with other major players, will not only influence their respective industries but could also signal broader economic trends. As earnings season unfolds, the responses to these reports will ultimately reflect the investors’ expectations, underpinning the crucial balance between risk and opportunity in the stock market.