These stocks reporting next week almost always beat the Street and rally
A handful of stocks reporting results in the next few days could have the upper hand against their competitors. The coming week will be another busy one for third-quarter earnings, with nearly one fifth of the S & P 500 — or 96 companies — on deck to post their latest results. A variety of semiconductor makers, travel companies and restaurant names will headline the results over the next few days. So far, the earnings season has been a success. Of the 325 companies in the S & P 500 that have reported, more than 74% have posted an earnings surprise to the upside, while 61% have also beaten analysts’ revenue expectations. The S & P’s blended year-over-year earnings growth rate is currently at 3.6%, on pace for the fifth straight quarter of year-over-year profit growth. To try and find possible outperformers, CNBC Pro screened data from Bespoke Investment Group to fdiscover the stocks reporting next week that have a history of beating analysts’ expectations and of outperforming afterward. To be included in the following table, stocks had to meet the following criteria: Reporting earnings next week Have an earnings per share beat rate of 80% or more Average earnings day gain of at least 1.5% Online real estate marketplace Zillow , up 2% this year, has a track record of outperforming on strong results. Zillow has an earnings beat rate of 83% and on average has risen 1.6% afterwards. Foruteen of the analysts covering Zillow rate it either a strong buy or buy, while 11 view it as a hold. The average price target represents potential 7% upside. Last month, Wedbush upgraded Zillow to an outperform rating from neutral. “In addition to the potentially positive catalyst of lower mortgage rates for Zillow’s core brokerage business, we see Zillow’s software and services (S & S) initiatives adding to potential upside risk to our estimates,” wrote analyst Jay McCanless. McCanless raised his price target by 60%, to $80 from $50. This updated forecast implies that shares of Zillow could jump 39% from their Wednesday closing price. Pinterest has beaten analyst estimates 86% of the time and has historically risen 3% on the back of strong results. Shares of the social media platform have slipped almost 14% this year. The majority of analysts are bullish on platform, while the average price target implies 33% upside. Earlier this month, Bank of America reiterated its buy rating and $45 price objective, or about 38% higher than Pinterest closed Wednesday. Analyst Justin Post said he was optimistic on the company’s new AI tools, showcased at the Pinterest Presents event. “Products outlined at the event included: 1) Performance+ suite (growing set of AI and automation tools), 2) ROAS bidding solution, 3) Promotion feature, 4) CAPI Connect, 5) Advertising expansion to 30 new countries, and 6) New catalog upload tool (still in development),” he wrote. Marketing software developer HubSpot has a perfect earnings beat rate and has typically gained nearly 4% following its quarterly results. Shares have slipped 4% this year. Last week, Evercore ISI added HubSpot to its tactical outperform list, even while keeping its formal rating in-line. Analyst Kirk Materne’s $610 price target is roughly 9% higher than where HubSpot stock is currently trading. “After underperforming the S & P and [ iShares Expanded Tech-Software Sector ETF ] over the past 1- and 3-years, we believe that the risk/reward associated with HUBS has become more attractive at current levels and our most recent partner survey indicates that business levels appear to be stabilizing,” the Evercore ISI analyst wrote. Analysts are overwhelmingly bullish on HubSpot, with the average price target representing a potential 11% gain.
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