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Watch out. Some companies reporting next week could see earnings blow-ups
Several companies scheduled to release quarterly results next week could see their shares take a dive after Wall Street analysts lowered their latest earnings estimates. Third-quarter earnings season is already off to a strong start. As of Tuesday, 19% of S & P 500 companies had reported, with earnings and revenue coming in 6.1% and 1.4% above analysts’ expectations, respectively, according to LSEG. Compared to the year-ago quarter, earnings are up 4%, while revenue is ahead 4.2%. But a host of stocks could take a hit next week, after analysts slashed their earnings expectations in recent months. To find them, CNBC Pro screened for S & P 500 companies that could pull back, based on: Consensus earnings per share estimates down 10% or more in the past 3 and 6 months Buy ratings from fewer than 50% of analysts Reporting next week Below are some of the stocks that made the screen. Intel has the lowest percentage of buy ratings among analysts in the CNBC screen at just 6.7%. The Street’s consensus estimate is that the chipmaker lost 2 cents a share in its latest quarter. Estimates have dropped nearly 37% over the past three months and more than 84% in the past six. Intel’s troubles in China are among the challenges it faces. Last week, the Cybersecurity Association of China alleged that Intel’s chips had vulnerabilities and security risks , saying that problems with product quality and security management reveal an “irresponsible attitude toward its customers,” according to a Google translation. Shares have fallen more than 55% this year and more than 4% this month. Intel is expected to report earnings after the market close on Oct. 31. INTC YTD mountain INTC, year-to-date Of all the names that made the screen, Humana has seen the biggest percentage decline in earnings estimates in the past three months, with analysts slashing forecasts by around 62%, according to FactSet data. Heading into quarterly results on Oct. 30, only around 31% of those analysts covering the health insurance provider have a buy rating. When Humana last reported results in late July, it told investors it still expected to earn about $16.00 a share in all of 2024 versus what was then an analyst consensus of $16.34, and a range of expectations up to as much as $17.25, FactSet data shows. At the time, Humana management highlighted on its conference call with investors that health care cost pressures would likely persist in the second half, saying it expected “higher net inpatient costs observed in the second quarter to continue for the remainder of the year.” Shares have tumbled about 43% in all of 2024 and more than 32% in the past three months alone. Most recently, Cigna and Humana were reported by Bloomberg News to have revived merger talks that had fallen apart in late 2023. HUM 3M mountain Humana shares over the past three months. Among industrial companies, fertilizer maker CF Industries showed up on the screen. Only 24% of analysts covering it have a buy rating, and estimates have fallen about 48% and 57% over the course of the past three and six months, respectively. Shares in the Northbrook, Illinois based company, which says it’s working to produce low-carbon nitrogen fertilizer, are up about 6% in 2024. CF 3M mountain CF Industries shares are ahead more than 19% in the past three months. Current estimates project that CF Industries earned $1.16 per share in its latest quarter. The company is expected to post quarterly results on Oct. 30.
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