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5 stocks to buy ahead of this month’s results


We are in the final stage of the second quarter 2022 reporting cycle. Market participants have been watching this earnings season closely as it provides the most descriptive view of the health of US businesses amid record inflation and a slump. an extremely hawkish Fed. Earnings results have been better than expected so far, with no visible signs of an impending recession.

Here, we’ve selected five companies that are expected to report results in the second half of August. The combination of a favorable Zacks ranking and a possible beating in earnings should drive their stock price. These companies are — Keysight Technologies Inc. KEYS, Dollar General Corp. CEO, About Holding SA ONON, Intuit Inc. INTU and Beauty Ulta Inc. ULTA.

Second quarter results so far

As of August 10, 452 companies in the S&P 500 index had released their financial figures. Total profit for these companies was up 8.1% year-over-year, on revenue up 15.3%, with 77.4% beating EPS estimates and 68.4% below. income estimates.

Our latest projection is that for the second quarter as a whole, total S&P 500 earnings will rise 6.8% year over year with revenue up 14% and margin compression. net of 0.82%. These show a notable improvement from 2.1% year-over-year earnings growth on revenue up 9.7% and an estimated 0.95% net margin squeeze. at the beginning of the reporting cycle.

Our top picks

Five companies are expected to beat earnings estimates this month. Each of these stocks carries a Zacks rank of #2 (buy) and has a positive ESP gain. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that for stocks with the combination of a Zacks rank of #3 (Hold) or better and a positive earnings ESP, the probability of earnings overshoot is as high as 70%. These shares should appreciate after the publication of their results. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

The chart below shows the price performance of our five picks over the past quarter.

Image source: Zacks Investment Research

key sight is growing in both the Communications Solutions Group and the Electronic Industrial Solutions Group. KEYS is expected to benefit from strong demand for semiconductor measurement solutions as semiconductor companies increasingly develop 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 growing demand for power management applications is the main catalyst for growth.

KEYS has an ESP on gains 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 has improved 0.1% over the past 30 days.

Keysight has had earnings surprises in the last four reported quarters, averaging 8%. The company is expected to report results on August 17, after the closing bell.

General dollar remains a compelling growth story in the retail space. Thanks to its value-creating initiatives, its defensive product mix and its real estate growth strategy, DG has the capacity to gain market share. Its commitment to better pricing, private label offerings, efficient inventory management and a merchandise initiative should drive sales.

We also remain encouraged by the multitude of initiatives at Dollar General such as DG Fresh, Fast Track, Non-Consumables, Digitization and Private Fleet which should drive comparable store sales growth and margin expansion. Significantly, we expect comparable store sales to grow 3.5% and 3% in fiscal 2022 and 2023, respectively.

DG has an ESP on gains of +0.99%. It forecasts a profit growth rate of 13.3% for the current year (ending in January 2023). The Zacks consensus estimate for current-year earnings has improved 0.4% over the past 30 days.

Dollar General has recorded earnings surprises over the past four reported quarters, averaging 2.8%. The company is expected to release its results on August 25, before the opening bell.

Intuitive benefits from strong revenue momentum from the online ecosystem and strong business tax revenues. The TurboTax Live offering is also driving growth in the consumer tax industry.

Strong momentum in INTU’s lending product, QuickBooks Capital, remains positive. Additionally, Intuit’s strategy of moving its business to a cloud-based subscription model will help generate stable long-term revenue.

INTU has an ESP on gains 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 has improved 0.8% over the past 90 days.

Intuit has posted earnings surprises over the past four reported quarters, averaging 16.8%. The company is expected to report results on August 23, after the closing bell.

Ultimate Beauty benefits from its omnichannel strength, thanks to efficient in-store and digital operations. ULTA’s skincare category has grown in popularity due to growing consumer interest in personal care. Additionally, management raised its guidance for fiscal year 2022.

Ulta Beauty has been seeing market share gains in major beauty categories for some time, with skincare standing out. Its top priority is to strengthen its omnichannel business and explore the potential of physical and digital facets.

ULTA has an ESP on gains of +3.27%. The Zacks consensus estimate for current-year earnings has improved 8% over the past 90 days. Ulta Beauty has had earnings surprises in the last four reported quarters, averaging 49.8%. The company is expected to report results on August 25, after the closing bell.

Pending develops and distributes sports products worldwide. ONON offers footwear, clothing and sports accessories. ON Holding offers its products through independent retailers and distributors, online and in stores.

ONON has an ESP on earnings of +433.33%. It has an expected profit growth rate of 58.3% for the current year. The Zacks consensus estimate for current year earnings has improved 58.3% over the past 7 days.

ON Holding recorded earnings surprises in two of the last four reported quarters, averaging 106.7%. The company is expected to release its results on August 16, before the opening bell.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

Zacks names ‘only one best choice for doubling up’

From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.

It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could jump in at any moment.

This company could rival or surpass other recent Zacks stocks which are expected to double, such as Boston Beer Company which soared +143.0% in just over 9 months and NVIDIA which soared +175.9% in one. year. Top >>

Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report

Dollar General Corporation (DG): Free Stock Analysis Report

Intuit Inc. (INTU): Free Inventory Analysis Report

Ulta Beauty Inc. (ULTA): Free Stock Analysis Report

Keysight Technologies Inc. (KEYS): Free Stock Analysis Report

On Holding AG (ONON): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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