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3 Stocks With Price and Earnings Estimate Momentum

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This earnings season is turning out to be another winner with approximately 90% of the S&P companies beating earnings estimates so far. With stocks on the verge of new highs yet again, this is a great time to revisit the Price & Earnings Estimate Momentum screen.

We’re looking for Zacks Rank #1s (Strong Buys) or #2s (Buys) with a Momentum Style Score of “B” or better. In addition to this though, we want these stocks to be at or near their 52-week highs. This combination of upward price action and rising earnings estimate revisions shows stocks that are on the move right now… and should continue that trend in the future.

Below are three stocks that were recently in this screen, but make sure to look at the full list as it changes daily.

Agilent Technologies A

As we just saw in the fight against covid, there are some very smart people making a difference in labs all over the world. And they’re not just working in pharmaceuticals, but also in areas like chemicals, energy, environmental health and food safety. They’re doing things that have never been done before… and you can bet that they’re using tools and capabilities made possible by Agilent Technologies (A).

The company is an original equipment manufacturer (OEM) of a broad-based portfolio of test and measurement products serving multiple end markets. In addition to all those fields mentioned above, A has also been diversifying into new areas like industrial, chemical and electronics. Its three business segments are Life Sciences & Applied Materials Group (LSAG, 43% of 2020 revenues), Diagnostics & Genomics Group (DGG, 20%) and Agilent Cross Lab Group (ACG, 37%).

Shares are up nearly 58% over the past 12 months with approximately 30% of that coming year-to-date. Over the past four quarters, A has beaten the Zacks Consensus Estimate each time with an average positive surprise of 15.8%.

In the fiscal second quarter, earnings per share of 97 cents eclipsed our expectation by 18.3%. Revenue of $1.53 billion improved 23% from last year and outperformed the Zacks Consensus Estimate at $1.39 billion.

The company’s strong growth was broad-based across all end markets, geographies and business groups. Best of all, it expects such momentum to continue in subsequent quarters. As a result, A raised its outlook for fiscal 2021.

Earnings per share are now expected between $4.09 and $4.14, instead of the previous range of $3.80 to $3.90. Revenue is now expected between $6.15 billion and $6.21 billion, compared to the previous outlook of $5.83 billion to $5.96 billion.

If the company itself is raising expectations, then you know the analysts won’t be far behind. The Zacks Consensus Estimate for this year (ending October 2021) has advanced 6.4% over the past 90 days to $4.13, while expectations for next year (ending October 2022) increased 6.5% in that time to $4.61. Most impressively though, analysts expect year-over-year growth of 11.6%.

Danaher Corporation DHR

Danaher Corporation (DHR) has averaged a positive surprise of more than 27.5% over the past four quarters, which is pretty impressive since that period went right through the heart of the pandemic.

But do you know what’s downright astounding? This global conglomerate has been beating analyst estimates for at least five years now! That’s over 20 quarters, displaying a knack for stable and strong performances along with exceptional expectation management.

DHR’s diversification is one of its biggest assets. The company designs, manufactures and markets diverse lines of professional, industrial, commercial and consumer products. Its segments include Life Sciences (51.7% of revenues in Q2 of 2021), Diagnostics (32.4%) and Environmental & Applied Solutions (15.9%). Shares are up nearly 48% over the past year, including 34.4% so far in 2021.

Furthermore, DHR has always relied on inorganic activities to keep its broad-based strength. For example, it recently agreed to acquire Aldevron, which specializes in manufacturing mRNA, proteins and plasmid DNA, for $9.6 billion. The deal will help strengthen its foothold in the genomic medicine field.

In its second quarter report, earnings per share of $2.46 jumped 71% year over year and topped the Zacks Consensus Estimate by nearly 21%. Revenues of $7.2 billion improved 36.5% from the previous year.

The whole portfolio contributed to strong results. Revenue for the Life Sciences segment were up 41.5%, while Diagnostics jumped 40.5% and Environmental & Applied Solutions was up 15.5%.

Analysts have boosted their earnings estimates since the quarterly report. The Zacks Consensus Estimate for this year is up 5.5% over the past 60 days to $9.40. Expectations for next year increased 5% in that time to $9.45.

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Zacks Investment Research


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Robert Half International RHI

Now that the pandemic is on its last legs (except for that pesky delta variant), employers will be in a hiring frenzy in the second half of the year. As jobs reports have been outlining for months now, there’s a dearth of labor out there as people sheltered in place and survived on unemployment benefits and stimulus packages. But that’s going to change as we get back to normal… and Robert Half International (RHI) will play a big part.

RHI is one of the world’s largest providers of professional consulting and staffing services. It offers contract and permanent placement solutions for finance & accounting, technology, marketing & creative, legal and administrative & customer support roles. It has operations in more than 400 locations worldwide. Shares are up 93.1% over the past twelve months, including 58.8% so far this year.

One of the big stars for RHI is Protiviti, a global consulting firm and wholly owned subsidiary that offers clients consulting solutions in finance, technology, operations, data, analytics, governance, risk and internal audit. Protiviti is strongly positioned in the market and is a double-digit margin and revenue performer. In the second quarter, revenues soared 61.6% to $459 million.

Speaking of that report, RHI put together its fifth straight positive surprise in the second quarter. Earnings per share of $1.33 beat the Zacks Consensus Estimate by over 26%, while revenue of $1.58 billion stopped our expectation by 6.5%. The topline also jumped over 42% year over year as RHI enjoyed broad based demand for staffing and business consulting services.

This quarterly report was only a few days ago, which explains why earnings estimates have surged of late. The Zacks Consensus Estimate for this year is up 17.5% in 30 days to $4.89, while next year climbed 11.8% to $5.11 in that time. Therefore, analysts currently expect year-over-year profit growth of 4.5%.

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Zacks Investment Research


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Danaher Corporation (DHR) : Free Stock Analysis Report

Agilent Technologies, Inc. (A) : Free Stock Analysis Report

Robert Half International Inc. (RHI) : Free Stock Analysis Report

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