5 High-Flying Stocks Set to Beat on Earnings in Q2 Next Week

Wall Street is reeling under severe volatility since the beginning of August after a two-month long bull run. All three major stock indexes -- the Dow, the S&P 500 and the Nasdaq Composite -- have lost 1.9%, 1.4% and 1.8%, respectively, so far this month.

A less-than-expected dovish stance taken by the Fed and President Donald Trump’s tweet expressing desire to impose 10% tariff on a new set of $300 billion Chinses goods effective Sep 1, are the two primary factors responsible for volatile trading.

Meanwhile, second-quarter 2019 earnings results have so far come in better than expected. In spite of a prolonged trade conflict with China and limited hope of any near-term solution to the tariff war, there hasn’t been any broad-based decline in earnings although the pace has slowed. In line with better-than-expected earnings reports, five companies are set to beat earnings estimates next week.

Second-Quarter 2019 Earnings Results at a Glance

As of Aug 7, 428 S&P 500 members reported second-quarter earnings results. Total earnings for these 428 index members are up 0.9% from the same period last year on 5.1% higher revenues. Notably, 75.5% companies surpassed EPS estimates while 57% beat revenue estimates.

At present, total second-quarter earnings for the S&P 500 Index are expected to be down 0.3% from the prior-year period on 4.5% higher revenues. This is a massive improvement from an earnings decline of 3.4% on 3.9% higher revenues, expected in the beginning of the second-quarter earnings session.

Notably, Wall Street had witnessed negative earnings (0.2% earnings decline on 4.2% higher revenues) in the first quarter for the first time since the second quarter of 2016. (Read More: A Stable Earnings Picture)

5 Stocks Set to Beat on Q2 Earnings

At this stage, it will be prudent to invest in stocks with a favorable Zacks Rank and positive Earnings ESP. Strong earnings results will likely ensure a northbound move in stock prices of these companies in the near term despite market volatility.

We have narrowed down our search to five companies, which will release their earnings results next week. Each of these stocks carries a Zacks Rank #2 (Buy) and popped in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%.

Barrick Gold Corp. GOLD is a leading international gold producer with low-cost mines in North and South America. It also explores copper and silver deposits. Barrick Gold has an Earnings ESP of +0.70% for the current quarter.

The company has an expected earnings growth rate of 42.9% and 31.4% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current quarter and year improved 11.1% and 17.9%, respectively, over the last 30 days.

The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 0.4%. The stock has surged 35.4% in the past six months. Barrick Gold is expected to release earnings results on Aug 12, before the opening bell.

Victory Capital Holdings Inc. VCTR is an integrated multi-boutique asset management firm. It provides institutions, financial advisors and retirement platforms. Victory Capital Holdings has an Earnings ESP of +2.29% for the current quarter.

The company has an expected earnings growth rate of 54.9% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current quarter and year improved 2.7% and 3.3%, respectively, over the last 30 days.

The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 1.3%. The stock has jumped 56.3% in the past six months. Victory Capital Holdings is expected to release earnings results on Aug 12, after the closing bell.

JD.com Inc. JD operates as an e-commerce company and retail infrastructure service provider in the People's Republic of China. It operates in two segments, JD Retail and New Businesses. JD.com has an Earnings ESP of +17.86% for the current quarter.

The company has an expected earnings growth rate of 80% and 100% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current year improved 1.5% over the last 30 days.

The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 105.1%. The stock has soared 13.4% in the past six months. JD.com is expected to release earnings results on Aug 13, before the opening bell.

CACI International Inc. CACI provides the IT and network solutions needed to prevail in today's new era of defense, intelligence and e-government. CACI International has an Earnings ESP of +4.02% for the current quarter.

The company has an expected earnings growth rate of 3.4% and 13.3% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current quarter improved 0.5% over the last 30 days.

The company delivered positive earnings surprise in the last four quarters with an average beat of 25.9%. The stock has surged 23.6% in the past six months. CACI International is expected to release earnings results on Aug 14, after the closing bell.

Arcturus Therapeutics Holdings Inc. ARCT is a preclinical-stage biopharmaceutical company. It focuses on the discovery, development and commercialization of RNA medicines. Arcturus Therapeutics has an Earnings ESP of +18.36% for the current quarter.

The Zacks Consensus Estimate for the current quarter and year improved 8.6% and 5.6%, respectively, over the last 30 days. The stock has jumped 101.7% in the past six months. Arcturus Therapeutics is expected to release earnings results on Aug 15, after the closing bell.

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JD.com, Inc. (JD) : Free Stock Analysis Report
 
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