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Buy 6 Top Stocks Set to Beat on Earnings in Q2 Today

Nalak Das

The epic bull run of Wall Street continues on rate cut hope ahead of the 2-day FOMC meeting of the Fed, starting from Jul 30. The second-quarter GDP was also better than the consensus estimate buoyed by strong consumer spending despite declining business expenditures.

Meanwhile, second-quarter 2019 earnings expectations have improved gradually this month. In spite of a prolonged trade conflict with China and limited hope of any near-term solution to tariff war, we do not see a broad-based decline in guidance by U.S. corporates. In line with better-than-expected earnings reports, six companies are set to beat earnings estimates today (Jul 30) after the closing bell.

Better-Than-Expected Second-Quarter Earnings Results

As of Jul 26, 220 S&P 500 members reported second-quarter earnings results. Total earnings for these 220 index members are up 4.7% from the same period last year on 5.2% higher revenues. Notably, 78.2% companies surpassed EPS estimates while 57.3% beat revenue estimates.

At present, total second-quarter earnings for the S&P 500 Index are expected to remain flat with the year-earlier period on 4.1% higher revenues. This is a significant improvement over an earnings decline of 3.4% on 3.9% higher revenues, expected on Jul 12. Notably, Wall Street had witnessed negative earnings (0.2% earnings decline on 4.5% higher revenues) in the first quarter for the first time since the second quarter of 2016. (Read More: A Reassuring Earnings Picture)

6 Stocks Set to Beat on Earnings in Second-Quarter

We have narrowed down our search to six companies which will release their earnings results today. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are expected to pop on their earnings release irrespective of already solid gains year to date.

Molina Healthcare Inc. MOH is a multi-state healthcare organization, which provides managed health care services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces. The stock sports a Zacks Rank #1.

Molina Healthcare has an Earnings ESP of +3.02% for the current quarter. The company has an expected earnings growth rate of 13.8% and 3.3% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current quarter and year improved 0.4% and 0.3%, respectively, over the last 30 days. The company delivered positive earnings surprise in the last four quarters with an average beat of 88.2%. The stock has soared 19.5% year to date.

 

NuVasive Inc. NUVA develops and markets minimally disruptive surgical products and procedurally integrated solutions for spine surgery focusing on applications for spine fusion surgery, including ancillary products and services used to aid in the surgical procedure. The stock sports a Zacks Rank #1.

NuVasive has an Earnings ESP of +0.40% for the current quarter. The company has an expected earnings growth rate of 2.2% for the current year. The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 6.9%. The stock has gained 17.4% year to date.



Gilead Sciences Inc. GILD is a research-based biopharmaceutical company that discovers, develops, and commercializes medicines in the areas of unmet medical needs in the United States, Europe, and internationally. The stock carries a Zacks Rank #2.

Gilead Sciences has an Earnings ESP of +2.41% for the current quarter. The company has an expected earnings growth rate of 3.6% for the current year. The Zacks Consensus Estimate for the current quarter and year improved 0.6% and 0.3%, respectively, over the last 30 days. The company delivered positive earnings surprise in the last four quarters with an average beat of 6.9%. The stock has advanced 8.5% year to date.



Groupon Inc. GRPN operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount in North America and internationally. The stock carries a Zacks Rank #2.

Groupon has an Earnings ESP of +25% for the current quarter. The company has an expected earnings growth rate of 38.9% for the current year. The Zacks Consensus Estimate for the current year improved 8.7% over the last 30 days. The stock has advanced 8.1% year to date.



Zendesk Inc. ZEN is a software development company providing SaaS products for organizations. Its flagship product is Zendesk Support, a system for tracking, prioritizing and solving customer support tickets across various channels. The stock has a Zacks Rank #2.

Zendesk has an Earnings ESP of +7.84% for the current quarter. The company has an expected earnings growth rate of 66.7% and 27.3% for the current quarter and year, respectively. The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 141.7%. The stock has jumped 59.1% year to date.



Public Storage PSA is a leading self-storage real estate investment trust in the United States. The company acquires, develops, owns and operates self-storage facilities, generally on a month-to-month basis for business as well as personal use. The stock has a Zacks Rank #2.

Public Storage has an Earnings ESP of +0.47% for the current quarter. The company has an expected earnings growth rate of 1.6% for the current year. The Zacks Consensus Estimate for the current year improved 0.3% over the last 30 days. The company delivered positive earnings surprise in the last four quarters with an average beat of 0.8%. The stock has surged 20% year to date.



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