With the Q3 earnings season taking center stage, investors are all eagerly waiting to note the daily beats and misses of the mega companies.
Our latest Earnings Preview (dated Oct 27, 2017) reveals that 54% S&P 500 companies have already posted results this season. Total earnings for these companies (accounting for 64.2% of the index’s total market capitalization) are up 8.7% year over year on 6.7% higher revenues, with 75.7% beating earnings estimates and 66.2% surpassing top-line expectations. Based on the hitherto observed pattern, the Q3 reported cycle has been robust so far!
Industrial stocks have been in investors’ good graces, of late, driven by impressive factors such as elevated rebuilding activities (thanks to two major hurricanes), an upbeat job market picture, as well as recovery of the Chinese economic conditions.
We note that the Industrial Products sector is currently placed at the top 44% out of the 16 Zacks Sectors. This sector has also been outperforming the S&P 500 market in recent times. In three months’ time, the sector has recorded around 5.3% growth, above the S&P 500 index’s growth of 4.3%.
As of Oct 27, we project that earnings and revenues of all the Industrial stocks in the S&P 500 Group would climb 18% and 4.2%, respectively, year over year.
What’s in Store for These 3 Industrial Stocks?
AGCO Corporation AGCO is scheduled to report third-quarter results before the market opens. The company pulled off an impressive average positive earnings surprise of 39.70% over the last four quarters.
In second-quarter 2017, the company’s earnings of $1.15 per share topped the Zacks Consensus Estimate by 10.6%. However, we cannot conclusively predict that AGCO Corporation will likely beat estimates in this quarter. That is because a stock should have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
That is not the case here as we will see below.
AGCO Corporation’s Earnings ESP is -3.77%, as the Most Accurate estimate of 70 cents comes below the Zacks Consensus Estimate of 72 cents. Though the company carries a favorable Zacks Rank #3, we also need to have a positive ESP to be confident of an earnings beat.
AGCO Corporation Price and EPS Surprise
AGCO Corporation Price and EPS Surprise | AGCO Corporation Quote
You can see the complete list of today’s Zacks #1 Rank stocks here.
Alamo Group Inc. ALG is set to report its numbers after the market closes. The company generated an average positive earnings surprise of 0.51% over the trailing four quarters.
The company’s second-quarter earnings of $1.05 per share were in line with the Zacks Consensus Estimate. For the to-be-reported quarter, we cannot conclusively predict that Alamo Group’s earnings will likely beat estimates. The company carries an unfavorable Zacks Rank #4 (Sell) and its Earnings ESP is currently pegged at 0.00%. Its Most Accurate estimate of $1.24 per share comes in line with the Zacks Consensus Estimate.
Alamo Group, Inc. Price and EPS Surprise
Alamo Group, Inc. Price and EPS Surprise | Alamo Group, Inc. Quote
Xylem Inc. XYL is slated to release earnings figures before the market opens. The company has an average positive earnings surprise of 0.45% for the past four quarters.
Increased residential and commercial building services businesses are anticipated to boost Xylem’s Applied Water segment’s performance. The Zacks Consensus Estimates for revenues from this segment is pegged at $357 million, higher than $333 million recorded in the prior quarter. On the other hand, stronger treatment applications and transport businesses are expected to strengthen near-term results of the company’s Water Infrastructure segment. The Zacks Consensus Estimates for revenues for this segment is pegged at $515 million for the to-be-reported quarter, higher than $419 million recorded in the previous quarter. (Read More: Xylem to Report Q3 Earnings: What's in the Offing?)
Xylem currently carries a Zacks Rank of 2. In the prior quarter, the company’s earnings came in at 59 cents, surpassing the Zacks Consensus Estimate of 57 cents. The Zacks Consensus Estimate for the stock is currently pegged at 64 cents for the quarter under review.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>
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
AGCO Corporation (AGCO) : Free Stock Analysis Report
Alamo Group, Inc. (ALG) : Free Stock Analysis Report
Xylem Inc. (XYL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research