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How to Invest for the 2021 Earnings Boom

·3 min read
  • (1:45) - Breaking Down The Top Performers During Earnings Season

  • (10:30) - What Industries Struggled The Most?

  • (15:40) - The Pandemic Stock Plays: Are They Still A Good Investment?

  • (25:15) - Where Should You Be Looking Within The Energy Industry?

  • (29:50) - Episode Roundup: LUV, UAL, DAL, SAVE, ZM, AMZN, TGT, DKS, M, MAC, CVX

  •                Podcast@Zacks.com


First quarter earnings are expected to be up 19.3% year-over-year with even stronger growth later in the year.


Welcome to Episode #265 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is joined by Zacks Director of Research, and earnings guru, Sheraz Mian, to talk about the first quarter earnings season and what earnings growth is looking like for all of 2021.

Earnings to Boom in 2021

Analysts have been raising their earnings estimates heading into the first quarter earnings season.

Earnings for the S&P 500 are now expected to be up 19.3% year-over-year with revenue up 5.3%.  It is reminiscent of the big earnings gained achieved after the federal corporate tax cuts were passed in 2017.

The rest of the year is also expected to be bullish, with strong earnings growth expected, as the economy reopens after the coronavirus pandemic.

Where Should Investors Look for Opportunities?

1.       Pandemic plays have come down off their 2020 highs, including high flier Zoom Video ZM, which has fallen about 14% in the last month. Is it time to dive in? It’s still expensive with a forward P/E of 91.

2.       Amazon AMZN was a big winner due to its online delivery, but those shares have stalled out in the last 6 months, and are up just 0.3% during that time. But Amazon is expected to grow earnings by another 18% this year.

3.       Retailers that had to pivot quickly to online only sales because their brick-and-mortar stores were shut, like Macy’s M could be post-pandemic winners as consumers yearn for the days of walking through the aisles and browsing.

4.       Additionally, some of the mall REITs could still see further upside even though they’ve soared in 2021 on recovery hopes. The Macerich Company MAC is up 31% year-to-date but still sports a forward P/E of just 6.

5.       Energy has had a huge run in 2021, but the earnings estimates have doubled over the last 3 months for the group. Sheraz believes every investor should have some energy exposure. Chevron CVX has fallen over 5% in the last 5 sessions and pays a dividend yielding 5%.

What else should you know about the bullish earnings outlook for 2021?

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns shares of AMZN in her personal portfolio.]

5 Stocks Set to Double

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Today, See These 5 Potential Home Runs >>


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Macerich Company The (MAC) : Free Stock Analysis Report
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