The Q1 earnings season is in the nascent stage with 31 S&P 500 participants having reported results so far. The season has started on a strong note courtesy of earnings beats from big names in the banking space like JPMorgan Chase & Co. JPM. This week is going to an extremely busy one with several companies reporting their quarterly results. This week alone will see 177 companies, including 61 S&P 500 participants, revealing their Q1 numbers.
The transportation sector (one of the 16 Zacks sectors) too is off to a strong start with key sector participants like Delta Air Lines DAL and United Continental Holdings UAL reporting better than expected earnings. The sector, which is projected to end Q1 on a sorry note with its bottom-line contracting 21.7% as per the latest Earnings Preview, is a highly diversified one. Apart from airline companies, it also includes shippers, trucking companies and railroads to name a few.
Railroads, which have been on a high since the victory of Donald Trump as US president, form an important part of the transportation sector. The optimism surrounding the sector can be gauged from the fact that the Zacks categorized Transportation- Rail industry has outperformed the S&P 500 index since Nov 8. The industry has gained 17.14%, compared with the S&P 500’s gain of 8.2%.
Against this backdrop, investors will keenly await earnings reports of key railroads companies like CSX Corporation CSX and Canadian Pacific Railway Limited CP on Apr 19.
According to our quantitative model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 (Hold) or better – to increase its odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
In this context, the Jacksonville, FL-based, CSX Corporation’s Zacks Rank #2 (Buy) and an Earnings ESP of +2.33%, makes us reasonably confident of an earnings beat in Q1 (Read more: CSX Corporation Q1 Earnings: Is a Beat in the Cards?).
CSX Corporation Price and EPS Surprise
CSX Corporation Price and EPS Surprise | CSX Corporation Quote
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, our quantitative model does not conclusively show an earnings beat for the Calgary, Canada-based Canadian Pacific Railway Limited in the Q1. This is because the company currently has a Zacks Rank #3 and an Earnings ESP of -2.11% (Most Accurate estimate of $1.86 is 4 cents below the Zacks Consensus Estimate).
Previously too, our model did not conclusively show an earnings beat as the Earnings ESP was -1.05%. The Zacks Rank was the same (Read more: Canadian Pacific Q1 Earnings: What's in the Cards?).
Canadian Pacific Railway Limited Price and EPS Surprise
Canadian Pacific Railway Limited Price and EPS Surprise | Canadian Pacific Railway Limited Quote
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>
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
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
CSX Corporation (CSX): Free Stock Analysis Report
Canadian Pacific Railway Limited (CP): Free Stock Analysis Report
J P Morgan Chase & Co (JPM): Free Stock Analysis Report
To read this article on Zacks.com click here.