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5 Large-Cap Stocks Likely to Win Big on Earnings Next Week

Five large-cap (market capital > $10 billion) stocks will report earnings results next week. These are: DHI, RNG, DOCS, DIS and AFRM.

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This story originally appeared on Zacks

The major part of the third-quarter 2021 earnings season is over. Results are pretty encouraging despite prolonged supply-chain disruptions, a labor shortage, higher inflationary pressure and the resurgence of the Delta variant of the coronavirus.

- Zacks

Market participants have high expectations from this reporting cycle as overall earnings of corporate America are likely to remain robust after skyrocketing in the second quarter. The earnings scenario is improving as we are entering deep into the reporting cycle.

Robust Third-Quarter Earnings So Far

As of Nov 4, 421 S&P 500 companies reported third-quarter results. Total earnings of these companies are up 41.9% year over year on 18.9% higher revenues with 80.5% beating EPS estimates and 75.1% surpassing revenue estimates.

At present, total third-quarter earnings of the market's benchmark — the S&P 500 Index — are projected to jump 37.6% from the same period last year on 14.9% higher revenues. This suggests a steady improvement from 26.1% earnings growth on 14% higher revenues, estimated at the beginning of the reporting cycle.  

Earnings results of the first two quarters of this year were favorably impacted since the corresponding quarters of last year were affected by the pandemic-led lockdowns and restrictions. This was evident from 95% year-over-year earnings growth on 25.3% higher revenues in the second quarter and 49.3% year-over-year earnings growth on 10.3% higher revenues in first-quarter 2021.

Nevertheless, the U.S. economy started reopening partially albeit at a languid pace since the third quarter of 2020. Notwithstanding favorable comparisons with last year, third-quarter 2021 earnings estimates reflect genuine growth, climbing more than 23% from the pre-pandemic third-quarter of 2019.

Stocks in Focus

Five large-cap (market capital > $10 billion) stocks will report earnings results next week. Each of these stocks carries a Zacks Rank# 3 (Hold) and has a positive Earnings ESP. 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 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The chart below shows the price performance of five stocks in focus in the last quarter.

Zacks Investment ResearchImage Source: Zacks Investment Research

D.R. Horton Inc. DHI has outperformed the industry year to date. The earnings estimates for the current year have been trending upward. The uptick is expected to continue, owing to its industry-leading market share, solid acquisition strategy, well-stocked supply of land, lots and homes, along with affordable product offerings across multiple brands.

The company has an Earnings ESP of +0.79% for fourth-quarter fiscal 2021. It has an expected earnings growth rate of 19.4% for the current year (September 2022). The Zacks Consensus Estimate for current-year earnings improved 2.2% over the last 30 days.

It recorded earnings surprises in two out of the last four reported quarters, with an average beat of 18.7%. The company is set to release earnings results on Nov 9, before the opening bell.

RingCentral Inc. RNG is expected to benefit from the solid demand for its Unified Communications as a Service solutions and RingCentral Office owing to the coronavirus-induced work-from-home wave. It has been benefiting from strong subscription revenue growth, driven by an expanding clientele. The company’s increasing international presence is a key catalyst.

The company has an Earnings ESP of +10.57% for third-quarter 2021. It has an expected earnings growth rate of 32.7% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.8% over the last 60 days. It recorded earnings surprises in two out of the last four reported quarters, with an average beat of 9.5%. The company is set to release earnings results on Nov 9, after the closing bell.

Doximity Inc. DOCS provides a cloud-based digital platform for medical professionals in the United States. Its cloud-based platform enables medical professionals to collaborate with their colleagues, coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, and manage their careers.

The company has an Earnings ESP of +14.58% for second-quarter fiscal 2022. The Zacks Consensus Estimate for current-year earnings improved 32.3% over the last 90 days. The company is set to release earnings results on Nov 9, after the closing bell.

The Walt Disney Co. DIS has benefitted from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering. The launch of STAR+, its stand-alone general entertainment and sports streaming service in Latin America is expected to boost subscriber growth.

Revival in Parks, Experiences and Products businesses hold promise. The solid performance of Shang Chi and the Legend of the Ten Rings at the box-office and the upcoming releases of The King’s Man and Deep Water are anticipated to aid Studio Entertainment’s top line.

The company has an Earnings ESP of +9.81% for the fourth quarter of fiscal 2021. It has an expected earnings growth rate of more than 100% for the current year (September 2022). The Zacks Consensus Estimate for current-year earnings improved 0.4% over the last 7 days.

It recorded earnings surprises in two out of the last four reported quarters, with an average beat of 113.6%. The company is set to release earnings results on Nov 10, after the closing bell.

Affirm Holdings Inc. AFRM operates a platform for digital and mobile-first commerce in the United States and Canada. its platform includes a point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app.

The company has an Earnings ESP of +39.50% for first-quarter fiscal 2022. It has an expected earnings growth rate of 68.5% for the current year (June 2022). The Zacks Consensus Estimate for current-year earnings improved 5.9% over the last 30 days. The company is set to release earnings results on Nov 10, after the closing bell.



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The Walt Disney Company (DIS): Free Stock Analysis Report

 

D.R. Horton, Inc. (DHI): Free Stock Analysis Report

 

Ringcentral, Inc. (RNG): Free Stock Analysis Report

 

Affirm Holdings, Inc. (AFRM): Free Stock Analysis Report

 

Doximity, Inc. (DOCS): Free Stock Analysis Report

 

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