For Immediate Release
Chicago, IL – March 29, 2021 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes FedEx Corporation
FDX
, NIKE, Inc.
NKE
, Costco Wholesale Corporation
COST
, Micron Technology, Inc.
MU
, Walgreens Boots Alliance, Inc.
WBA
, McCormick & Company, Incorporated
MKC
, Lululemon Athletica Inc.
LULU
and JPMorgan Chase & Co.
JPM
.
A Very Strong Q1 and 2021 Earnings Picture
We started seeing a positive shift in the overall earnings picture in July last year when estimates started rising again after the sharp Covid-driven cuts.
This improving trend in estimate revisions remained in place over the following months and actually accelerated over the last few months.
The expectation is for total S&P 500 earnings to increase +19.8% in Q1 from the same period last year on +5.4% higher revenues. Today’s +19.8% earnings growth rate is up from +19.4% last week.
Part of the strong growth in Q1 is reflective of easy comparisons, as the last month of 2020 Q1 was weighed down by the pandemic, though the full impact showed up in Q2. Those easy comparisons are notable for the Finance, Consumer Discretionary, Transportation and Energy sectors. Profitability in these sectors is notably above the Covid-hit levels of the year-earlier period, but they are still below the comparable period in 2019 (2019 Q1).
But it isn’t just easy comparisons that is giving us the strong aggregate growth in 2021 Q1. A number of sectors, including the all-important Technology sector, are on track to produce genuine growth, i.e., 2021 Q1 profitability growth above pre-Covid levels. These include, in addition to Technology (+27% above 2019 Q1 level), Construction (+55.1%), Medical (+27.2%), Basic Materials (+12.8%), Consumer Staples (+10.7%) and Utilities (+9.7%).
The Finance sector is benefiting from easy comparisons to the year-earlier period, but 2021 Q1 earnings are expected to be only -1.3% below the 2019 Q1 level.
Earnings Season Never Ends
The Q1 earnings season will really get going when the big banks come out with their March-quarter results on April 14
th
. But not all companies have fiscal quarters that correspond ‘cleanly’ with the calendar periods.
For example, there are almost two dozen S&P 500 members that have fiscal quarters that ended in February and 12 such companies, including FedEx, Nike, Costco
and others have reported their fiscal February-ending quarterly results already.
We and other data aggregators club the results from these 12 index members as part of our 2021 Q1 tally. We have another 5 S&P 500 members on deck to report fiscal February-quarter results this week, including Micron Technology, Walgreens Boots Alliance, McCormick and others. Lululemon is also reporting this week, though it’s not in the S&P 500 index.
Looked at this way, we will have counted almost two dozen such 2021 Q1 results before JPMorgan reports its quarterly results on April 14
th
.
2021 earnings and revenues are expected to be up +24.3% and +8.2%, respectively, which follows the Covid-driven decline of -13% in 2020.
On an index ‘EPS’ basis, the 2021 expectation works out to $169.35, up from $136.27 per ‘Index share’ in 2020.
These full-year estimates have been going up as well.
We envision this favorable revision trend to accelerate over the next few months as the vaccination effort reaches a critical mass and greater ‘normalcy’ returns to life.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>
Q1 and 2021 Earnings Estimates Keep Going Up
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