We are in the middle of the fourth-quarter 2020 earnings season, which has so far delivered better-than-expected results. Market participants are watching the results closely as the last quarter was a mixed one both in terms of economic data and stock market performance.
Corporate profits in the fourth quarter and their guidance will be thoroughly scrutinized by financial experts and economists to gauge whether the U.S. economy will return to the pre-pandemic level by mid-2021.
Meanwhile, six stocks with a favorable Zacks Rank are set to beat on earnings today after market close. Investment in these stocks should provide good returns to investors going forward.
Better-Than-Expected Fourth-Quarter Earnings Results So Far
As of Feb 3, 223 S&P 500 companies reported their quarterly results. Total earnings of these companies were up 2.5% from the same period last year on 1.5% higher revenues, with 80.3% beating EPS estimates and 78% beating revenue estimates.
Overall, the fourth-quarter earnings for the S&P 500 Index are projected to be up 0.4% year over year on 2% higher revenues. This is in contrast to the projection of a 7.8% decline in earnings on 0.3% higher revenues at the beginning of the reporting cycle.
Notably, first-quarter earnings were down 12.8% year over year on 1.6% higher revenues. Second-quarter earnings plunged 32.2% on 9.3% lower revenues. Third-quarter earnings dropped 7% year over year on 0.7% lower revenues. The fourth-quarter earnings estimates were improving steadily since July 2020. (Read More:
Tech Sector Shows Its Enormous Earnings Power
)
Our Top Picks
We have narrowed down our search to six stocks slated to release earnings results today after the closing bell. Each of these stocks carries either a Zacks Rank # 1 (Strong Buy) or 2 (Buy) and has a positive
Earnings ESP
. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) 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 the 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 our six picks in the last quarter.
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Ford Motor Co.
F
designs, manufactures, markets, and services a range of Ford cars, trucks, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles worldwide. It operates through three segments: Automotive, Mobility, and Ford Credit. The Zacks Rank #1 company has an Earnings ESP of +12.88% for fourth- quarter 2020.
Ford Motor has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 7 days. It has a trailing four-quarter earnings surprise of 27%, on average.
SkyWest Inc.
SKYW
is the holding company for two scheduled passenger airline operations and an aircraft leasing company. Its airline business provides commercial air service in cities throughout North America. The Zacks Rank #1 company has an Earnings ESP of +18.63% for fourth- quarter 2020. SkyWest has an expected earnings growth rate of more than 100% for the current year.
Snap Inc.
SNAP
operates as a camera-application provider in the United States and internationally. It offers Snapchat, a camera application that helps people to communicate through short videos and images called Snaps.
The Zacks Rank #2 company has an Earnings ESP of +6.06% for fourth- quarter 2020. Snap has an expected earnings growth rate of more than 100% for the current year. It has a trailing four-quarter earnings surprise of 34.1%, on average.
Microchip Technology Inc.
MCHP
develops and manufacturers microcontrollers, memory and analog interface products for embedded control systems, which are small, low-power computers designed to perform specific tasks in the Americas, Europe and Asia. The Zacks Rank #2 company has an Earnings ESP of +1.14% for third-quarter fiscal 2021 (ended Dec 31).
Microchip Technology has an expected earnings growth rate of 12.8% for the current year (ending March 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. It has a trailing four-quarter earnings surprise of 7.6%, on average.
Synaptics Inc.
SYNA
is a leader in designing and marketing human interface solutions such as touchpads for notebook computers, capacitive touch screen controllers for handsets and biometric fingerprint sensors for mobile devices. The company currently has a Zacks Rank #2 and an Earnings ESP of +0.42% for second-quarter fiscal 2021 (ended Dec 31).
Synaptics has an expected earnings growth rate of 16.6% for the current year (ending June 2021). The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 30 days. It has a trailing four-quarter earnings surprise of 17.3%, on average.
Skechers U.S.A. Inc.
SKX
designs, develops, markets, and distributes footwear for men, women, and children; and performance footwear for men and women under the Skechers GO brand worldwide. It operates through three segments: Domestic Wholesale Sales, International Wholesale Sales, and Retail Sales. The company has an Earnings ESP of +1.50% for fourth-quarter 2020.
Skechers U.S.A. has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 30 days. It has a trailing four-quarter earnings surprise of 22.1%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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