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These companies reporting next week have a history of beating earnings estimates

Chaim Potok by Chaim Potok
July 14, 2023
in Investing
These companies reporting next week have a history of beating earnings estimates
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The new corporate earnings season revs up next week, and some stocks could do well on the back of their reports. A broad swath of companies is set to report, from banks including Bank of America , Morgan Stanley and Goldman Sachs to technology-related names such as Tesla and Netflix and airlines United and American . Investors will look for clues on how companies have fared in this higher interest rate environment, if they’ve changed their guidance for future performance and for commentary around the strength of the consumer. Any names that beat analyst estimates for the quarter or raise their outlooks could see their shares take a leg up as a result, though it’s far from a perfect science. And those that underperform compared with expectations could be at risk of a selloff. Looking ahead, CNBC Pro screened for stocks with reports due next week to see which ones have a history of outperforming Wall Street expectations. The stocks on this list have beat analyst expectations for earnings at least 70% of the time and typically gain at least 1% following their earnings report, according to data from Bespoke Investment Group. Here’s the nine stocks that made the cut: Western Alliance Investors will watch Western Alliance Bancorp on Tuesday after the bell to see how the business has performed coming out of the banking industry crisis that began in March. The regional bank has beat earnings expectations in 70% of its past reports and typically advances 1.7% on the back of a report. A post-earnings bounce would offer a welcomed reprieve for the stock, which is down more than 30% year to date. It has performed worse than the SPDR S & P Regional Banking ETF (KRE) . Wells Fargo analyst Jared Shaw said late last month that Western Alliance had the best risk-reward skew of regional banks heading into the earnings season. “WAL continues to be the name we get the greatest amount of funding questions going into the quarter,” he said. “We are encouraged that the broader macro backdrop has improved in recent months, evidenced by the fact that management is no longer having to provide weekly deposit updates.” Blackstone Investment firm Blackstone also made the list, with the company beating expectations 70% and 79% of the time for earnings and revenue, respectively. The company reports Thursday before the bell. The stock typically gains 1.2% after its quarterly report. That would help shares take another leg up after already rising more than 40% this year. D.R. Horton D.R. Horton , which is also set to report Thursday, has beat earnings expectations 76% of the time and sales forecasts 70%. The homebuilder’s stock advances 1.7% following its earnings on average. Despite pressure over the course of the year as investors questioned the outlook for homebuilders in an economy with higher interest rates, shares are up more than 40% this year. They also traded at an all-time high Friday. Earlier this month, the company announced it completed its acquisition of Truland Homes’ homebuilding operations for around $100 million in cash. Intuitive Surgical Intuitive Surgical has the best average post-earnings performance of the crop, historically finishing 2.6% higher. The company, which reports Thursday after the bell, has beat earnings and sales expectations 87% and 83% of the time, respectively. The stock is up more than 30% this year and notched new highs not seen since early 2022 in Friday’s session. — CNBC’s Michael Bloom and Fred Imbert contributed to this report.



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