Stocks

12 Stocks That Could Be Winners in a Tough Earnings Season

Earnings season is starting, and it isn’t supposed to be a good one. But some stocks can still come out winners. We offer 12 stocks that could outperform.

Earnings season is starting, and it isn’t supposed to be a good one. But some stocks can still be winners.

Earnings season is starting, and it isn’t supposed to be a good one. But some stocks can still come out winners.

BTIG strategist Julian Emanuel notes that S&P 500 companies are expected to report a drop in their earnings-per-share of a about 4%. But these companies also tend to beat earnings forecasts, and if that continues at its historical rate, earnings growth would be down just around 1%, Emanuel explains. That isn’t too bad, all else being equal.

And remember, the stock market is a market of individual stocks. There will be winners and losers, and Emanuel expects the winners to outperform. “Despite the prospects for a small EPS recession this quarter, we look for good news to be rewarded as good news.”

To gauge which stocks might come out ahead this earnings season, Emanuel screened for what he calls “positivity performers”—companies that are expected to produce year-over-year third-quarter earnings growth, and have beaten both revenue and EPS forecasts over the last eight quarters. Twelve companies met those criteria, including Cisco Systems (CSCO), Mastercard (MA), United Technologies (UTX), and Salesforce.com (CRM).

Here is Emanuel’s full list of possible earnings winners:

Emanuel also has a list of 12 stocks that could be earnings-season losers.

Write to Ben Levisohn at Ben.Levisohn@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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