As the first-quarter (Q1) earnings season shifts into high gear next week, investors are bracing for a wave of data from nearly 6% of the benchmark S&P 500 index.
While heavy hitters like Netflix Inc and JPMorgan dominate the headlines, seasoned traders are looking at a specific subset of companies: those with a “beat and raise” pedigree.
According to data from Bespoke Investment Group, a handful of firms consistently outpace Wall Street’s estimates and see their share prices climb immediately following their reports.
Here are three stocks with high historical beat rates that are scheduled to report earnings next week.
Morgan Stanley (NYSE: MS)
Morgan Stanley is set to report its Q1 earnings before the opening bell next Wednesday, April 15.
The investment banking giant enters the arena with a formidable track record, having surpassed analyst earnings per share (EPS) estimates in 80% of its recent reports.
Historically, the stock responds to these beats with an average first-day gain of 1.03%.
For Q1, analysts’ expectations stand at an EPS of $2.95 on $19.23 billion in revenue, which would represent a double-digit increase from the prior year.
Despite MS shares being down nearly 3% this year, UBS analyst Erika Najarian recently upgraded them to “buy”. According to her, Morgan Stanley is a “quality” stock that could hit $196 by year-end.
Citizens Financial (NYSE: CFG)
Reporting on Thursday, April 16, Citizens Financial is another banking play that has turned heads on Wall Street.
Like Morgan Stanley, it boasts an 80% beat rate – but its post-earnings performance is even more robust, averaging a 1.49% jump on reporting day.
This quarter, consensus estimates call for $1.10 per share, a staggering 42.9% year-over-year jump, on $2.17 billion in revenue.
Goldman Sachs recently added CFG stock to its “Conviction Buy” list, with analyst Ryan Nash highlighting its “best-in-class return improvement story”.
Citizens has already enjoyed a strong run, climbing 8% year-to-date, with Goldman projecting an additional 19% upside toward a $76 price target.
Snap-On Inc (NYSE: SNA)
Industrial powerhouse Snap-On rounds out the list, scheduled to report on Thursday, April 16.
Among this trio, SNA holds the highest historical EPS beat rate at an exciting 89%, and investors typically reward this consistency; the stock averages a 1.51% gain the day it reports.
While the broader industrial sector has faced headwinds, the NYSE-listed firm’s “Repair Systems and Information Group” has shown resilience with organic sales growth.
Analysts are keeping a close eye on whether Snap-On can maintain its margins amidst fluctuating capital allocation efficiency.
With its reputation for reliable execution, SNA shares remain “favorite” for those seeking stability and a high probability of an earnings-day surprise, with Wall Street price targets going as high as $445.
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