Companies like Walmart and Apple could be among the most reliable plays during earnings season, according to Wolfe Research. The third-quarter earnings season is kicking off this week, with major consumer and financial names set to post their latest financial reports. Analysts lowered their EPS estimates in aggregate by a larger margin compared to recent averages during the third quarter, but S & P 500 earnings year-over-year are still estimated to grow 4.
2% during the period — which would mark the fifth straight quarter of year-over-year earnings growth for the broader market. Against this backdrop — and with inflation still being a key risk for stocks — according to the firm, chief investment strategist Chris Senyek searched for stocks that have performed well when releasing quarterly financial reports. The firm screened the S & P 500 for companies that have beat on the top- and bottom-lines with positive relative price action around their earnings reports over the past two quarters.
Take a look at some of the stocks below that fit this criteria: Walmart is a strong earnings play and also a Wolfe favorite, as the stock recently made the firm's October "Alpha list" with an outperform rating. "We think WMT can benefit in either a worsened or improved macro environment, either via further share gains or improved consumer spending on discretionary products," Wolfe analyst Greg Badishkanian wrote in an Oct. 1 note.
"We also see a longer-term opportunity for margin expansio.
