Shares of some companies reporting quarterly results next week, including Amazon and T-Mobile , could get a post-earnings bump. These names could be a bright spot in the broader market after a rough week. Disappointing reports from a couple megacap tech names earlier this week dragged down sentiment, leading the S & P 500 and Nasdaq Composite to their biggest one-day loss in more than a year.
Still, the earnings season had started off on a positive note. As of July 19, the blended second-quarter earnings growth rate for the S & P 500 was 9.7%, which is higher than the 8.
9% expected at the end of the quarter and would mark the index's highest year-over-year earnings growth rate since the fourth quarter of 2021 if trend persists, according to FactSet. CNBC Pro screened FactSet for companies in the broad-market index that are reporting quarterly results next week and could see potential upside. These companies could also see a post-earnings boost in their stock prices based on their historical patterns.
The names we found meet the following criteria: Earnings per share estimates are up 10% or more in the past three and six months Have buy ratings from at least 55% of analysts covering the stock Have an upside to analysts' average price target of 15% or more Take a look at the full list below: Analysts have lifted their earnings estimates on Amazon by a whopping 190% and 397% in the past three and six months, respectively. The consensus price target on the e-commerce giant suggests about 31% potential upside over the next year, and 82% of analysts covering the stock have a buy rating on shares, making it the most favored stock of the lot. The company is expected to post its financial report on Thursday after the market close.
BMO Capital Markets analyst Brian J. Pitz reiterated his outperform rating on Amazon and called it a "top pick" in a Wednesday note. He also raised his target price by $10 to $230, implying shares could gain nearly 28% from Thursday's close.
Shares of the megacap tech name have gained more than 18% year to date. "We raise our 2Q24 AWS growth rates to a Street high of 19%, or $26.3B, following Google Cloud's growth acceleration — AWS is on a path for durable revenue growth through at least 2025E," the analyst said.
Telecommunications giant T-Mobile could also see a post-earnings bump. The analyst consensus price target on FactSet suggests shares could rise 11% over the next year, adding to the stock's 9% gain so far this year. Analysts have revised their earnings estimates upwards by 35% and 50%, respectively, in the past three and six months, and many have stuck by their bullish view of the stock ahead of earnings, which are due out before the market's open on Wednesday.
Citi recently maintained its buy rating for T-Mobile and lifted its target price for the stock from $184 to $210, suggesting 20% potential upside from Thursday's close. "We still see a stabilizing wireless competitive environment, with solid postpaid phone growth and positive pricing actions," analyst Michael Rollins wrote in a July 18 note. He expects T-Mobile will report "solid" second-quarter results with year-over-year wireless service revenue growth of 3.
8%, which is higher than the consensus prediction of 3.6%. Power management company Eaton , now regarded as an artificial intelligence-tied data center play , is also on the earnings docket next week.
Analysts polled by FactSet have revised their earnings estimates higher by 24% and 47%, respectively, in the past three and six months. That suggests there's increasing optimism ahead of the company's financial report on Thursday morning. Eaton's shares are up roughly 22 % this year, and the consensus price target suggests the stock could still rally 18% over the next year, according to FactSet.
Other favored stocks that could see a post-earnings bump next week include Mastercard , MGM Resorts International and S & P Global ..
