- The curtain rises on Wall Street’s Q3 earnings season today.
- Forecasts predict a 4.2% increase in annualized profit and a 4.7% bump in revenue growth.
- Utilizing the InvestingPro stock screener, I scoured for firms poised to deliver robust double-digit earnings and sales growth amid evolving market conditions.
The Q3 earnings extravaganza commences today as heavyweight banks like JPMorgan Chase, Wells Fargo, and BlackRock take center stage.
Following in the limelight are prominent entities like Taiwan Semiconductor, Netflix, ASML, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, American Express, UnitedHealth, Johnson & Johnson, Procter & Gamble, and United Airlines, slated to unveil their financial performances.
Source: Investing.com
As the month wanes, the tech titans, including Tesla, Microsoft, Alphabet, Amazon, Meta Platforms, and Apple, are set to disclose their quarterly progress, captivating investor attention.
Market observers keenly await these financial reports to discern how firms have navigated the turbulent economic landscape fraught with volatility, soaring interest rates, and ongoing geopolitical uncertainties.
Per FactSet, Q3 earnings per share are anticipated to ascend by 4.2% from the corresponding period last year. Estimates have tempered from a robust 7.8% projected growth at the quarter’s onset.
Source: FactSet
Industry Sectors in the Limelight
The tech arena is poised for a robust showing, with the Information Technology sector forecasted to lead the pack with an impressive +15.2% annualized earnings growth. This sector houses renowned entities like Alphabet, Meta Platforms, Netflix, Walt Disney, Verizon, and AT&T.
In the Health Care domain, a solid +10.9% year-over-year EPS surge is anticipated. Key players such as Eli Lilly, Merck, Unitedhealth Group, Johnson & Johnson, AbbVie, Amgen, Pfizer, and Moderna are primed for action.
Moving on to Communication Services, a hefty +10.5% year-over-year earnings expansion is envisioned. This sector is home to AI stalwarts like Microsoft, Nvidia, Broadcom, Oracle, Salesforce, Advanced Micro Devices, and Super Micro Computer.
Conversely, the Energy sector faces a bleak scenario, with a dismal -20.9% predicted decline in earnings compared to the prior year, marking the steepest drop across all sectors.
Meanwhile, the Materials sector is set for the second-largest year-over-year EPS dip of -2.7%. This sector encompasses entities in metals and mining, chemicals, construction materials, and containers and packaging.
Revenue expectations have also seen a downtrend during the quarter. The S&P 500 is set to witness a +4.7% annualized sales boost, a slight revision from the +5.0% forecast on June 30.
Source: FactSet
The horizons look promising as ten sectors are expected to witness year-over-year revenue growth, spearheaded by Information Technology and Communication Services with a robust +11.8% and +8.0% surge, respectively.
In stark contrast, the Energy sector anticipates a -2.9% revenue decline compared to the previous year.
Stocks to Monitor Amid Q3 Earnings Frenzy
The Q3 earnings quarter unfolds before us, offering a pivotal juncture that could sculpt market trajectories for the remainder of the year.
Against a backdrop laced with concerns surrounding economic deceleration and resurging inflation anxieties, I leveraged the InvestingPro Stock Screener to isolate companies poised for a blistering growth rate of 25% or beyond in both earnings and revenue as the Q3 earnings fiesta kicks off.
A mere 24 stocks graced my screening slate.
Source: InvestingPro
The InvestingPro stock screener stands as a robust asset empowering investors to unearth top-notch stocks demonstrating resilience and growth potential amidst today’s intricate macroeconomic milieu.
Among the standout tech luminaries are Coinbase (+1,479.7% EPS Growth), CrowdStrike (+907% EPS Growth), AppLovin (+523.7% EPS Growth), Western Digital (+411% EPS Growth), Trade Desk (+357.8% EPS Growth), Robinhood (+266.5% EPS Growth), Cloudflare (+234.3% EPS Growth), Nvidia (+139.5% EPS Growth), Snowflake (+124.4% EPS Growth), and Broadcom (+53.1% EPS Growth).
Source: InvestingPro
Additionally, keep an eye out for Blackstone (+319.1% EPS Growth), Newmont (+203.4% EPS Growth), Eli Lilly (+183% EPS Growth), Axon Enterprise (+112.1% EPS Growth), First Solar (+75% EPS Growth), and HEICO (+46.6% EPS Growth) as they are poised to deliver substantial Q3 earnings and revenue upswings.
Stay tuned to InvestingPro for real-time market insights and the implications for your trading endeavors.
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Disclosure: I maintain long positions in the S&P 500, SPDR® S&P 500 ETF, Invesco QQQ Trust ETF, and Technology Select Sector SPDR ETF. I regularly adjust my stock and ETF holdings based on risk assessments of both macroeconomic conditions and company financials.
The opinions expressed in this article are solely the author’s and not intended as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more insights into stock market dynamics.