Equities

Goldman, Netflix Set to Report; High Beat Rates Noted

Nine stocks with a history of beating earnings estimates set to report next week, including Ally Financial and D.R. Horton.

By Bill Bullington

7/11, 11:20 EDT
Ally Financial Inc.
Ameriprise Financial, Inc.
Cboe Global Markets, Inc.
D.R. Horton, Inc.
Goldman Sachs Group, Inc.
Intuitive Surgical, Inc.
Netflix, Inc.
United Airlines Holdings, Inc.
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Key Takeaway

  • Major companies like Goldman Sachs, United Airlines, and Netflix are set to report earnings next week, with investor focus on consumer behavior and economic conditions.
  • Stocks with a strong history of beating estimates include Ally Financial (78% beat rate), D.R. Horton (76%), and Intuitive Surgical (88%).
  • CBOE Global Markets and Ameriprise Financial have consistently surpassed earnings expectations, indicating bullish sentiment for their upcoming reports.

Earnings Season Overview

As earnings season ramps up, investors are closely monitoring early reports from companies with a history of beating expectations. Major names such as Goldman Sachs, United Airlines, and Netflix are set to report next week, and their performance will be scrutinized against Wall Street forecasts. Additionally, investors will be keen to hear any commentary on consumer behavior and economic conditions.

Bespoke Investment Group has identified nine stocks that have consistently beaten earnings estimates and typically see a post-earnings rally. These stocks include Ally Financial, Citizens Financial, Western Alliance, Brinks, D.R. Horton, Manpower, Snap-On, WNS, and Intuitive Surgical. Each of these companies has a strong track record of surpassing earnings expectations and delivering positive returns on earnings day.

Key Stocks to Watch

Ally Financial

Ally Financial, which reports on July 17, has a 78% rate of beating earnings expectations and typically gains 1.2% on earnings day. Evercore ISI analyst John Pancari highlighted Ally as a top pick for the second quarter, citing potential for improved investor confidence in the company's guidance and medium-term outlook. Ally's stock has risen over 18% this year, outperforming the broader market. Analysts surveyed by LSEG have a buy rating on the stock, with an expected upside of more than 4% over the next year.

D.R. Horton

Homebuilder D.R. Horton, set to report on July 18, has a 76% beat rate and an average post-earnings return of 1.5%. JPMorgan analyst Michael Rehaut expects D.R. Horton to outperform its peers this earnings season, despite recent negative sentiment. The stock has declined slightly more than 8% this year, but analysts believe it has the potential to rebound by more than 18%.

Intuitive Surgical

Intuitive Surgical, also reporting on July 18, boasts an 88% beat rate and an average rally of 2.4% on earnings day. Goldman Sachs analyst David Roman named Intuitive Surgical as a top medical technology pick for the earnings season, citing room for positive earnings revisions. The stock has climbed over 31% in 2024, although analysts predict a potential correction of more than 2% in the coming year.

Positive Earnings Trends

CBOE Global Markets

CBOE Global Markets has a solid history of beating earnings estimates, with an average surprise of 3.69% over the last two quarters. The company reported earnings of $2.15 per share in the most recent quarter, surpassing the Zacks Consensus Estimate of $2.04 per share. For the previous quarter, CBOE also exceeded expectations with earnings of $2.06 per share. The stock currently has a Zacks Earnings ESP of +4.37%, indicating bullish sentiment among analysts for its near-term earnings potential.

Ameriprise Financial

Ameriprise Financial, part of the Zacks Financial - Investment Management industry, has consistently topped earnings estimates. The company reported earnings of $8.39 per share in the most recent quarter, beating the consensus estimate of $8.10 per share. For the previous quarter, Ameriprise also exceeded expectations with earnings of $7.75 per share. The stock has a positive Earnings ESP of +0.10%, suggesting analysts are optimistic about its upcoming earnings report.

Street Views

  • John Pancari, Evercore ISI (Bullish on Ally Financial):

    "We believe investor confidence in ALLY’s guidance and medium term fundamental outlook/returns should improve with 2Q24 results – thereby supporting upside to the stock’s discount valuation."

  • Michael Rehaut, JPMorgan (Bullish on D.R. Horton):

    "We expect DHI to outperform its peers this earnings season, as we believe the buyside has focused more negatively recently on the company compared to its peers."

  • David Roman, Goldman Sachs (Bullish on Intuitive Surgical):

    "Intuitive Surgical... room for positive earnings revision as a reason for that optimism."