The Current Earnings Season
The fourth quarter of 2024 has begun, marking the onset of the earnings season, a pivotal period for investors to evaluate the state of the U.S. economy based on corporate performance and projections.
As of January 12, 29 companies on the S&P 500 Index have reported their financial results. Their robust performance reveals a 7.6% increase in total earnings from a year ago and a 6% revenue surge. Impressively, 93.1% of them surpassed EPS estimates, with 55.2% beating revenue expectations.
Forecasts indicate that overall earnings for the S&P 500 Index in the fourth quarter of 2024 are expected to rise by 0.1% with a 2.2% revenue growth. This follows a period of declining earnings over three consecutive quarters prior to the third quarter’s modest upturn.
Top Picks for Investors
Amidst the buzz of the earnings reports, a select group of Dow stocks, commonly referred to as “blue-chip stocks,” are expected to outperform with favorable Zacks Rank. Investing in these stocks is likely to yield prudent results.
Discovering Favorable Blue-Chip Stocks
Our search for top-performing Dow stocks has revealed five candidates poised for a stellar earnings performance. Each stock carries either a Zacks Rank #1 (Strong Buy) or #2 (Buy) and exhibits a positive Earnings ESP. According to our analysis, stocks with a Zacks Rank of #3 or better combined with a positive Earnings ESP have a substantial 70% chance of surpassing earnings estimates. This makes them attractive investment options ahead of their earnings announcements.
The following chart illustrates the price performance of our top five picks in the last quarter.
Image Source: Zacks Investment Research
Stock Analysis
Apple Inc. (AAPL) is experiencing a surge in iPhone demand and expects noteworthy revenue growth across several products in the first quarter of fiscal 2024, despite some market timing challenges. With a Zacks Rank #1 and an Earnings ESP of +3.65%, the company is anticipated to continue its track record of earnings surprises.
The Boeing Co. (BA) retains its stronghold as the largest U.S. aircraft manufacturer, with promising growth in commercial airplane orders. Additionally, a bolstering U.S. defense budget sets a positive stage for BA’s Defense, Space & Security segment. With a Zacks Rank #2 and an Earnings ESP of +0.33%, Boeing is poised for a strong earnings announcement.
The Coca-Cola Co. (KO) continues to demonstrate robust business trends, with its sales and earnings surpassing estimates for three consecutive quarters. Fueled by innovations and digital investments, Coca-Cola anticipates organic revenue growth of 10% for 2023. With a Zacks Rank #2 and an Earnings ESP of +1%, KO is positioned for an impressive earnings release.
The Procter & Gamble Co. (PG) has sustained growth driven by vigorous pricing strategies and operational strength. With a Zacks Rank #2 and an Earnings ESP of +0.48%, Procter & Gamble’s consistent performance is expected to continue with another earnings beat.
Earnings Release
Each of these companies is scheduled to release their earnings as follows:
- Apple Inc. – Feb 1, after the closing bell
- The Boeing Co. – Jan 31, before the opening bell
- The Coca-Cola Co. – Feb 13, before the opening bell
- The Procter & Gamble Co. – Jan 23, before the opening bell
The Travelers Companies Inc.: A Beacon of Resilience in the Insurance Market
Strong Performance Amidst Market Turbulence
Amidst the choppy waters of the insurance market, The Travelers Companies Inc. (TRV) stands out as a stalwart vessel, unyielding to the tides of uncertainty and volatility. The company exudes robust market presence in auto, homeowners’ insurance, and commercial U.S. property-casualty insurance, fortified by solid inorganic growth. A high retention rate, a surge in new business, and favorable renewal premium change all portend a promising trajectory.
Optimism Amid Commercial Stability
TRV’s commercial businesses are expected to flourish, benefitting from market stability. Additionally, the company remains sanguine about the personal line of business, envisioning growth in the auto and homeowners’ insurance sectors. Furthermore, TRV anticipates fixed-income net investment income to reach approximately $615 million after tax for the fourth quarter.
Favorable Projections and Positive Indicators
Notably, Zacks Rank #2 Travelers Companies boasts an Earnings ESP of +1.56% and an expected earnings growth rate of 51.8% for the current year. The Zacks Consensus Estimate for current-year earnings has experienced a 0.6% improvement over the past seven days, underscoring the company’s buoyancy amidst a challenging economic landscape. Investors are on tenterhooks as TRV is slated to unveil its earnings results on Jan 19, before the opening bell.
Travelers Companies, Inc.’s unwavering performance amidst an uncertain market paints a compelling picture for investors who seek stability and resilience in an otherwise unpredictable business environment. As the company charts its course through the choppy waters of the insurance market, investors are keeping a close watch on its upcoming earnings announcement, poised for potential market reverberations.
Source: Zacks Investment Research