Wall Street To See Terrific Q2 Earnings: 5 Top Gainers

Double-digit gains among the biggest Internet stocks on the Wall Street have raised overvaluation concerns, while increased uncertainty over President Trump’s agenda could trigger a market pullback in the second half of this year. An overly aggressive Fed and a further decline in oil prices might lead to a correction of 10% or more this year.

However, over the next few weeks, Wall Street is likely to focus less on such concerns and more on Corporate America, which is certainly poised to be in a healthy shape mostly from an earnings perspective. Consistent earnings growth enthralls almost everyone, right from the top brass to research analysts. This is simply because earnings are a measure of the money a company is making.

This could be an excellent earnings season for the S&P 500, which in turn will boost its operating earnings per share for the trailing 12 months. Improved second-quarter economic growth, strong manufacturing and service surveys, and a moderate uptick in wage growth are expected to help Corporate America post relatively high profit margins in Q2.

Earnings growth is expected to be led by energy, financials and information technology. Hence, let us keep an eye on stocks that are likely to make the most of the second-quarter earnings season. Here, we should also bear in mind that better-than-expected earnings performances generally lead to a rally in the share price.

Q2 Earnings Season Takes the Spotlight

According to estimates, total second-quarter earnings for the S&P 500 cohort are expected to be up 5.8% from same period last year on 4.5% higher revenues. This would follow earnings growth of 13.3% in Q1 on 7% revenue growth, the highest in at least two years. Sam Stovall, chief investment strategist at CFRA Research, further added that history shows the final tally will be better in Q2 “as actual EPS exceeded initial estimates in each of the last 21 quarters and have done so by an average of 3.6 percentage points.”

If we move beyond Q2, total earnings for the S&P 500 cohort are anticipated to increase 6.3% on 4.5% higher revenues in Q3 and gain by 9.8% on 5.3% higher revenues in Q4. For the entire year, total earnings for the index are expected to be up 7.4% on 4.2% higher revenues. This will be way more than 1.1% earnings growth on 2.1% higher revenues recorded last year (read more: VGM score of ‘A’ or ‘B’. Here ‘V’ stands for Value, ‘G’ for Growth and ‘M’ for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.

Baker Hughes, a GE company (NYSE:BHGE) is engaged in the oilfield and process industries. The company conducts certain of its operations through joint ventures, partnerships or alliances. It has a Zacks Rank #2 and a VGM score of ‘B’. The company, with an Earnings ESP of +9.09%, is expected to report earnings results for the quarter ending June on Jul 28.

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Baker Hughes Incorporated Price and EPS Surprise

Baker Hughes Incorporated Quote

Artisan Partners Asset Management Inc (NYSE:APAM) is an investment management company. The company provides investment management services to separate accounts, mutual funds and other pooled investment vehicles. It has a Zacks Rank #1 and a VGM score of ‘A’. The company, with an Earnings ESP of +3.45%, is expected to report earnings for the quarter ending June on Jul 24.