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5 Stocks Poised to Beat on Q1 Earnings Amid Coronavirus Woes

The first-quarter 2020 earnings season has kicked off this week. Corporate earnings are expected to suffer significantly on account of the coronavirus outbreak that spread like wildfire across the United States and the world in the second half of the first quarter.

Wall Street completed a fabulous 2019 wherein all three major stock indexes witnessed the best yearly performance in six years. The U.S. stock markets commenced 2020 from where it left off last year. However, the situation took a drastic turn once the coronavirus, which was first detected in China, started spreading across the world.

First Quarter at a Glance

Both U.S. corporate and investors are almost completely in the dark regarding global economic outlook and future business prospects. This can primarily be attributed to the government imposed full or partial lockdown across the world in a bid to curb the spread of the coronavirus.

As a result of the lockdowns, economic activities across the world have come to a standstill. The 11-year long historic bull run of Wall Street came to end on early March with all three major stock indexes entering the bear market territory. In fact, several corporate giants warned about stiff business decline and withdrew the rosy outlook for 2020 issued previously.

Several disappointing economic data revealed the tough conditions. Unemployment soared to 10 million in March. Retail sales in March plunged by 8.7%, marking its highest monthly decline. Industrial production slipped 5.4%, the largest decline since 1946 and manufacturing sector was down 6.3%. ISM Manufacturing index contracted and services index witnessed a sharp decline.

As of Apr 15, 35 S&P 500 members reported first-quarter 2020 earnings results. Total earnings of these companies are down 35% from the same period last year on 3.2% higher revenues. Of the total, 68.6% surpassed EPS estimates and an equivalent proportion outpaced revenue estimates. Overall, first-quarter  earnings for the S&P 500 Index were projected to be down 13.9% year over year on 1.2% higher revenues. (Read More: Shaky Start to Q1 Earnings Season)

5 Large-Cap Stocks Expected to Beat Q1 Earnings

Despite coronavirus-induced economic disaster and stock market turmoil, five large-cap (market capital >$20 billion) stocks are poised to beat first-quarter earnings estimates this month. All these stocks has a Zacks Rank #3 (Hold) and a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are expected to soar after earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The chart below shows the price performance of five stocks in the first-quarter 2020.

 

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Lockheed Martin Corp. LMT is a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. It operates through four segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space Systems.

Lockheed Martin has an Earnings ESP of +1.30%. It has an expected earnings growth rate of 9.9% for the current year. It has a trailing four-quarter positive earnings surprise of 15.9%, on average. The company is set to release earnings results on Apr 21, before the opening bell.

The Travelers Companies Inc. TRV provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United states and internationally. It operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance.

The Travelers Companies has an Earnings ESP of +3.58%. It has an expected earnings growth rate of 5.2% for the current year. The company is set to release earnings results on Apr 21, before the opening bell.

Sempra Energy SRE operates as an energy-services holding company in the United States and internationally. Its San Diego Gas & Electric Company segment generates, transmits, and distributes electricity; and supplies natural gas.

Sempra Energy has an Earnings ESP of +15.49%. It has an expected earnings growth rate of 4.7% for the current year. The company's trailing four-quarter positive earnings surprise is 6.3%, on average. It is set to release earnings results on Apr 22, after the closing bell.

Centene Corp. CNC operates as a multi-national healthcare enterprise that provides programs and services to under-insured and uninsured individuals in the United States. It is a well-diversified, multi-national healthcare company that primarily provides a set of services to the government sponsored healthcare programs.

Centene has an Earnings ESP of +13.12%. It has an expected earnings growth rate of 7.9% for the current year. It has a trailing four-quarter positive earnings surprise of 3.3%, on average. The company is set to release earnings results on Apr 28, before the opening bell.

Sirius XM Holdings Inc. SIRI creates and broadcasts a variety of content such as commercial-free music, premier sports and live events, news and comedy and exclusive talk and entertainment shows.

Sirius XM has an Earnings ESP of +10%. It has an expected earnings growth rate of 15% for the current year. The company is set to release earnings results on Apr 28, before the opening bell.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Sempra Energy (SRE) : Free Stock Analysis Report
 
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
 
Sirius XM Holdings Inc. (SIRI) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Centene Corporation (CNC) : Free Stock Analysis Report
 
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