We are in the initial stage of the third-quarter 2024 earnings season. So far, the results have come in line with expectations. Market participants are closely monitoring the third-quarter results to draw conclusions on the health of the U.S. economy.
Several U.S. corporate behemoths will report next week. The major concentration of market participants’ will be on six of the “Magnificent 7” stocks that will report their quarterly financial numbers. Apart from this next-generation investors’ darling of Wall Street, a handful of big old economy stocks will also report earnings results next week.
Investment in these old economy stocks that are set to beat on earnings with a favorable Zacks Rank are expected to see their stock prices moving northward in the near term. Five such stocks are — Parker-Hannifin Corp. PH, Curtiss-Wright Corp. CW, Ingersoll Rand Inc. IR, Leidos Holdings Inc. LDOS and Mastercard Inc. MA.
As of Oct. 23, 120 companies of the broad-market index — the S&P 500 — have reported their quarterly financial numbers. Total earnings of these companies are up 1.9% year over year on 4.2% higher revenues, with 79.2% beating earnings per share (EPS) estimates and 63.3% beating revenue estimates.
Looking at the third quarter as a whole, total earnings for the S&P 500 Index are expected to be up 3% from the same period last year on 4.9% higher revenues. This follows 10.2% year-over-year EPS growth on 5.5% higher revenues in the previous quarter.
We have narrowed our search to five large-cap old economy stocks set to report earnings results this month. Each of these stocks carries a Zacks Rank #2 (Buy) and has 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 (Hold) or better (Rank #1 or 2) and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their 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 our five picks in the past three months.
Parker-Hannifin is benefiting from steady demand in the commercial and military end markets across both OEM and aftermarket channels. Synergies from the Meggitt buyout are clearly helping PH. The Win strategy is driving its margins and allowing it to continue returning value to shareholders. PH’s Aerospace Systems segment is benefiting from strong momentum in commercial and military end markets across both OEM and aftermarket channels.
In the quarters ahead, the Aerospace Systems segment is poised to gain from strong demand for its products and aftermarket support services in the general aviation market, driven by growth in air transport activities. Strength in PH’s defense end market, owing to stable U.S. and international defense spending volumes, is also likely to be beneficial. PH expects the Aerospace Systems segment’s organic sales to increase 7-10% from the year-ago level in fiscal 2025. PH has an Earnings ESP of +0.83%. The company will report on Oct 31, before the opening bell.
For first-quarter fiscal 2025, the Zacks Consensus Estimate currently shows revenues of $4.91 billion, suggesting an improvement of 1.2% year over year and earnings per share of $6.13, indicating an increase of 2.9% year over year. The company delivered positive earnings surprises in the last four reported quarters with the average beat being 11.2%.
Moreover, Parker-Hannifin has witnessed positive earnings estimate revisions for 2024 in the last 30 days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 3.5% and 4.9%, respectively, for revenues and EPS in fiscal 2025 (ending June 2025). The current Zacks Consensus Estimate for fiscal 2026 revenues and EPS reflects an upside of 5.6% and 10.2%, respectively.
Curtiss-Wright’s long-term growth opportunities in the global nuclear market remain solid. CW acquired Ultra Energy in June 2024 to further boost its footprint in the nuclear market. Looking ahead, CW expects to witness high-single-digit growth for its commercial nuclear market in 2024.
Increasing demand for submarine programs, backed by funding from the U.S. administration is also benefiting CW, which holds a strong solvency position. CW has an Earnings ESP of +0.54%. The company will report on Oct 30, after the closing bell.
For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $756 million, suggesting an improvement of 4.4% year over year and earnings per share of $2.70, indicating an increase of 6.3% year over year. The company pulled off positive earnings surprises in the last four reported quarters with the average beat being 11.5%.
Moreover, Curtiss-Wright has witnessed positive earnings estimate revisions for 2024 in the last 30 days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 7.1% and 12.7%, respectively, for revenues and EPS in 2024. The current Zacks Consensus Estimate for 2025 revenues and EPS reflects an upside of 5.1% and 7.6%, respectively.
Ingersoll Rand is set to gain from a healthy demand environment and innovation capabilities. Higher orders for industrial vacuums and blowers are driving the growth of IR’s Industrial Technologies & Services unit. Growth in short-cycle orders is aiding IR’s Precision and Science Technologies segment. Benefits from acquired assets are driving the segment’s performance.
Ingersoll Rand has been making continued investments to support growth in demand generation and the Industrial IoT. The company has been investing in IR digital and other IT-related platforms. IR’s solid product portfolio, innovation capabilities and focus on boosting aftermarket businesses are the other tailwinds. IR has an Earnings ESP of +1.22%. The company will report on Oct 31, after the closing bell.
For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $1.88 billion, suggesting an improvement of 7.9% year over year and earnings per share of $0.82, indicating an increase of 6.5% year over year. The company delivered positive earnings surprises in the last four reported quarters with the average beat being 11%.
Moreover, Ingersoll Rand has witnessed positive earnings estimate revisions for 2024 in the last 30 days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 7% and 12.5%, respectively, for revenues and EPS in 2024. The current Zacks Consensus Estimate for 2025 revenues and EPS reflects an upside of 7.2% and 7.9%, respectively.
Leidos Holdings’ cost-effective defense solutions continue to witness increased contract wins from the Pentagon and other U.S. allies, which led to a solid backlog of $36.49 billion at the end of June 2024. Such a solid backlog bolsters LDOS’ revenue growth prospects. An impressive U.S. defense budget is another major growth driver for LDOS.
The macroeconomic environment in the nation has been boosting the growth prospects of LDOS, given the widespread geopolitical uncertainty along with the U.S. administration’s inclination toward increased defense spending. Such encouraging spending provisions by the U.S. administration are expected to significantly boost the growth prospects of defense primes. LDOS has an Earnings ESP of +2.78%. The company will report on Oct 29, before the opening bell.
For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $4.04 million, suggesting an improvement of 3.2% year over year and earnings per share of $1.96, indicating a decrease of 3.5% year over year. The company delivered positive earnings surprises in the last four reported quarters with the average beat being 23.5%.
Moreover, Leidos Holdings has witnessed positive earnings estimate revisions for 2024 in the last 30 days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 5.4% and 22.7%, respectively, for revenues and EPS in 2024. The current Zacks Consensus Estimate for 2025 revenues and EPS reflects an upside of 4.3% and 5.2%, respectively.
Mastercard has benefited from numerous acquisitions, which helped it to grow addressable markets and drive new revenue streams. The accelerated adoption of digital and contactless solutions is providing an opportunity for MA’s business to expedite its shift to the digital mode.
MA has shown consistent revenue growth of 18% in 2022, 12.9% in 2023, and 10.7% in the first half of 2024 on the back of increased consumer spending, card usage and cross-border transactions. MA’s strong market position, new deals and expanding services support sustained growth. Strong cash flow supports Mastercard’s growth initiatives and enables shareholder value-boosting efforts through share repurchases and dividends. MA has an Earnings ESP of +0.94%. The company will report on Oct. 31, before the opening bell.
For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $7.25 billion, suggesting an improvement of 11% year over year and EPS of $3.73, indicating an increase of 10% year over year. The company pulled off positive earnings surprises in the last four reported quarters with the average beat being 3.5%.
Moreover, Mastercard has witnessed positive earnings estimate revisions for 2024 in the last seven days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 11.3% and 16.8%, respectively, for revenues and EPS in 2024. The current Zacks Consensus Estimate for 2025 revenues and EPS reflects an upside of 12.2% and 16%, respectively.
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Mastercard Incorporated (MA) : Free Stock Analysis Report
Parker-Hannifin Corporation (PH) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
Curtiss-Wright Corporation (CW) : Free Stock Analysis Report
Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
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