5 Stocks From the Favorite Sectors of This Earnings Season

Core Insights - The fourth-quarter 2023 earnings season is beginning, with a general deceleration in earnings outlook and negative revisions across several sectors [1][2] - Despite the overall decline, certain stocks are highlighted as having a high chance of surprising positively during the earnings season, including Meta Platforms, Deckers Outdoor, Netflix, Atmos Energy, and CME Group [1] Earnings Trends - Total S&P 500 earnings are projected to decrease by 0.2% year-over-year, despite a 2.3% increase in revenues [2] - This follows a 3.8% earnings growth in Q3 2023, with estimates dropping from an initial projection of 5.5% growth in early October [2] - Eight out of 16 Zacks sectors are expected to show earnings growth, with Technology leading at 18.8% growth [2] Stock Selection Methodology - Stocks with a positive Earnings ESP and a favorable Zacks Rank (1, 2, or 3) are likely to outperform, with a historical earnings surprise rate of 70% [3][4] - The methodology focuses on recent analyst revisions to capture potential earnings surprises [3] Company Highlights Meta Platforms - Meta has an Earnings ESP of +4.58% and a Zacks Rank of 2, with a consensus estimate of $4.79, indicating a growth of 59.7% [5] - The company has delivered an average earnings surprise of 27.50% over the last four quarters and is set to report on February 7 [5] Deckers Outdoor - Deckers has an Earnings ESP of +4.88% and a Zacks Rank of 2, with a positive earnings estimate revision of 19 cents, indicating a growth of 5.4% [6][7] - The company has an average earnings surprise of 26.32% in the past four quarters and will report earnings on February 1 [7] Netflix - Netflix has an Earnings ESP of +5.75% and a Zacks Rank of 2, with a recent positive earnings estimate revision of one cent, indicating an expected growth rate of over 1700% [8] - The company has delivered a negative earnings surprise of 12.16% on average over the last four quarters and is scheduled to report on January 23 [8] Atmos Energy - Atmos Energy has an Earnings ESP of +1.98% and a Zacks Rank of 2, with an upward earnings estimate revision of 4 cents, indicating a growth rate of 9.95% [9] - The company has an average earnings surprise of 1.10% over the last four quarters and will report earnings on February 6 [9] CME Group - CME Group has an Earnings ESP of +4.49% and a Zacks Rank of 2, with a positive earnings estimate revision of 3 cents, indicating a growth rate of 14.58% [10] - The company has delivered an average earnings surprise of 2.73% over the last four quarters and is set to report on February 14 [10]