In a recent report, analysts as Goldman Sachs gave their outlook for Q1 earnings season. The report included an overview of what investors can expect and listed Goldman’s top 25 trading ideas.
“Better Than Feared” Rally?
Analysts believe that stocks could benefit from extremely low expectations for Q1 earnings.
The earnings environment in Q1 was far from ideal for much of the market, as a strong U.S. dollar weighed on exporters, low oil prices hurt much of the energy sector and historically low interest rates continue to make things difficult for financials.
Q2 Recovery
Analysts are predicting that the sluggish Q1 has laid the groundwork for a bounce-back Q2. They believe that higher consumer confidence, lower earnings expectations and a sales recovery following the harsh winter could contribute positively to Q2 numbers.
In addition, lower volatility in oil and forex could reduce unpredictability and worry.
Top Earnings Plays
Goldman analysts see the most Q1 earnings upside for the following stocks:
- Mead Johnson Nutrition Co MJN 1.54%
- The TJX Companies Inc TJX 0.57%
- Wyndham Worldwide Corp (NYSE: WYN)
- Pioneer Natural Resources Co PXD 0.3%
- Valero Energy Corp VLO 3.8%
- Ameriprise Financial Inc AMP 1.69%
- Lazard Ltd LAZ 0.72%
- HCA Holdings Inc HCA 1.06%
- Hologic Inc HOLX 0.38%
- Laboratory Corp. of America Holdings LH 0.71%
- Barrick Gold Corp ABX 2.52%
- Apple Inc. AAPL 0.2%
- Amazon.com Inc AMZN 0.08%
- Demandware Inc DWRE 2.23%
- Infinera Corp INFN 0.65%
- Juniper Networks Inc JNPR 0.72%
- LinkedIn Corp LNKD 0.83%
- Lam Research Corp LRCX 0.55%
Goldman analysts see the most Q1 earnings downside for these names:
- Cabela’s Inc CAB 0.79%
- Coach Inc COH 1.25%
- EverBank Financial Corp EVER 0.33%
- Deere & Co DE 1.2%
- Kennametal Inc KMT 0.48%
- Microsoft Corporation MSFT 0.1%
- FirstEnergy Corp FE 1.54%
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