Analysts are excited about these earnings reports coming next week

October 19

Several companies due to report next week could get a boost after their earnings results. Third-quarter earnings are largely exceeding analysts’ expectations. So far, of the 14% of companies in the S & P 500 index reporting results, 79% have reported a positive earnings surprise and 64% have posted a positive revenue surprise, according to FactSet data. Another 22% of S & P 500 companies are expected to post financial results next week. To separate the wheat from the chaff, CNBC Pro screened FactSet for companies reporting in the coming days that are liked by analysts and also have strong earnings momentum. To be included in our screen, stocks had to meet the following criteria: Have at least 10 upward earnings estimate revisions in the past three months Consensus earnings estimates needed to have risen at least 5% over the past three- and six months The average analyst price target had to have climbed 10% or more in the past three months Take a look below at the companies the screen turned up: Analysts have gotten increasingly optimistic on Seagate Technology over the past six months, with consensus earnings estimates rising roughly 54% — the most in our screen. One bullish analyst is Morgan Stanley’s Erik Woodring, who reiterated an overweight rating and $133 price target on Seagate in an Oct. 15 note to clients. That implies roughly 19% potential upside for the data storage stock, which has already gained roughly 31% this year. “We believe the Street is fundamentally mis-modeling gross margins, and see a path to 37% gross margins exiting FY25,” Woodring wrote. “We believe strength in gross margins will be the key to driving EPS upside in the Sept. and Dec. quarters.” The data storage company is scheduled to report earnings on Tuesday after the stock market closes. Health care stocks Universal Health Services and HCA Healthcare have also seen improved sentiment, as measured by earnings estimates since the Spring. Analysts have raised their consensus estimate on HCA Healthcare by about 11% and 9% in the past three and six months, respectively, a favorable harbinger ahead of the hospital chain’s earnings slated for Oct. 25. HCA shares have soared more than 53% this year. Universal Health Services, meanwhile, has seen analysts lift earnings estimates by about 20% over the past three months, while analysts’ consensus price target over the same period has widened the most of any company on the list. TD Cowen last Wednesday raised its price target on both HCA and UHS, saying the stocks could get a near-term boost from higher state-directed Medicaid payments. The investment bank maintained its buy rating while increasing its price target on HCA by $75 to $450, implying 8% potential upside from Friday’s close. TD Cowen moved its rating on UHS to buy from hold and improved its price target by $63 to $283, suggesting the hospital services provider could gain another 20%. Shares of HCA Healthcare and Universal Health Services are up roughly 54% and 55%, respectively, this year.

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