After several big tech and big oil stocks reported earnings this week, next week’s lineup continues to feature some big names in their respective sectors.
Let’s take a look at two big names that currently have Zacks stock’s highest valuations and are due for quarterly releases next week.
Aflac AFL
Aflac (AFL) is a stock that investors may want to consider. The insurer is in the financial sector and is expected to report fourth quarter earnings on Wednesday, February 1st.
Aflac is a viable investment from the highest rated accident and health industry, currently in the top 12% of more than 250 Zachs Industries. Revised earnings estimates for fiscal 2023 are trending upwards, although estimates for fiscal 2022 declined slightly.
Image Source: Sachs Investment Research
Q4 Preview: Aflac’s fourth quarter earnings are expected to be $1.21 per share, down 5% from the fourth quarter of 2021. That brings his EPS to his $5.25 in fiscal 2022, down 11% from fiscal 2021, but earnings are projected to continue its solid bottom in fiscal 2023. Line growth and up 3% to $5.43 per share.
Fourth quarter sales are projected to be $4.49 billion, down 17% from the year-ago quarter. Total sales are expected to fall 13% in FY22 and another 4% to $18.32 billion in FY23. Still, the higher expected earnings in FY23 and higher forecasts are excellent signs that Aflac is effectively managing its operating expenses amid the broader economic slowdown.
Image Source: Sachs Investment Research
Revenue ESP: Zack’s surprise forecast shows Aflac could beat earnings guidance in the fourth quarter, with the most accurate estimate at $1.23 per share and a Zack consensus EPS of $1.21.
Image Source: Sachs Investment Research
remove: Better-than-expected fourth-quarter earnings could help boost Aflac’s share price, and with revisions to its 2023 earnings forecast trending upward, it’s unlikely the company will provide forward-looking guidance. I think there are enough.
In addition, ALF’s share price rose +17% year-over-year, significantly outperforming the S&P 500 at -9%, keeping Aflac’s top line marginal as earnings remain stable despite a challenging business environment. It looks okay to have fallen into.
McDonald’s MCD
Another high-profile name investors want to consider buying before its fourth-quarter earnings report on Tuesday, Jan. 31 is McDonald’s (MCD), a retail and wholesale division.
McDonald’s stock has outperformed the broader market over the past year as it has become a more affordable fast food option for consumers amid rising inflation. The famous burger chain also boasts Zacks Rank #2 (buy) as its revenue projections for this quarter, fiscal year 2022, and fiscal year 2023 are up slightly.
Image Source: Sachs Investment Research
Q4 Preview: McDonald’s fourth-quarter EPS is expected to be $2.45, up 10% from the fourth quarter of 2021. Even better, this puts his FY22 earnings at $9.93, and FY23 EPS is projected to increase another 6%, up 7% year-over-year. Fourth quarter sales are expected to be $5.7 billion, down 5% from the year-ago quarter. Total sales are expected to decline 1% in FY22, but grow 4% to $23.86 billion in FY23.
Image Source: Sachs Investment Research
Revenue ESP: McDonald’s is expected to underperform final guidance with fourth-quarter earnings of $2.45 per share and Most Accurate Estimate EPS of $2.44.
Image Source: Sachs Investment Research
remove: Increased earnings forecast revisions for fiscal 2023, despite likely to be lower than final fourth-quarter guidance, suggest McDonald’s can provide stronger guidance in this year’s outlook Good sign. This may continue to attract investor interest, with MCD’s share price up +6% year-on-year, well above its benchmarks.
Conclusion
Both McDonald’s and Aflac stocks are likely to continue to outperform the broader market this year, and guidance in the fourth quarter report will be such a big indicator. Top-line growth at these high-profile companies has slowed, but management has demonstrated its ability to make the most of a tougher operating environment and a challenging economy, as demonstrated by earnings stability. Therefore, investors may want to consider purchasing the company’s stock.
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