Next week marks the unofficial start of earnings season, with 25 S&P 500 companies reporting, including major financial players like BlackRock and Morgan Stanley. These firms have a strong history of beating analyst expectations and seeing their shares rise post-earnings. BlackRock, reporting October 14, has topped estimates 82% of the time, while Morgan Stanley, reporting Wednesday, boasts an 80% beat rate, both with average share gains of 1.1%.
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As the latest earnings season officially kicks off next week, anticipation is high for a select group of financial services titans that historically outperform expectations and subsequently see their stock prices rise. A total of 25 companies within the prestigious S&P 500 index – roughly 5% of its constituents – are slated to disclose their most recent financial results in the coming days. Among the prominent financial institutions leading this wave of reports are BlackRock, Morgan Stanley, and Citizens Financial Group.
A recent analysis by CNBC Pro, leveraging data from Bespoke Investment Group, pinpointed companies boasting a robust history of not only beating analyst earnings per share (EPS) estimates but also experiencing significant share price appreciation immediately after these positive announcements. The criteria for inclusion in this elite group required companies to have surpassed EPS estimates at least 75% of the time, averaging a gain of 1% or more on the first trading day following their financial disclosures.
Asset management powerhouse BlackRock is scheduled to report its earnings next Wednesday. The firm has an impressive track record, topping analysts' EPS forecasts 82% of the time. Following these beats, BlackRock's shares have, on average, climbed 1.1% on the subsequent trading day. The company will release its third-quarter results before the market opens on October 14. Wells Fargo recently initiated coverage on BlackRock with an 'overweight' rating, citing a compelling entry point for investors. Wells Fargo analysts highlighted BlackRock as "the clear industry leader and a bellwether financial with recently accelerated operational momentum."
Morgan Stanley is also set to report on Wednesday. This banking giant has exceeded Wall Street's bottom-line estimates in 80% of its reports, with its shares typically gaining an average of 1.1% post-earnings. In its second-quarter report in July, Morgan Stanley announced record revenue and profits, significantly boosted by a 69% surge in equities trading revenue. The bank's wealth management division also posted stronger-than-expected revenue during that period. Investors will be closely monitoring how current higher interest rates impact various aspects of its business, including lending, merger and acquisition (M&A) activity, and startup funding.
Other major banks slated to report next week on October 13 include JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo, all of whom will be under intense scrutiny as market participants assess the broader financial landscape.
