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During earnings season, Wall Street analysts continue to lower margin expectations. But there are some stocks that are showing resilience in that area, says Goldman Sachs.
Equity strategist David Kostin and team evaluated the S&P 500 (SP500) (NYSEARCA:SPY) (IVV) (FLIGHT) stocks that “were punished by investors following Q4 EPS reports but beat margin expectations and where consensus expects margins to expand in 2023.”
“These 20 companies achieved better margins in the fourth quarter of 2022 than consensus expected, but underperformed their respective sectors the day after reporting results,” Kostin wrote in a note. “We include only stocks that consensus expects to expand net margins in 2023.”
“The median stock on display is expected to extend net margins by 85bps in 2023 vs. 2022 (vs -9bps for the median stock of the S&P 500 (SPXU) (UPRO) (SPXL) (SSO)).”
The actions are:
- T-Mobile (TMUS), Post-Data Performance vs. Sector -23 bps, 2023 Consensus Net Margin Expansion 709 bps
- Incyte (INCY), -467, 454
- United Airlines (UAL), -273,321
- VMS (VMS), -136, 218
- Halliburton (HAL), -158,212
- Delta (DAL), -341, 172
- Synopsis (SNPS), -346, 119
- Alaska Air (ALK), -3, 113
- Juniper Nets (JNPR), -635, 104
- Becton Dickinson (BDX), -156, 97
- Automatic Data Processing (ADP), -439, 72
- Johnson Controls (JCI), -533, 69
- F5 (IVF), -41, 67
- DXC technology (DXC), -18, 55
- Kimberly-Clark (KMB), -219, 42
- Fortivo (FTV), -389, 35
- Trimble (TRMB), -444.31
- Corteva (CTVA), -356, 16
- Digital generation (GEN), -883, 12
- United Health (UNH), -160, 6
- Median list -307, 85
- The median for the S&P 500 was 51.-9
See Morgan Stanley’s list of wrongfully punished stocks.
