A week ago, I shared with you 10 stocks to sell before earnings. I explained how, right before earnings season, it’s crucial to watch analyst activity.
Upward revisions are an important indicator of a company’s future success. You see, analysts are paid to estimate a company’s earnings outlook. If an analyst makes a wrong estimate that ends up costing investors money, that analyst could be out of a job. If a number of Wall Street analysts start to move their forecasts higher, it’s a good bet that the stock will outperform expectations and deliver market-beating returns to investors since positive revisions are never made lightly.
The ten stocks I selected last week were duds, in that analysts had slashed their earnings estimates for each company over the past three months. Today, we’re looking at 11 “analyst darlings,” which have all seen significant upward EPS revisions over the same period. I have the complete list below, but I want to draw your attention to one stock in particular: Acuity Brands Inc. (AYI).
Based in Atlanta, Georgia, Acuity Brands Inc. is a leading provider of lighting solutions in North America, Europe and Asia. With 13 indoor and outdoor lighting brands, Acuity serves commercial, institutional, industrial and residential clients. From roadway lighting to decorative lighting to LED solutions, Acuity Brands has it covered. So, Acuity Brands naturally benefits from the housing and construction recovery, as well as the push for cheaper LED lightbulbs.
Acuity Brands is scheduled to report fiscal second-quarter results before the market opens tomorrow, April 6. As it stands, analysts are looking for 39.8% annual earnings growth and 22.1% annual sales growth. Meanwhile, the industry as a whole is headed for a 14.5% year-on-year drop in earnings! And as you can see below, over the past 90 days, the consensus EPS estimate has increased 5.6%. This suggests that Acuity Brands will surpass earnings expectations once again.
So it’s easy to see why AYI in three of my advisory newsletters: Blue Chip Growth, Navellier Family Trust and Platinum Growth Club. I’m looking forward to seeing how AYI’s earnings report shakes out. In the meantime, here are 10 other stocks that are expected to outperform this earnings season:
|Ticker||Current EPS Estimate||90 Days Ago||% Change||Earnings Date||My Recommendation|
Each of these stocks is a current holding in one of my advisory newsletters. This list represents just a small portion of the “analyst darlings” that populate my various Buy Lists. If you’d like to learn more about these other holdings, you can explore my premium newsletters here.