We’re barreling through the meat of earnings season…
So far, Big Tech’s reports have been a mixed bag. On Wednesday, META and MSFT posted reports that investors viewed as highly encouraging … but then, on Thursday, AAPL and AMZN put a damper on things with their hints of the negative impacts of tariffs.
Of course, while these companies can move the market immediately, we’re more interested in a broader pool of companies and what they signal about the economy and markets ahead.
This is why I developed my Green Zone Power Rating system — to consider the “bigger picture” of a stock’s health, by taking into consideration 75 metrics across multiple factors and time frames.
Let’s see what we can learn about the companies scheduled to report quarterly numbers next week. First, though, we’ll check in on one bellwether’s report from this week …
CVS Beats, Poised to be “Shakeout” Winner Thanks to New-Normal Washington
CVS Health (CVS) landed on my bullish earnings screen last Friday, suggesting we should expect some good news when the company reports…
Yesterday, the health care company best known for its corner pharmacies reported $2.25 earnings per share for the first quarter of 2025, smashing expectations by 34%! It also surprised marginally on revenue, reporting $94.5 billion on the top line.
Shares of CVS closed 4% higher yesterday and broke out to a new 52-week high. While my Green Zone Power Ratings currently rate the stock “neutral,” I’ll be watching the stock’s price action as it could precede a move into our “bullish” zone.
Kudos to my friends Andrew Zatlin and Matt Clark, who run the Capitol Gains Trader service. They correctly identified the opportunity in CVS back in February when they recommended the stock (and a profit-juicing option play) to their subscribers.
Click here to see how Andrew and Matt are targeting three sectors with new trades they established earlier this week.
Now, let’s shift gears to what’s ahead…
A Gauge of Oil Demand…
Let’s start with companies that are expected to beat their previous quarter’s earnings numbers and thus poised to trade higher if they succeed in meeting or exceeding those expectations…
For this screen, stocks must meet four criteria:
- The stock is covered by 10 or more analysts.
- The average analyst recommendation is a “Buy.”
- It BEAT analysts’ EPS estimates for the previous quarter.
- The average analyst estimate for the current quarter’s EPS is greater than the previous one.
Here are five important companies set to report next week:
(Note: If you’d like to see a full breakdown of how these stocks rate in my system, click here to see how you can join Green Zone Fortunes today.)
Remember, my Green Zone Power Rating system gives us a 360-degree snapshot of the company’s strength and how the stock has been behaving recently. It’s a robust system that gives longer-term buy-and-hold investors a good gauge of the stock’s potential to beat the market over the following months and even years.
It’s not an earnings forecaster, but it does quickly incorporate each report’s new data points to ensure the stock’s rating is adjusted accordingly.
Of the five stocks above, four rate “bearish” even though they’re expected to report quarter-over-quarter growth. We’ll see what they actually report, and what impact the numbers have on each stock’s rating over the next week or so.
One report I’m particularly interested in is Occidental Petroleum’s (OXY). The energy sector has been one of the worst-performing sectors since this bull market kicked off in late 2022. While it’s encouraging to see the oil producer expected to report an improvement in EPS, from $-0.31 to $0.78, I’m eager to hear what executives have to say about the ongoing trade war and how it’s likely to affect supply and demand.
One thing is for sure … the stock is on sale according to my system’s Value factor rating of 86 out of 100.
Now let’s look at the companies expected to report declining earnings next week…
“Bearish” Stocks to Watch
For this screen, we’re only looking for two things:
- The stock must be covered by 10 or more analysts.
- The average analyst estimate for the current quarter’s EPS is less than the previous quarter’s.
We want companies that are covered by a sufficiently large group of Wall Street analysts who collectively expect the company to report a quarter-over-quarter decline in earnings.
Here’s what we’ve got for next week:
The first four stocks on this list carry either “neutral” or “bearish” Green Zone Power Ratings. A poor earnings report should only confirm the standing these stocks currently hold in my system.
Uber Technologies (UBER) is definitely one to watch. The stock is up 28% year to date, handily beating the broader market. A bearish earnings call could trigger some profit-taking.
Casino resort conglomerate Wynn Resorts (WYNN) should also provide insight into discretionary spending. The health and confidence of the U.S. consumer have been in sharp focus as everyone tries to assess the likelihood of the trade war triggering a recession.
Let’s see what UBER and WYNN executives have to say about that …
To good profits,
Editor, What My System Says Today
P.S. We’re seeing a market shakeout in real time. The companies that adapt to the new rules will flourish, and my Green Zone Power Rating system can help us find them. To learn more about this shakeout and how you can gain full access to my rating system now, click here.