It’s another earnings Friday for What My System Says Today!
For today’s analysis, I’m going to start with a look at potential earnings growth for two S&P 500 sectors.
Then, I’ll get into “bullish” and “bearish” earnings for next week.
Let’s start with a look ahead…
We’re just getting into the Q4 2025 earnings season, and analysts have given their forecasts for two key sectors of the market: energy and utilities.
And those projections show a notable divergence between the two sectors:
The energy sector is estimated to report the second-largest year-over-year decline of all 11 sectors at -2.8%.
Lower year-over-year oil prices impact earnings in the energy sector. The average cost of oil in Q4 2025 was $59.14 per barrel, 16% lower than the year-earlier average.
Analysts project a second year-over-year decline for Q1 2026 before the sector begins to turn things around.
On the utilities side, the expectation is that the sector will report the fifth-highest year-over-year increase among the 11 sectors at 4.6%.
The difference between energy and utilities is not only the positive EPS change this quarter, but also the subsequent rises in the following quarters.
By Q4 2026, the utilities sector is expected to increase EPS by 17.3% year over year. In fact, the utilities sector of the market is expected to deliver double-digit earnings growth over the next two quarters.
It illustrates a firm difference between the two sectors now, and in the quarters ahead.
Now, let’s examine potentially “bullish” earnings for next week.
“Bullish” Earnings to Watch
These stocks are expected to beat their previous quarter’s earnings per share (EPS), and thus, if those expectations are met or exceeded, they could potentially trade higher.
For this screen, stocks must meet four criteria:
- 10 or more analysts cover the stock.
- 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 10 companies that made this week’s list:
What stands out on this list is the massive quarter-over-quarter earnings increase for Meta Platforms Inc. (META).
Projections indicate a $7.12 increase in EPS to $8.17 per share this quarter.
The rationale for the massive earnings rise is strong year-over-year growth driven by advertising and artificial intelligence.
One thing to note is that Meta has issued earnings surprises in four of the last five quarters and sales surprises in all five.
Meta has a good chance of another earnings surprise this quarter. However, one thing to watch for is high capital expenditures for AI and how that plays into the company’s plans.
The stock has a solid chance of climbing out of the “bearish” category of Adam’s Green Zone Power Ratings system, if the beats are significant.
Now, let’s look at potentially “bearish” earnings for next week…
“Bearish” Earnings to Watch
For our “bearish” earnings screen, we’re only looking for two things:
- 10 or more analysts must cover the stock.
- 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 are 10 companies that passed this screen:
The part of this list that draws my attention is that major defense contractors Lockheed Martin Corp. (LMT) and Northrop Grumman Corp. (NOC) are on it.
Defense spending was an early focus of the Trump administration, potentially boosting earnings and revenue for both companies.
Both companies are being underestimated in terms of their EPS. Both will report an increase in EPS, with either a slight revenue uptick or flat revenue.
If one or both companies beat on one or both factors, LMT and NOC should get a boost on Adam’s Green Zone Power Ratings system (one is rated “Neutral,” while the other is “Bullish).
It should be another interesting week for earnings.
That’s all from me today.
I hope you all have a great weekend.
Until next week…
Safe trading,
Matt Clark, CMSA®
Chief Research Analyst, Money & Markets