With earnings season here, investors are bracing for weaker corporate profits as the credit Suisse forecast suggested that the S&P500 companies will see a 6.4% decline in their profits. Despite the short-term earnings, being expected to decline, investors should not be overly concerned as Jonathan Golub, the Chief US equity strategist at Credit Suisse, wrote in an April 12 note that the median S&P 500 company is projected to enjoy positive earnings growth of 0.6%.
Moreover, the poor outlook on earnings is somewhat offset by the expected growth in sales, as Credit Suisse projects a 1.7% increase in revenue. The subsequent challenge that the S&P500 companies faces is a 9.9% decline in profit margins.
Despite the gloomy earnings report, investors have some reason to feel optimistic as early quarterly results from the 21 companies have surprised them with an average 10.9% over the estimates. This result demonstrates the strength of the economy and the labour market.
To help investors discern which stocks will have the most important impact on corporate earnings, Credit Suisse have compiled a list of 15 stocks. These stocks have gotten great potential for either the respective year-over-year comparison or shows the strength of the industry due to the opening of the economy.
The list contains a range of stocks, such as energy companies with strong refining margins, cruise lines and casinos. The stock list primarily includes Apple, Microsoft, Amazon and Visa, alongside a number of other large-cap stocks.
Jonathan Golub is the Chief US equity strategist at Credit Suisse, responsible for providing actionable short-term and long-term fundamental and technical analysis of the US equity market. Golub is a highly accomplished strategist in the financial industry, and has been instrumental in the US equity markets for over 2 decades. He got his start in the early 2000s as a financial analyst, and has since become the go-to source for advice in the marketplace. He is an active speaker on the Securities & Exchange Commission’s Investor Advisory Committee and has helped shape global regulatory policies concerning the capital markets and retirement investing.
