These stocks could get a bump after reporting earnings next week

Published Fri, Apr 12 20241:30 PM EDTUpdated Fri, Apr 12 20242:43 PM EDT

With sticky inflation and increasing uncertainty about the Federal Reserve's rate-cutting path, first-quarter earnings could be the next best sign of the stock market's health, and whether equities can make further progress or manage to hold on to recent gains. After a stellar first quarter, stocks have had a rough start to the second quarter, with all three major U.S. stock indexes trading in the red this month. Hotter-than-expected inflation data released Wednesday and Friday further dampened investor sentiment by pushing out expectations of when and how many times the Federal Reserve might lower interest rates this year. Several big financial and medical technology companies in the S & P 500 are scheduled to start releasing their latest results next week. With companies just beginning to report their profit pictures, investors may want to take a look at those businesses that have a reliably strong track record of beating analyst estimates and seeing their shares rally in response. Using Bespoke Investment Group data, CNBC Pro screened for stocks set to release their quarterly results that meet the following criteria: Reporting earnings next week Average earnings per share beat rate of 70% or higher Shares typically gain an average of 1% or more after reporting earnings The screen turned up medical device company Intuitive Surgical as showing the highest average one-day move after reporting earnings, at 2.43%, and an average EPS beat rate of 87%. Shares have jumped nearly 15.5% year to date, fueled by the company's fourth-quarter earnings beat on Jan. 23 that reflected higher demand for its surgical robots used in minimally invasive procedures. Citigroup recently raised its price target on Intuitive to $462 from $428 and kept a buy rating on the stock, saying in an early April note that the Food and Drug Administration's long-awaited approval of the company's Da Vinci 5 robotic surgery system should drive the stock higher. "Intuitive continues to maintain its robotic surgery leadership position and the approval of Da Vinci 5 solidifies that this will not change anytime soon," Citi analyst Joanne Wuensch wrote. "We anticipate Da Vinci Xi demand will hold strong in the interim as customers await the commercial launch of da Vinci 5, benefiting from improving utilization and procedure volume trends in the near-term." Intuitive is slated to report earnings next Thursday. Home construction company D.R. Horton , which also reports on Thursday, has a 76% earnings beat rate and the stock typically gains roughly 1.5% after results. Wedbush downgraded D.R. Horton to underperform from neutral last week, saying homebuilders will see weaker demand heading into the summer. D.R. Horton has slumped more than 9% this quarter as homebuilders and buyers alike struggle with higher mortgage rates and input costs. Toolmaker Snap-on had the highest earnings beat rate on the screen, at 90%. Analysts polled by FactSet have a consensus hold rating on the stock and an average price target of almost $280, implying about 5% downside. Other companies that could see a bump after earnings next week include Blackstone , Citizens Financial and workforce solutions company ManpowerGroup .