Netflix, Goldman Sachs, J&J, ASML Lead Q2 Reports This Week As Analysts See Earnings Growth Accelerating To Fastest In Over 2 Years

The second-quarter reporting season got off to a rocky start with investors reacting to some big bank earnings. Nevertheless, optimism over a healthy earnings season continues to abound.

The Week That Was: Shares of high-profile big banks including JPMorgan Chase & Co. JPM, Citigroup Inc. C and Wells Fargo & Company WFC came under selling pressure following their earnings releases. JPMorgan fell 1.21% after being down over 2.5% intraday on Friday. The weakness was despite the company reporting a double-beat. Wells Fargo slumped a steeper 6.02% as higher deposit costs dented its bottom line.

Delta Air Lines, Inc. DAL shares fell about 7% in two sessions after the airline reported a plunge in profit despite top-line coming in above estimates.

We are early days into earnings with only 5% of the S&P 500 companies having reporting earnings so far, according to financial data analytics company FactSet. Of these 81% reported earnings beat and a more modest 56% ringed in a positive revenue surprise.

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What’s Next: Blended earnings per share growth of S&P 500 companies is expected to be 9.3% for the second quarter, FactSet data showed. If the estimated growth is hit, it would mark the highest year-over-year growth rate since the first quarter of 2022, when the growth was 9.4%, it said.

The 9.3% estimated currently marks an improvement from the 8.9% that was expected at the end of June.

Nine of the 11 S&P 500 sectors are expected to report year-over-year earnings growth in the second quarter, with four of these, namely communication services, IT, healthcare and financials priming to report double-digit growth, Factset said. On the other hand, the materials sector is expected to report an earnings drop.

The blended revenue growth rate estimated for the second quarter is currently at 4.8%.

Notable among the sectors and industries on tap this week include the remainder of the big banks, a slew of regional banks, airlines, transportation, oilfield services and healthcare companies. European chip-equipment company ASML Holding N.V. ASML is among the first tech reporters this season and its report could grab a lot of eyeballs.

In a note released Sunday, Wedbush analyst Daniel Ives said, “We believe 2Q earnings will be a major positive catalyst for the tech sector and expect tech stocks to be up another 15% for the year adding to the robust tech gains in 1H2024.”  Factset’s estimates show that the IT sector will see a robust 16.4% earnings growth, with the largest contributor being Nvidia Corp. NVDA. The artificial intelligence stalwart is capitalizing on its early-mover advantage

Monday

• Goldman Sachs Group, Inc. GS
• BlackRock, Inc. BLK

Tuesday:

• ASML
• Johnson & Johnson, Inc. JNJ
• Bank of America Corporation BAC
• Morgan Stanley MS
• UnitedHealth Group Incorporated UNH
• J.B. Hunt Transport Services, Inc. JBHT

Wednesday:

• Alcoa Corporation AA
• Discover Financial Services DFS
• Kinder Morgan, Inc. KMI
• SL Green Realty Corp. SLG
• Steel Dynamics, Inc. STLD
• United Airlines Holdings, Inc. UAL

Thursday:

• Abbott Laboratories ABT
• Alaska Air Group, Inc. ALK
• Nokia Oyj NOK
• Marsh & McLennan Companies, Inc. MMC
• D.R. Horton, Inc. DHI
• Domino’s Pizza, Inc. DPZ
• Novartis AG NVS
• Intuitive Surgical, Inc. ISRG
• Netflix, Inc. NFLX

Friday:

• American Express Company AXP
• Halliburton Company HAL
• Schlumberger Limited SLB
•  Travelers Companies, Inc. TRV

The SPDR S&P 500 ETF Trust SPY, an exchange-traded fund tracking the performance of the S&P 500 Index, ended Friday’s session up 0.63% at $559.99, according to Benzinga Pro data.

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