5 Stocks Gaining On Earnings Optimism

The earnings season continues to move stocks higher as big names deliver their quarterly performance reports one by one. As a result, analysts are updating their models with the latest numbers, resulting in rating changes for these companies.

As the US indices struggle to find a specific direction in today’s trading, some stocks are clearly on an upward trajectory. We unearthed these stocks by looking at the recent earning reports, analyst upgrades, and the earnings calendar. To come up with the list of 5 stocks gaining on analyst expectations, we only considered stocks with a market cap of at least $75 billion.

5. 3M Company (NYSE:MMM)

3M Company is a technology services provider that operates through safety & industrial, transportation & electronics, and consumer segments. Financial services firm Wells Fargo’s analysts upgraded 3M from Equal Weight to Overweight and raised its target price from $140 to $170.

MMM received an upgrade because analysts believe that the company is expected to report increasing profits as well as increased shareholder value through buybacks. According to the analysts, the company is well-positioned to start seeing the rewards of the biggest restructuring plan in its history. If sales gain momentum, the company will thrive. If they don’t, the improved structure will help it grow profits. In both cases, investors should be able to see a better stock performance than in the past.

Taking a look into the Q4 earnings of the company announced earlier this week, adjusted EPS came in at $1.68 which was higher than Wall Street analysts’ estimates of $1.54. Management estimates demonstrate a 0.5% to 1.5% growth in sales with an adjusted EPS of $7.60 to $7.90 for the next year.

4. United Parcel Services Inc. (NYSE:UPS)

United Parcel Services Inc. is a package delivery company that provides contract logistics, transportation & delivery, airfreight, and other services. Evercore ISI increased the target price of UPS to $147 and added it to its Outperform list just before the release of its quarterly financial report.

Analysts believe that the stock can bounce back from poor one-year returns. The company is working on cost reduction and according to the management, UPS’ cost-saving measures could save as much as $3 billion by 2028. Margins are likely to jump with the help of these cost-reduction activities and improved stock performance will then only be a matter of when, not if. Once investors realize this shift, the stock may not be available at the current depressed levels anymore.