- Wall Street’s Q4 earnings season kicks off next week.
- Analysts expect annualized profit growth of +11.9% and an increase of +4.6% in revenue growth.
- I used the InvestingPro Stock Screener to identify companies forecast to deliver growth of over 25% in both earnings per share and revenue.
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Wall Street's fourth-quarter earnings season begins next week, when notable names like JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Citigroup (NYSE:C), BlackRock (NYSE:BLK), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), UnitedHealth (NYSE:UNH), and Taiwan Semiconductor Manufacturing (NYSE:TSM) all deliver their financial results.
The following week sees high-profile names like, Netflix (NASDAQ:NFLX), American Express (NYSE:AXP), Johnson & Johnson (NYSE:JNJ), Procter & Gamble (NYSE:PG), GE Aerospace (NYSE:GE), American Airlines (NASDAQ:AAL), United Airlines (NASDAQ:UAL), and Verizon (NYSE:VZ) report earnings.
The earnings season gathers momentum in the final week of January when the mega-cap tech companies, including Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Tesla (NASDAQ:TSLA), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), and Apple (NASDAQ:AAPL) are all scheduled to release their quarterly updates.
Investors will be closely watching the earnings reports as companies reveal how they have navigated the challenging macroeconomic environment marked by high interest rates, lingering inflation, and ongoing geopolitical risks.
According to FactSet estimates, earnings per share for the S&P 500 are expected to grow +11.9% in the fourth quarter when compared to the same period last year. That is slightly lower than the +14.5% annual earnings growth for the quarter forecast on September 30.
Despite the decline in estimated earnings, the index is still expected to report its highest year-over-year earnings growth rate in three years, dating back to Q4 2021.
Source: FactSet
As the chart above shows, the Financials sector is expected to report the largest annualized earnings growth rate of all eleven sectors, at +39.5%. The space includes high-profile companies such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, Morgan Stanley, Visa (NYSE:V), Mastercard (NYSE:MA), and American Express.
The Communication Services sector is forecast to come in second, with +20.7% year-over-year EPS growth. Facebook owner Meta Platforms, Google parent Alphabet, Netflix, Walt Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA), Verizon, and AT&T are included in this sector’s mix.
Elsewhere, the Information Technology sector is expected to report the third-highest annualized earnings growth rate, at +14%. Some of the biggest names in the sector include tech giants such as Apple, Nvidia (NASDAQ:NVDA), Microsoft, Broadcom (NASDAQ:AVGO), Salesforce (NYSE:CRM), Oracle (NYSE:ORCL), Cisco (NASDAQ:CSCO), ServiceNow (NYSE:NOW), and IBM (NYSE:IBM).
In contrast, earnings from the Energy sector, which includes oil and gas giants such as ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), EOG Resources (NYSE:EOG), Schlumberger (NYSE:SLB), and Kinder Morgan (NYSE:KMI), are expected to tumble -24.6% compared to last year - the worst drop of any sector by far.
The Industrials sector is projected to report the second worst Y-o-Y earnings slump of all eleven sectors, with EPS set to decline -3.8% from a year earlier, per FactSet. Notable names include GE Aerospace, Caterpillar (NYSE:CAT), RTX, Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), Honeywell International (NASDAQ:HON), and Deere (NYSE:DE).
Meanwhile, in terms of revenue expectations, analysts have also decreased their estimates during the quarter.
The S&P 500 is expected to report annualized sales growth of +4.6%, compared to expectations for revenue growth of +5.2% at the end of September.
Source: FactSet
As seen above, eight sectors are projected to report year-over-year growth in revenues, led by the Information Technology and Utilities sectors, at +11.1, +8.0%, respectively.
On the other hand, three sectors are predicted to report a year-over-year decline in revenue, led by the Energy sector, at -3.2%.
Stocks Forecast for 25% Q4 Earnings & Sales Growth
As Q4 earnings season kicks off, all eyes are on how corporate America has navigated persistent macroeconomic headwinds, with investors eager to see whether resilience or weakness defines the quarter.
Given the current economic backdrop, I used the InvestingPro Stock Screener to search for companies that are forecast to deliver growth of more than 25% in both earnings per share and revenue. 
Source: InvestingPro
In total, 38 stocks showed up in my screener.
Some of the notable tech-related names to make the cut include Astera Labs, Nvidia, Coinbase (NASDAQ:COIN), Super Micro Computer (NASDAQ:SMCI), Reddit, Robinhood (NASDAQ:HOOD), Seagate, Western Digital (NASDAQ:WDC), AppLovin (NASDAQ:APP), Trade Desk (NASDAQ:TTD), DraftKings (NASDAQ:DKNG), CrowdStrike (NASDAQ:CRWD), Cloudflare (NYSE:NET), Snowflake (NYSE:SNOW), and Palantir (NASDAQ:PLTR).
Source: InvestingPro
Meanwhile, Eli Lilly (NYSE:LLY), Newmont, Jeffries Financial, Blackstone (NYSE:BX), Prudential Financial (NYSE:PRU), Affirm, Axon Enterprise (NASDAQ:AXON), Comfort Systems (NYSE:FIX), Toast (NYSE:TOST), and On Holding are a few more stocks to watch for that are also projected to deliver double-digit Q4 earnings and sales growth.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the {{0|SPDR® S&P 500 ETF{{0| (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.