×
S&P 500   3,818.67 (-0.17%)
DOW   30,868.23 (-0.74%)
QQQ   285.44 (+1.17%)
AAPL   140.95 (+1.45%)
MSFT   261.78 (+0.85%)
META   166.84 (+4.26%)
GOOGL   2,256.96 (+3.78%)
AMZN   113.49 (+3.59%)
TSLA   692.96 (+1.64%)
NVDA   148.42 (+2.20%)
NIO   21.93 (+2.67%)
BABA   117.90 (+1.64%)
AMD   74.67 (+1.36%)
MU   56.41 (+5.14%)
CGC   2.67 (-4.98%)
T   21.06 (-1.17%)
GE   61.27 (-3.57%)
F   11.10 (-1.94%)
DIS   96.63 (+0.51%)
AMC   12.67 (-6.36%)
PFE   51.27 (-1.99%)
PYPL   74.16 (+3.87%)
NFLX   183.83 (+2.16%)
S&P 500   3,818.67 (-0.17%)
DOW   30,868.23 (-0.74%)
QQQ   285.44 (+1.17%)
AAPL   140.95 (+1.45%)
MSFT   261.78 (+0.85%)
META   166.84 (+4.26%)
GOOGL   2,256.96 (+3.78%)
AMZN   113.49 (+3.59%)
TSLA   692.96 (+1.64%)
NVDA   148.42 (+2.20%)
NIO   21.93 (+2.67%)
BABA   117.90 (+1.64%)
AMD   74.67 (+1.36%)
MU   56.41 (+5.14%)
CGC   2.67 (-4.98%)
T   21.06 (-1.17%)
GE   61.27 (-3.57%)
F   11.10 (-1.94%)
DIS   96.63 (+0.51%)
AMC   12.67 (-6.36%)
PFE   51.27 (-1.99%)
PYPL   74.16 (+3.87%)
NFLX   183.83 (+2.16%)
S&P 500   3,818.67 (-0.17%)
DOW   30,868.23 (-0.74%)
QQQ   285.44 (+1.17%)
AAPL   140.95 (+1.45%)
MSFT   261.78 (+0.85%)
META   166.84 (+4.26%)
GOOGL   2,256.96 (+3.78%)
AMZN   113.49 (+3.59%)
TSLA   692.96 (+1.64%)
NVDA   148.42 (+2.20%)
NIO   21.93 (+2.67%)
BABA   117.90 (+1.64%)
AMD   74.67 (+1.36%)
MU   56.41 (+5.14%)
CGC   2.67 (-4.98%)
T   21.06 (-1.17%)
GE   61.27 (-3.57%)
F   11.10 (-1.94%)
DIS   96.63 (+0.51%)
AMC   12.67 (-6.36%)
PFE   51.27 (-1.99%)
PYPL   74.16 (+3.87%)
NFLX   183.83 (+2.16%)
S&P 500   3,818.67 (-0.17%)
DOW   30,868.23 (-0.74%)
QQQ   285.44 (+1.17%)
AAPL   140.95 (+1.45%)
MSFT   261.78 (+0.85%)
META   166.84 (+4.26%)
GOOGL   2,256.96 (+3.78%)
AMZN   113.49 (+3.59%)
TSLA   692.96 (+1.64%)
NVDA   148.42 (+2.20%)
NIO   21.93 (+2.67%)
BABA   117.90 (+1.64%)
AMD   74.67 (+1.36%)
MU   56.41 (+5.14%)
CGC   2.67 (-4.98%)
T   21.06 (-1.17%)
GE   61.27 (-3.57%)
F   11.10 (-1.94%)
DIS   96.63 (+0.51%)
AMC   12.67 (-6.36%)
PFE   51.27 (-1.99%)
PYPL   74.16 (+3.87%)
NFLX   183.83 (+2.16%)

What To Buy Before The Q2 Earnings Season Kicks Off 

Tuesday, June 21, 2022 | Thomas Hughes
What To Buy Before The Q2 Earnings Season Kicks Off 

The Q2 Season Could Be A Turning Point For The Market 

The outlook for the Q2 earnings reporting season is about as cloudy as it could be. Between uncertain supply chain improvement, wildly out-of-control inflation, rising energy prices, and an aggressive FOMC there is a real chance the season could be a bloodbath. Within the outlook, however, there are signs the quarter could be a turning point for the market but we’re not ready to call a bottom in equities just yet. Until then, some rays of light within the Q2 season suggest the Energy Sector (NYSEARCA: XLE) and the Materials Sector (NYSEARCA: XLB) are the best targets for speculators and investors. 

The Energy Sector Is Where Most Of The Profits Will Be

The consensus estimates for the Q2 season steadied and even ticked higher over the past few weeks but we don’t read too much into that. Seven of the eleven S&P 500 sectors have lower growth targets today than they did at the start of the quarter and the estimates for those sectors continue to fall. The reason the consensus target is holding steady and even creeping higher is 100% because of the energy market. The outlook for the energy sector is for YOY earnings growth in the range of 213% and that is up more than 7500 basis points since the start of the quarter and we see ample potential for an upside surprise. The price of WTI is edging lower from its most recent high but that high is within spitting distance of the all-time high and the price has been trending well above the Q1 2022 average. 


And if the consensus for earnings isn’t enough, the Energy Sector is by far the most upgraded sector over the past 90 days. Energy stocks account for 6 of the top 10 most upgraded stocks over the past three months and 13 of the top 20 with upgrades and price target increases still rolling in. Devon Energy (NYSE: DVN), Exxon-Mobil (NYSE: XOM), and Chevron (NYSE: CVX) are among the most upgraded stocks and the leading energy stocks over the past 30 days. Assuming we’re right about the actual results, we see the Energy Sector SPDR hitting a bottom very soon and reversing higher by the end of the reporting season. Exxon and Chevron will report the last week of July, Devon Energy reports the first week of August. 

What To Buy Before The Q2 Earnings Season Kicks Off 

The Materials Sector Is Getting Upgraded, Too 

The Industrial Sector has a better outlook for earnings growth than the Materials Sector but the Materials Sector is getting strong upgrades. The outlook for earnings in this sector is up 800 basis points over the last 3 months compared to a much smaller 400 basis point increase for the Industrials. While we are viewing both sectors bullishly, we think the Materials Sector has a better chase for outperformance and upgrades to the guidance. 

On an industry basis, all four sub-industries are experiencing the tailwind but one stock stands out as a clear winner, Teck Resources (NYSE: TECK). Teck Resources is a diversified play on mining with operations in steel-making coal, precious metals like copper, gold, and silver, and industrial metals like lead and zinc, and even phosphorous for fertilizer. The company is the single most upgraded stock in the sector and the 6th most upgraded stock this quarter. Turning to the charts, both Tech Resources and the Materials Sector experienced a sharp correction on fears of an economic slowdown that have them trading at the lowest levels in months.

What To Buy Before The Q2 Earnings Season Kicks Off 

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Exxon Mobil (XOM)
2.1958 of 5 stars
$83.72-4.4%4.20%13.88Hold$90.48
Chevron (CVX)
2.5875 of 5 stars
$141.14-3.7%4.02%13.27Moderate Buy$167.24
Devon Energy (DVN)
3.1289 of 5 stars
$51.10-7.3%9.94%9.59Moderate Buy$75.47
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Devon Energy right now?

Before you consider Devon Energy, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Devon Energy wasn't on the list.

While Devon Energy currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:


Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastIs The Market Near a Bottom, Does it Matter?

Today’s interview is a little different, in that you get a LOT of market perspective from someone who’s been analyzing stocks from the ground up, for more than three decades. In this conversation, Kate chats with Nancy Zambell, the chief analyst for the Cabot Money Club Letter - and Nancy has a really deep and varied background in the financial industry - as she mentions in this interview, she’s been a banker, real estate professional, and a stock market analyst.

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.