Some highlights from the report:
- With 90% of S&P 500 companies having reported Q3 earnings, median sales growth of 6% is in line with Q2, while median EPS growth of 9% decelerated a bit from 11% in Q2.
o Health Care and Retail are the two sectors that showed median acceleration in both sales and EPS growth. Financial showed slight sales growth acceleration but slight EPS growth deceleration.
o Tech had another great quarter, with the second-best median sales growth (7%) and tied-for-best median EPS growth (13%).
- EPS surprises: As expected, the median surprise was about 3%, in line with the last six years. Energy (+9%) and Tech (+6%) had the best median surprises.
- Day-of Reactions: Reactions to earnings were not great, about flat across all companies. Despite growth acceleration, Health Care and Retail had the worst reactions. Cyclicals and Energy had the best reactions, possibly attributed to outsized EPS beats.
- Looking at our U.S. Focus List, companies that reported sales/EPS growth acceleration, sales/EPS beats, and reacted positively on the day of earnings include: WING, CDEV, OLED, EL, SIVB, GOOGL, ALGN, MPWR, ABMD, RHT, PYPL, PRAH, NOW. Those highlighted in green remain buyable.
- Other actionable names include BABA, AMZN, ADSK, AVGO, COG, SCHW, COR, ESNT, FB, FIVE, FLT, GPN, ILMN, MB, MS, NFLX, QTWO, RP, SKX, SWKS, TNET, WB, WAL.
