What are 'earnings exceeders' according to Evercore ISI?

'Earnings exceeders' are companies with a history of beating earnings and revenue estimates, favorable valuations, and positive earnings revisions.

Which sectors are highlighted for potential outperformance?

Technology and consumer discretionary sectors are prominently featured as potential areas for outperformance among 'earnings exceeders'.

Why is security selectivity critical in the current market?

Security selectivity is crucial because of intensifying bubble concerns and the need for companies to significantly surprise investors to achieve outperformance.

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Earnings Exceeders: Your Next Big Stock Pick?

13 Jan

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Summary

Companies with strong earnings and revenue beats can outperform.
Technology and consumer discretionary sectors show promise.
Selectivity is crucial amid intense market cycle.

Earnings Exceeders: Your Next Big Stock Pick?

As the fourth-quarter earnings season commences, Evercore ISI identifies a category of stocks known as 'earnings exceeders' that could lead market outperformance. These companies have demonstrated a consistent ability to surpass both earnings and revenue estimates, coupled with attractive valuations and positive earnings revisions.

The focus is on 'earnings exceeders' that meet specific criteria, including strong historical performance, favorable valuations, and outperforming the broader market post-earnings. While AI and technology sectors have seen guarded sentiment, their 'exceeder' stocks, such as Booking Holdings and S&P Global, are noted for their resilience and potential.

Julian Emanuel of Evercore ISI stresses that with investors anticipating significant growth, companies must deliver exceptional results to achieve outperformance. This environment underscores the importance of careful stock selection, as even strong performers will need to exceed expectations to stand out in the current capital market cycle.