JPMorgan, Wells Fargo, Morgan Stanley, Netflix, UnitedHealthcare, Johnson & Johnson and CSX Corp are part of Zacks Earnings Preview

For Immediate ReleaseChicago, IL – April 14, 2025 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes JPMorgan JPM, Wells Fargo WFC, Morgan Stanley MS, Netflix NFLX, UnitedHealthcare UNH, Johnson & Johnson JNJ, CSX Corp. CSX.Are Tariff Worries Affecting the Earnings OutlookMost of us are hoping that the Q1 reporting cycle, which took the spotlight with the quarterly releases from JPMorgan, Wells Fargo, Morgan Stanley and others on Friday, will prove to be much more than simply background noise for this market, which remains fixated on bigger questions triggered by the tariffs uncertainty.There are valid reasons for the market to remain focused on the tariffs issue since so much is happening in the broader economy, like the rise in treasury bond yields, pressure on the exchange value of the U.S. dollar, and softening consumer and business confidence. This unsettled backdrop has a bearing on consumer and business spending, which in turn increases risks to the economy’s growth trajectory.The pause to the start of the reciprocal tariffs is welcome and has gone some ways towards reducing near-term risks to the economy. However, the overall air of uncertainty remains, which puts a question mark on current consensus expectations for the economy and corporate earnings.The one reassuring aspect of the current environment is the U.S. economy’s solid foundations that allowed it to withstand the Fed’s extraordinary tightening over the last two years. The U.S. economy’s resilience and steady growth momentum have been the envy of the world, and it should give us confidence in its staying power in the current and coming periods of uncertainty.It wouldn’t be easy, but let’s not forget that there was no shortage of recession calls in response to the U.S. Fed’s earlier tightening moves. Announcements of lowered recession odds by several major Wall Street firms in recent days following the tariff pause is partly an acknowledgement of this underlying strength and resilience.We saw this in the JPMorgan and Wells Fargo results, which showed that consumers continued to spend at levels that we have been seeing in recent quarters. While heightened uncertainty and the resulting market volatility has been a headwind for investment banking activities, the trading business benefits from increased volatility. We saw that in the trading numbers from JPMorgan as well as Morgan Stanely and will most likely be a regular feature of this earnings season.This Earnings Season is Not About the Q1 NumbersGuidance is always a crucial part of the earnings releases, even though only a minority of companies provide actual guidance. Given the all-around uncertainty, the significance of guidance is even higher this time. Even so, we are unlikely to get much guidance this time around, as these management teams are as much at the receiving end of the unfolding tariffs issue as the rest of us.This is a problem for current consensus earnings expectations for the coming quarters, which will most likely get lowered as we go through the Q1 earnings season. Unlike other reporting cycles, we will be more interested in how expectations for Q2 and beyond evolve instead of what companies actually report for Q1.A big contributing factor to this year’s expectations was the potential positive impact of the Trump administration’s market-friendly policies in the shape of lowered taxes and deregulation. But as you can see above, aggregate 2025 estimates peaked in July 2024 and have been on a downtrend ever since.Since the earnings outlook for the Energy sector had to be steadily ratcheted down due to persistent oil price weakness, we will need to look at the above aggregate earnings picture on an ex-Energy basis.2025 earnings estimates peaked in January 2025 and have been trending down ever since. Our data shows that the negative revisions trend picked up pace in February and March, with the latest tariff headlines and associated diminished macro visibility adding to the pressure.Key Earnings Reports This WeekWe have over 80 companies on deck to report results this week, including 29 S&P 500 members. Dominating this week’s line-up are more Finance sector players, with the major banks, insurance companies, and regional operators coming out with Q1 results.We have a sprinkling of bellwethers from outside of the Finance sector reporting results this week, including Netflix, UnitedHealthcare, Johnson & Johnson, CSX Corp., United Air Lines, and others.UnitedHealthcare’s outperformance is partly reflective of favorable changes to Medicare payment policies recently, but the company’s domestic orientation gives it ‘tariff immunity.’ Netflix and JNJ benefit from the same trend, while CSX Corp’s exposure to trade is fairly obvious.We are seeing this in the revisions trend for these three players as well, particularly Netflix and UnitedHealthcare.Early Q1 Earnings ScorecardIncluding the aforementioned JPMorgan, Wells Fargo, and Morgan Stanley reports, we now have Q1 results from 29 S&P 500 members. Most of these 29 index members had fiscal quarters reporting in February, which we count as part of the March-quarter tally.Total earnings for these 29 index members are up +6.5% from the same period last year on +5.7% revenue gains, with 65.5% of the companies beating EPS estimates and 72.4% beating revenue estimates.These early companies appear to be struggling to beat consensus estimates, with the EPS beats percentage for this group of companies the lowest in the preceding 20-quarter period. This is disconcerting, but we want to caution against reading too much into these early results, given the sample size.Estimates Under PressureLooking at Q1 as a whole, combining the actuals from the 29 S&P 500 members with estimates for the still-to-come companies, the expectation is that earnings will be up +6.3% from the same period last year on +3.9% higher revenues, which would follow the +14.1% earnings growth on +5.7% revenue gains in the preceding period.We noted earlier how estimates for the current period (2025 Q2) have started coming down already, which we believe will weaken further as companies report results and discuss the extent of uncertainty around their near-term business outlook.Depending on where the emerging tariff regime settles, earnings estimates will need to come down in response. The ongoing market weakness is essentially a reflection of these diminished earnings expectations.For more details about the evolving earnings picture, please check out our weekly Earnings Trends report here >>>> Guidance to be Key Factor Earnings SeasonWhy Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wells Fargo & Company (WFC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Morgan Stanley (MS): Free Stock Analysis Report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks