Nvidia just reported third-quarter profit that doubled — putting it near the top of the S&P 500's growth. But look for huge profit growth from other firms this quarter.
Eight S&P 500 stocks, including Merck, Seagate Technology and KeyCorp, are expected to post more than 150% adjusted profit per share growth in the ongoing fourth quarter, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. That easily surpasses the 64% earnings growth analysts are calling for from Nvidia.
And these stocks would stand out in what's seen as being a bonanza quarter for S&P 500 profit.
Sizing Up The S&P 500 In The Fourth Quarter
Hopes are high earnings growth in the fourth quarter will be even stronger than the third.
S&P 500 profit growth in the current quarter is seen rising to 12%, says John Butters of FactSet. If that ends up happening it would mark a big jump in the S&P 500's 5.8% growth in the third quarter.
Why such a big jump in quarterly profit? Financials.
"The banks industry is projected to be the largest contributor to earnings growth for the S&P 500 for the fourth quarter," Butters said. "A large number of companies in this industry are benefiting from easy comparisons to weaker (GAAP) earnings reported in the year-ago quarter due to significant charges related to FDIC special assessments and other items that were included in their GAAP EPS."
Case in point: KeyCorp's shares are up 36% this year, no doubt in part due to strong pending quarterly results. Analysts think the bank holding company will make 32 cents a share in the fourth quarter, up 952% from the same year-ago period. KeyCorp sports an RS Rating of 87.
Biggest Profit Gain? Merck
But when it comes to profit gains in the fourth quarter, the stock to beat is Merck. Analysts think the pharmaceutical giant's profit will soar more than 6,000% in the fourth quarter.
Investors, though, are skeptical. Shares of Merck are down 9% this year. That gives them an RS Rating of just 16. And that's despite analysts calling for 412% higher profit in all of 2024.
So while there's huge profit gains coming inside the S&P 500, investors keep their eyes affixed to the glory of Nvidia.
Top Expected EPS Gains In Fourth Quarter
Among S&P 500
| Company | Ticker | EPS Q4 % ch. (est.) |
|---|---|---|
| Merck | MRK | 6,044.7% |
| Seagate Technology | STX | 1,455.3% |
| KeyCorp | KEY | 952.4% |
| American Tower | AMT | 648.5% |
| Paramount Global | PARA | 381.9% |
| Pfizer | PFE | 372.3% |
| SBA Communications | SBAC | 196.5% |
| Vistra | VST | 157.1% |
