In today's IBD Screen of the Day, the focus is on top stocks that have rising earnings estimates. There are 109 stocks that pop up. After combing further in MarketSmith charts, two stocks are poised to break out: oilfield services company Schlumberger and O'Reilly Automotive.
Schlumberger reports earnings Friday before the open. It's been forming the right side of a cup base with some volume. Shares have climbed above their 50-day and 200-day moving averages, and even above their 21-day exponential moving average. The shares also boast a rising relative strength line.
The company shows five straight quarters of accelerating revenue growth. It also has impressive annual earnings estimates. Full-year profit is expected to rise 59% this year and 39% in 2023. Estimates have been heading higher.
Last quarter, Schlumberger beat earnings estimates and increased its full fiscal year outlook to at least $27 billion. The Houston-based multinational's Q2 EPS ballooned 66%. Sales increased 20% to $6.8 billion in the second quarter.
Stocks Approach Buy Points
"We expect this higher revenue to result in earnings that exceed our previous expectations, given our ambition to exit the year with adjusted EBITDA margins 200 basis points higher than in the fourth quarter of 2021," CEO Olivier Le Peuch said after Q2 earnings were released.
Capital investment for 2022 is expected to be approximately $2 billion, according to the company.
The company is one of the world's largest providers of offshore drilling services. It also provides technology for well drilling, production, and oil and gas processing.
Schlumberger ranks first in the oil and gas field services industry group, above other top-rated companies such as ProFrac and Tidewater. SLB has a Composite Rating of 97 out of 99. Its Relative Strength Rating is 95 and its EPS Rating is 79.
Despite strong capital expenditure increases, oil and gas companies are unlikely to scale up production operations anytime soon. Indeed, with crude oil prices now down to below $85 per barrel, large oil giants like Exxon Mobil, Chevron and BP are scaling back their production. U.S. oil rig activity has plateaued just below 770 since hitting a 2022 peak in late July, according to Baker Hughes.
Auto Parts Chain Among Best Stocks To Watch
Similarly, O'Reilly is approaching a 750.98 flat-base buy point, with its RS line hitting a new high. It is above its 50-day line and well beyond its 200-day moving average. The flat base is solid. The stock can be seen moving up steadily from scraping the bottom of the base to approaching the buy point.
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The company is due to release earnings on Oct. 26. It has a three-year EPS growth rate of 28% and a three-year sales growth rate of 13%. It has a Composite Rating of 96, an EPS Rating of 88 and a RS Rating of 91.
O'Reilly is ranked No. 2 in IBD's auto parts group, behind Genuine Parts and above AutoZone. AZO was an IBD Stock Of The Day last week and is also forming a cup.
With thousands of names to choose from, how can you efficiently find the top stocks to buy and watch?
For starters, zero in on top growth stocks that fit your criteria with IBD Stock Screener.
And investors can build their own screens from scratch, or start with IBD stock lists, especially the IBD 50, Sector Leaders, Big Cap 20 and IPO Leaders.
From earnings and sales growth to IPO date, dividend yield, current quarter EPS estimates and more, the screener is a valuable tool.
Follow Michael Molinski on Twitter @IMmolinski
