Market Watch: Key S&P 500 Stocks Poised for Gains as Q3 Earnings Season Commences
As the third-quarter 2024 earnings season officially kicks off, a select group of S&P 500 companies are exhibiting significant pre-earnings momentum, suggesting potential for positive market reactions. Analysts are pointing to upward earnings revisions and robust growth forecasts as key drivers for this optimism. The upcoming reporting period will feature results from 34 S&P 500 constituents, representing approximately 7% of the index. Major U.S. financial institutions, including prominent banks, are scheduled to report, drawing considerable market attention.
Several companies stand out for their favorable analyst outlooks and positive stock performance leading into their earnings releases. JPMorgan Chase (JPM), **Progressive (PGR)**, and **Charles Schwab (SCHW)** are among those anticipated to see gains following their quarterly announcements. Other notable firms with similar positive sentiment include **Travelers (TRV)** and **Interactive Brokers Group (IBKR)**. The broader market’s anticipation is fueled by a general consensus of earnings growth, with expectations for the S&P 500 to record its ninth consecutive quarter of year-over-year expansion.
To identify these high-momentum stocks, analysts employed specific criteria based on FactSet data. Companies had to demonstrate at least 10 upward earnings estimate revisions and no more than 10 downward revisions over the preceding three months. Furthermore, a minimum 5% increase in both quarterly and semi-annual earnings projections was required, signaling sustained positive analyst sentiment and a belief in continued business performance.
Progressive Leads the Insurance Sector Amidst Positive Analyst Coverage
The insurance giant **Progressive (PGR)** is emerging as a frontrunner among companies with strong pre-earnings momentum. Its stock has seen a notable increase of over 2% year-to-date. Over the past three months, analysts have revised Progressive’s earnings estimates upward 52 times, indicating a growing conviction in its financial trajectory.
In September, Bank of America analyst Joshua Shanker raised the firm’s price objective for Progressive to $350 from $343, suggesting a potential upside of approximately 44%. Shanker highlighted that the market may still be underestimating the company’s earnings generation capabilities. His updated financial models project earnings per share (EPS) to reach $6.35 for the close of 2025 and $20.40 for 2026, figures that are 27% and 23% above current consensus estimates, respectively. Progressive is slated to report its earnings on Wednesday, October 15th, with market participants expecting the company to potentially surpass existing expectations.
Charles Schwab Exhibits Sustained Momentum in the Financial Services Landscape
**Charles Schwab (SCHW)** is another financial services stock demonstrating significant upward momentum, with a year-to-date gain of 27%. The firm’s positive outlook is underpinned by 33 upward earnings estimate revisions in the last quarter, reflecting a robust recovery and optimism within the financial sector.
Early in October, BMO Capital Markets initiated coverage of Charles Schwab with an “outperform” recommendation. The firm’s analysis emphasized the inherent strengths of the wealth management business model, citing its ability to combine sustainable growth with low capital intensity – a particularly attractive combination in the current economic environment. BMO Capital Markets analyst Brennan Hawken set a price target of $92 for Charles Schwab, representing a marginal 2% difference from its last closing price. The company is scheduled to release its earnings on Thursday, October 16th, and is expected to benefit from the prevailing positive sentiment surrounding the financial industry.
JPMorgan and Other S&P 500 Firms Eyeing Post-Earnings Upside
JPMorgan Chase (JPM), widely considered an indicator of the U.S. financial system’s health, is also positioned to potentially experience an uplift following its earnings report. Alongside **Travelers (TRV)** and **Interactive Brokers Group (IBKR)**, JPMorgan is part of a cohort of companies that have benefited from multiple upward earnings revisions, signaling strong analyst confidence in their future performance.
The broader outlook for the earnings season remains highly optimistic. The consensus forecast anticipates an 8% year-over-year growth in S&P 500 earnings, which would mark the ninth consecutive period of expansion. Should these companies indeed exceed market expectations, the current market uptrend could be sustained through the remainder of the year.
Michael Zhang is a seasoned finance journalist with a background in macroeconomic analysis and stock market reporting. He breaks down economic data into easy-to-understand insights that help you navigate today’s financial landscape.