Investors will be eagerly awaiting Advanced Micro Devices' (AMD 6.23%) second-quarter earnings report, which will be released after the market closes on Aug. 4.
AMD stock has already jumped by 139% in 2026, as of this writing. A solid set of results and guidance will be essential for AMD to sustain its terrific momentum, especially considering its rich valuation. The good news is that AMD could indeed deliver better-than-expected numbers and robust guidance due to one simple reason.
Image source: The Motley Fool.
The growing tilt toward CPUs in AI data centers will be a tailwind for AMD Artificial intelligence (AI) data centers have primarily relied on graphics processing units (GPUs) to handle workloads so far. That's not surprising, as GPUs have massive parallel processing power, allowing them to process thousands of data points in one go. This has made GPUs ideal for training AI models.
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However, the shift toward inference and agentic AI workloads has brought server central processing units (CPUs) back in demand. Market research firm TrendForce notes that the CPU-to-GPU ratio in AI data centers is between 1:4 and 1:8. That means only one CPU is deployed in AI data centers for every four to eight GPUs. However, agentic AI is bringing that ratio back in favor of CPUs.
TrendForce points out that the CPU-to-GPU ratio in AI data centers could shift toward 1:1 or 1:2, suggesting a 4x increase in server CPU demand to run agentic AI workloads. This shift is creating overwhelming demand for server CPUs, driving up prices. According to one estimate, server CPU prices increased by 10% to 20% between March and April. Importantly, these price rises are expected to continue, with AMD anticipated to hike prices in the second and third quarters of the year.
Moreover, AMD is also gaining volume share in server CPUs. It reportedly controlled a third of the server CPU market in the first quarter of 2026, up from 27.2% in the year-ago period, according to Mercury Research. Its revenue share, however, was much stronger at 46.2%, suggesting that AMD is commanding solid pricing power.
Assuming AMD gains more server CPU market share and sells these processors at higher prices, its growth could exceed expectations. The company has guided for a 46% year-over-year increase in Q2 revenue to $11.2 billion at the midpoint of its guidance range, though don't be surprised to see it doing better than that.
The stock is expensive, but it can justify the valuation AMD trades at a whopping 186 times trailing earnings and 79 times forward earnings. These multiples suggest that the stock may be overpriced right now. However, AMD's ability to outperform analysts' expectations, driven by rapid growth in server CPUs, can help the stock sustain its momentum. The company anticipates the server CPU market to grow at an annual rate of over 35% through 2030, generating over $120 billion in revenue.
The improving margin profile in this segment, driven by higher prices, is likely to drive stronger earnings growth. Not surprisingly, analysts have substantially increased their earnings growth expectations.
Data by YCharts
So, AMD investors can continue holding the stock heading into its earnings report, as the key catalyst discussed in this article could give it a nice shot in the arm when it releases results next month.
Alibaba's US-listed shares rose more than 6% on Wednesday after the Chinese technology giant confirmed that its Qwen artificial intelligence model will power Apple Intelligence features for users in China.
This marks a major milestone in Apple's long-delayed AI rollout in the country.
Apple shares also gained about 1.8%, while Baidu's US-listed stock climbed roughly 2.8% after the company separately confirmed it was also collaborating with Apple on AI features for Chinese iPhone users.
The announcement came after China's cyberspace regulator approved Apple Intelligence for use on iPhones in China, removing one of the biggest regulatory hurdles that had delayed the launch since Apple first unveiled the AI platform in 2024.
China requires all large language models and generative AI services to obtain regulatory approval before they can be offered to the public.
Apple Intelligence and Samsung's Galaxy AI were the only foreign AI services approved in the latest batch.
Domestic smartphone makers Huawei, Oppo, Vivo, Xiaomi and ZTE also received approvals, with ByteDance serving as ZTE's AI partner.
The approval follows months of discussions between Apple and Chinese authorities as geopolitical tensions between Washington and Beijing have intensified over artificial intelligence and advanced technology.
An Alibaba spokesperson confirmed to CNBC that the company's AI model would become part of Apple's ecosystem in China.
"Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and visionOS for users in China," the spokesperson said.
According to Bloomberg, Qwen will enable capabilities including text generation, image generation, and image understanding across Apple's devices without requiring users to switch between separate applications.
"The Apple-Qwen integration gives users the ability to access the model's capabilities, like text and image understanding and generation, without needing to jump between tools," the Alibaba spokesperson added.
Alongside Alibaba, Apple is also collaborating with Baidu to develop AI features tailored for Chinese users.
A Baidu representative told the South China Morning Post that the company was working with Apple on Apple Intelligence features for the Chinese market.
Reuters also reported that Baidu would contribute to Apple's localized AI services.
The dual partnerships underscore Apple's strategy of working with domestic AI leaders to comply with China's regulatory framework while expanding Apple Intelligence outside Western markets.
The announcement comes amid growing competition between Chinese and US artificial intelligence companies.
Earlier this month, Alibaba prohibited employees from using Anthropic's AI models, while US lawmakers have been exploring ways to curb adoption of Chinese AI systems by American companies.
Separately, reports indicated that Meta had been forced to unwind its planned $2 billion acquisition of Chinese AI startup Manus following intervention by Beijing.
The development also coincides with Apple's efforts to improve on-device AI capabilities.
CNBC reported on Tuesday that Apple is in discussions with Silicon Valley startup PrismML, which claims it can compress advanced AI models sufficiently to run directly on iPhones.
PrismML, a Caltech spinout backed by Khosla Ventures, recently released compressed versions of Alibaba's open-source Qwen model, reducing its size from roughly 54 GB to less than 4 GB, allowing the full 27-billion-parameter model to operate on an iPhone 15 or newer device.
Image Credits:Apple (event screenshot) Apple Intelligence, the iPhone maker’s generative AI offering, is coming to China. On Wednesday, Reuters reported that China’s regulator, the Cyberspace Administration of China, approved Apple’s AI services in the country, on the back of a deal to integrate Alibaba’s Qwen AI model into Apple’s operating systems, including iOS, iPadOS, macOS, and visionOS.
The deal, which was rumored to be in the works last year, marks an important step for Apple’s AI ambitions in a key market. In the second quarter, Apple sales in Greater China increased 28% to $20.5 billion. Apple also recently regained the No. 2 position in China’s smartphone market after a recent shopping festival offered discounts on the iPhone lineup.
Prior to working with Alibaba, Apple was reportedly exploring a deal with Baidu, but faced issues adapting its models for Chinese customers. It also explored integrations with DeepSeek and with models from ByteDance, reports claimed. This led to delays in getting Apple Intelligence features, which debuted in 2024, to the Chinese market.
Alibaba confirmed the company’s news to CNBC in a statement, saying that Qwen would be “integrated into Apple Intelligence experiences,” but did not provide a timeframe. It also said the integrations would involve AI capabilities like “text and image understanding and generation.”
U.S. shares of Alibaba rose 4% in pre-market trading on news of the deal, and are now up by over 6%, as of the time of publication.
Key Takeaways NIKE is improving inventory quality, wholesale growth and margins as its turnaround progresses.adidas is benefiting from healthy demand, controlled discounting and improving profitability.NIKE's FY27 EPS is projected to rise 11.4%, while adidas' 2026 EPS may grow 29.9%. The global athletic footwear and apparel market has long been defined by one of the fiercest rivalries in consumer goods — NIKE Inc. (NKE - Free Report) versus adidas AG (ADDYY - Free Report) . Together, the two sportswear powerhouses command the industry's largest global market shares, leveraging iconic brands, innovation-driven product portfolios, and expansive retail and digital ecosystems to stay ahead of the competition. Nike continues to hold the top position in athletic footwear and apparel worldwide, while adidas has strengthened its standing with renewed momentum across performance sports and lifestyle categories, particularly in footwear.
Although both companies operate in the same core businesses of athletic footwear, apparel and accessories, their paths to leadership differ. NIKE has built its dominance through unmatched scale, athlete endorsements, direct-to-consumer expansion and continuous product innovation. Meanwhile, adidas has blended performance credibility with cultural relevance, capitalizing on strong franchises in football, running and Originals to expand its global footprint.
As consumer preferences evolve and competition intensifies, the battle between these two industry leaders is increasingly about protecting market share while capturing the next wave of growth. In this face-off, we compare NIKE and adidas to determine which sportswear giant offers the stronger competitive position for investors today.
The Case for NIKENIKE remains the world’s largest athletic footwear and apparel company, commanding an estimated share of more than 40% of the global athletic footwear market and maintaining unmatched brand equity across performance sports. Its powerful brand equity is supported by a portfolio spanning Nike, Jordan and Converse, and leadership across running, basketball, football and lifestyle categories. Still, its turnaround faces strain. Sportswear and Jordan Streetwear, together representing roughly half of revenues, remain weak amid softer traffic, discounting and pressured discretionary spending.
Management acknowledged that macroeconomic pressures and sluggish traffic have delayed the top-line recovery, even as performance categories continue to outperform.
NIKE is rebuilding its competitive edge through its “Win Now” priorities and Sport Offense model, reorganizing more than 8,000 employees into sport-focused teams. The strategy is already delivering measurable results. Running has posted five consecutive quarters of double-digit growth, adding nearly $1 billion in revenues over that period, while NIKE gained five percentage points of market share in statement running footwear across North America and Western Europe, outperforming every other major competitor.
Financially, the turnaround remains a work in progress. Fiscal 2026 revenues were flat, while restructuring, tariffs and elevated investment pressured earnings. However, encouraging signs are emerging. The gross margin has stabilized, inventory quality has improved, wholesale revenues returned to growth, North America continues to lead the recovery and management expects margin expansion to begin before meaningful sales acceleration. The company is also aggressively tightening inventory, reducing promotions and repositioning its digital business as a premium channel to restore pricing power.
The Case for ADDYYadidas has re-established itself as a powerful global sportswear challenger, supported by renewed brand heat, disciplined execution and a broad portfolio spanning footwear, apparel and accessories. Its strength extends across football, running, training, motorsport and lifestyle, reducing the dependence on any single category. Management’s “global brand with a local mindset” approach gives regional teams greater freedom to tailor products, campaigns and retail experiences to local tastes, improving relevance across diverse markets.
The company is also balancing performance credibility with cultural appeal. Running innovation, football leadership and training products strengthen its connection with athletes, while Originals, Sportswear and collaborations attract younger, fashion-conscious consumers, particularly women. Iconic franchises such as Samba and Gazelle remain important, but adidas is expanding beyond retro styles through fresh silhouettes, comfort technologies and locally inspired apparel. Its digital platforms have become more effective at presenting newness quickly and adapting assortments to regional demand.
adidas is benefiting from healthy consumer demand, controlled discounting and improving profitability. Direct retail and e-commerce momentum demonstrate strong brand engagement, while management continues to protect pricing rather than chase low-quality wholesale growth. Currency pressure, tariffs, geopolitical disruption and heavy industry promotions remain risks, but adidas’ innovation pipeline, localized strategy and improving operating discipline support a compelling investment case.
How Does the Zacks Consensus Estimate Compare for NKE & ADDYY?The Zacks Consensus Estimate for NIKE’s fiscal 2027 sales implies a year-over-year decline of 0.2%, while that for EPS indicates growth of 11.4%. The EPS estimate has moved down 2.8% in the past 30 days.
NKE’s Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for adidas’ 2026 sales and EPS suggests year-over-year growth of 10.7% and 29.9%, respectively. The EPS estimate has moved down by a penny in the past 30 days.
ADDYY’s Estimate Revision Trend
Image Source: Zacks Investment Research
This clearly illustrates that both NIKE and adidas have witnessed downward estimate revisions in the past month.
Price Performances & Valuations of NKE & ADDYYIn the past three months, NIKE shares have declined 6.2%, while adidas has gained 22.1%.
Image Source: Zacks Investment Research
NIKE is trading at a forward price-to-sales (P/S) multiple of 1.36X, below its median of 2.77X in the last five years. adidas’ forward P/S multiple sits at 1.13X, below its median of 1.43X in the last five years.
Image Source: Zacks Investment Research
NKE vs. ADDYY: Which Is the Better Bet Now?Both NIKE and adidas possess iconic brands, global scale and long-term growth opportunities, but their investment trajectories currently differ. NIKE is laying the groundwork for a turnaround, yet the recovery remains in its early stages, with earnings and revenues still under pressure.
adidas, by contrast, is executing from a position of strength, supported by broad-based growth, improving profitability and sustained market share gains. Its shares have significantly outperformed NIKE in the past three months while trading at a lower forward price-to-sales multiple, offering a more attractive valuation.
The magnitude of recent earnings estimate revisions has been less severe for adidas, reflecting relatively stronger analyst confidence. Taken together, adidas appears to offer the more compelling risk-reward profile for investors at this stage.
ADDYY currently carries a Zacks Rank #3 (Hold), while NKE has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Stock Market Jumps As Inflation Eases; IBM Warns, But Chip, Security Software Names Fly Nvidia (NVDA) stock is approaching a proper buy point as the artificial intelligence chip leader received some reassuring news this week. On Tuesday, Nvidia stock closed above its 50-day moving average line, a key support level, for the second time in the last three trading sessions. In morning trades on the stock market today, Nvidia stock hovered above that important…
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Nvidia (NVDA - Free Report) Santa Clara, CA-based NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphics processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence (AI) based solutions that now support high-performance computing (HPC), gaming and virtual reality (VR) platforms.
NVDA is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Computer and Technology stock. NVDA has a Momentum Style Score of B, and shares are up 2.1% over the past four weeks.
17 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.97 to $9.10 per share. NVDA boasts an average earnings surprise of +5.5%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, NVDA should be on investors' short list.
Nvidia (NVDA - Free Report) closed the last trading session at $211.8, gaining 2.1% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $302.55 indicates a 42.9% upside potential.
The mean estimate comprises 48 short-term price targets with a standard deviation of $52.91. While the lowest estimate of $180.00 indicates a 15% decline from the current price level, the most optimistic analyst expects the stock to surge 136.1% to reach $500.00. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
But, for NVDA, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Why NVDA Could Witness a Solid UpsideThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current year, three estimates have moved higher over the last 30 days compared to no negative revision. As a result, the Zacks Consensus Estimate has increased 1.2%.
Moreover, NVDA currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much NVDA could gain, the direction of price movement it implies does appear to be a good guide.
Speaking on the sidelines of a developer event in Tokyo, NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) CEO Jensen Huang pushed back hard on a research report claiming his next flagship product line was slipping. “Vera Rubin is already in production. Giant amounts of production incoming,” Huang told reporters, rejecting delay concerns and dismissing a SemiAnalysis post that suggested a specialized circuit board issue could push the next-generation AI server rack into 2028.
That single word, “giant,” matters. It is the CEO staking his credibility on a product cycle that Wall Street has already begun pricing into forward numbers.
What Rubin Has to Live Up To The bar Blackwell already set is extraordinary. Nvidia’s Q1 FY2027 revenue hit $81.615 billion, up 85.2% year over year, with Data Center alone contributing $75.246 billion and Networking revenue rising 199% YoY. Non-GAAP gross margin came in at 75.0%, and free cash flow reached $48.554 billion in the quarter.
Huang framed the buildout as generational: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” He added that “We have more orders today than we did at the last time I spoke about orders at GTC” and that NVIDIA will “keep our supply chain quite busy for several many more years coming.”
Supply commitments help explain Nvidia’s confidence. The company has $119.0 billion tied to supply-related commitments and is guiding for $91.0 billion in Q2 revenue, a forecast that excludes any China Data Center compute sales. Meanwhile, H200 shipments to China and Hong Kong have reportedly begun after U.S. officials cleared roughly 10 Chinese companies to buy the chips, but deliveries remain minimal so far.
The Rubin Pricing Bombshell The delay narrative that surfaced in early July collided with a more bullish Wall Street read this morning: Morgan Stanley raised its Vera Rubin rack-system price assumption to about $49 billion per gigawatt, implying materially higher customer spending per deployment than Blackwell.
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In NVIDIA’s fiscal Q4 commentary, Huang said “Vera Rubin will extend that leadership even further” on cost per token. The distinction matters: customers may pay more upfront for Rubin systems if the platform lowers the cost of running AI models at scale. If pricing power holds and volumes are truly “giant,” the mix shift lifts NVIDIA’s average selling price base heading into fiscal 2028.
Manufacturing partner Taiwan Semiconductor Manufacturing (NYSE:TSM) is signaling similarly robust demand. June revenue jumped 67.9% YoY to NT$442.68 billion, and TSMC is adding three new advanced packaging facilities in Chiayi Science Park Phase II to relieve CoWoS bottlenecks.
Valuation Math NVDA trades at $211.54, with a trailing P/E of 32x and a forward P/E of 24x. The consensus analyst target sits at $301.62, with 48 Buy and 10 Strong Buy ratings against just 2 Holds.
Prediction markets are more restrained, pricing a 73% probability NVDA hits $216 in July but only 31.5% odds of a $220+ close. If Huang’s “giant” volumes materialize on Rubin at Morgan Stanley’s higher ASPs, current forward estimates likely understate FY2028 earnings power.
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Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) CEO Jensen Huang has pushed back against reports that the company’s next-generation Vera Rubin AI accelerator platform is facing manufacturing setbacks, saying production is already underway.
Speaking with reporters at a developer event in Tokyo on Wednesday, Huang dismissed the reports and stated that “Vera Rubin is already in production. Giant amounts of production incoming,” according to Bloomberg.
His comments followed a report from research firm SemiAnalysis that Nvidia’s Vera Rubin AI server rack system, including its Kyber rack platform, was facing delays due to challenges manufacturing a specialized circuit board used to connect electronic modules.
Nvidia has denied that its roadmap has been pushed back, with a company spokesperson saying the Vera Rubin platform remains on track. The report had raised concerns among investors that delays could give rivals such as Advanced Micro Devices more time to advance its competing MI350 and MI400 AI accelerator offerings.
SemiAnalysis is known for its analysis of Nvidia’s supply chain and AI infrastructure, making its report notable among industry observers.
Huang’s comments provide the company’s first direct public response to the claims, with the CEO emphasizing that production volumes are ramping as planned.
Shares of Nvidia were down about 1% late morning on Wednesday.
The market expects AT&T (T - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 22, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis telecommunications company is expected to post quarterly earnings of $0.59 per share in its upcoming report, which represents a year-over-year change of +9.3%.
Revenues are expected to be $32.1 billion, up 4.1% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 1.28% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for AT&T?For AT&T, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +4.83%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that AT&T will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that AT&T would post earnings of $0.55 per share when it actually produced earnings of $0.57, delivering a surprise of +3.64%.
Over the last four quarters, the company has beaten consensus EPS estimates three times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
AT&T appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
An Industry Player's Expected ResultsAmong the stocks in the Zacks Wireless National industry, AT&T (T - Free Report) , is soon expected to post earnings of $0.59 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +9.3%. This quarter's revenue is expected to be $32.1 billion, up 4.1% from the year-ago quarter.
The consensus EPS estimate for AT&T has been revised 1.3% higher over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +4.83%.
When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that AT&T will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
There are a couple of good reasons to consider buying Netflix (NFLX +0.97%) ahead of this week's second-quarter financial update. It continues to operate the world's leading premium streaming service. More than just a stateside phenomenon, it now generates more than half of its revenue internationally.
Netflix has grown despite initiating modest membership price hikes almost every year. It uses its economies of scale to spend more on content than its smaller rivals, knowing it can divide that over its global audience of more than 325 million homes. However, the best reason to own Netflix ahead of Thursday afternoon's reveal of fresh financials is its stock chart.
Image source: Getty Images.
Starting lines matter As the owner of one of the more surprising performance charts, Netflix shares have plummeted 42% over the past year. Netflix stock is now trading at 24 times trailing earnings, its lowest multiple ever outside the market's overall sell-off in 2022.
Trailing revenue and earnings have never been higher, with double-digit percentage growth on both ends of the income statement. Consolidation in the industry -- even with Netflix failing to gobble up any of the smaller rivals that have hit the market -- should benefit the platform. Fewer players make it easier to avoid price wars from cutthroat competition.
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The caveats are real. Netflix took a hit after its previous quarterly update. Revenue growth is slowing, and there are some near-term margin challenges. However, Netflix has been a volatile stock in its two dozen years of trading. Until now, it has recovered from every steep correction.
It also helps that market expectations are low when a company is out of favor heading into earnings season. Netflix still has a lot to prove, but as the leading provider of premium streaming video entertainment, it knows how to fashion a Hollywood ending when it needs it the most.
Rick Munarriz has positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.
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Netflix co-CEO Ted Sarandos and YouTube CEO Neal Mohan. Noam Galai/JP Yim/Getty Images. Can Netflix become YouTube before YouTube can become Netflix?
The two apps are starting to look a lot more alike as Netflix chases creator content, podcasts, and short-form video, and YouTube pitches itself as a destination for TV advertisers and Emmy-worthy shows. They are also both diving into live sports.
The top streamers are all trying to create a "super app," said Scott Purdy, a media sector leader at the consulting firm KPMG US.
"They're just trying to pick off the best things, whether that's creator-driven stuff, whether that's games, whether that's better customization around advertising, to create an ecosystem that you never have to leave," he said.
The pair is even dueling over awards shows — Netflix is streaming The Actor Awards (formerly the Screen Actors Guild Awards), while YouTube is set to host the Oscars beginning in 2029.
The battle for attention doesn't come cheap.
Netflix and YouTube are spending billions of dollars a year on content, either through production and licensing deals or advertising-revenue sharing, as they duke it out for the top spot in Nielsen's monthly ranking of US TV viewership.
As content becomes less differentiated, the companies that do a better job at customizing the viewing experience will have an edge, said Frank Albarella, a US media and telecommunications leader at KPMG US.
"What do you see when you fire up your homepage?" he said. "Are they doing a good job at pointing it to certain things? That's always important."
Price will matter too, he added.
Right now, that's a key difference between paid Netflix and free YouTube. (Though YouTube has a paid, ad-free version, and there are periodic rumblings in the analyst community that Netflix should launch a free tier.) There's also the fact that Netflix pays money up front for content, while YouTube splits ad revenue with creators.
These differences have led Netflix to own higher-budget, scripted TV, while YouTube dominates influencer content and the long tail.
Both have been signaling their desire to make inroads into each other's traditional turf, however — though the extent to which they'll be successful remains to be seen.
The streaming wars are now a head-to-head fightA decade ago, few would have guessed that Netflix and YouTube would be the final showdown in the streaming wars. Netflix's co-CEO Ted Sarandos said in 2013 that the company's goal was "to become HBO faster than HBO can become us."
Back then, Netflix didn't have an advertising business. Today, it knows its biggest task is to drive watch time. The company's North Star has shifted to "engagement," which it has called the "best proxy for customer satisfaction."
Sarandos told investors last year that the streamer is the best place for premium content "as defined by fans," not critics. It isn't HBO tastemakers that are driving the bulk of TV viewing. Many spend their time in social feeds, watching influencers bake bread or do trick shots on basketball courts. Just under half of Gen Z and millennial viewers consider watching social media videos to be the same as watching TV, according to a Deloitte report from last year.
To win, Netflix is looking to offer a mix of cable TV, TikTok, and YouTube-style fare. It's not alone. Other streamers seem to be realizing they need to offer more in their apps to compete. Disney and Paramount are exploring short-form video feeds and free tiers to expand their audiences and drive up engagement.
"These streaming platforms and the social platforms are moving towards the same center of gravity," Albarella said. "We call it a battle for audience attention or engagement, and almost like a new category called creator-driven television."
This month, Netflix said it's adding three to 20-minute videos from the likes of Bon Appétit, Variety, and Cosmopolitan — the type of short content that people binge-watch on YouTube. It's adding new videos from YouTube creators The Stokes Twins, Rhett and Link, the food influencer Meredith Hayden, and other social stars like Salish and Jordan Matter.
YouTube, meanwhile, is now letting creators organize their videos in TV-style series, offering seasons and episodes for viewers to burn through. The company said more users watch YouTube on television than on computers or phones, and it's pitching shows from top creators like Kareem Rahma to advertisers as TV buys.
Ultimately, all the media and social platforms have the same goal: to keep us watching.
"There's only so many hours in a day, and everyone is competing for amounts of attention," Purdy said. "They're all trying to figure out how to monetize that attention effectively."
The biggest question mark is the future of prestige scripted content. YouTube has traditionally struggled in this area, but if younger generations spend less time watching it, that might cease to be such an edge for Netflix.
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Only through the end of September, bp is offering new bp rewards Visa® cardmembers 50¢ off per gallon1 at bp and Amoco stations for the first 60 days, and 15¢ off per gallon1 after that. Introductory offer is for new accounts opened by Sept. 30, 2026.The card has no annual fee2 and offers unlimited rewards potential with no cap on spending categories.All bp rewards Visa® cardmembers will also see a wider range of redemption options.
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JPMorgan Chase & Co. (NYSE:JPM) posted better-than-expected earnings for the second quarter on Tuesday.
The bank reported adjusted earnings of $6.14 per share, topping the consensus estimate of $5.79. Managed revenue rose to $58.02 billion, ahead of analysts’ expectations of $50.20 billion.
JPMorgan raised its 2026 net interest income outlook to about $105.5 billion from $103 billion previously, or about $96.5 billion excluding Markets, up from its prior forecast of $95 billion. The bank also lowered its projected 2026 card services net charge-off rate to about 3.2% from 3.4%
JPMorgan shares rose 0.5% to trade at $344.59 on Wednesday.
These analysts made changes to their price targets on JPMorgan following earnings announcement.
Considering buying JPM stock? Here’s what analysts think:
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Investors interested in Finance stocks should always be looking to find the best-performing companies in the group. Has JPMorgan Chase & Co. (JPM - Free Report) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.
JPMorgan Chase & Co. is one of 880 individual stocks in the Finance sector. Collectively, these companies sit at #5 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. JPMorgan Chase & Co. is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for JPM's full-year earnings has moved 2.5% higher within the past quarter. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Our latest available data shows that JPM has returned about 6.4% since the start of the calendar year. Meanwhile, stocks in the Finance group have gained about 6.4% on average.
Another stock in the Finance sector, BancFirst (BANF - Free Report) , has outperformed the sector so far this year. The stock's year-to-date return is 8.5%.
For BancFirst, the consensus EPS estimate for the current year has increased 3.6% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, JPMorgan Chase & Co. belongs to the Financial - Investment Bank industry, a group that includes 22 individual companies and currently sits at #53 in the Zacks Industry Rank. On average, stocks in this group have gained 11.2% this year, meaning that JPM is slightly underperforming its industry in terms of year-to-date returns.
BancFirst, however, belongs to the Banks - Southwest industry. Currently, this 20-stock industry is ranked #45. The industry has moved +12% so far this year.
Investors with an interest in Finance stocks should continue to track JPMorgan Chase & Co. and BancFirst. These stocks will be looking to continue their solid performance.
Walmart (NYSE:WMT | WMT Price Prediction) and Johnson & Johnson (NYSE:JNJ) just delivered results that show two defensive giants pulling on very different levers.
Walmart posted $175.68 billion in Q1 FY27 revenue with omnichannel firing on all cylinders. J&J leaned on its pharma pipeline to grow Q1 2026 sales 9.9%. Both beat estimates. The playbooks could hardly look more different.
Retail Flywheel Meets Pharma Firepower Walmart’s quarter was a story of stickiness turning into leverage. U.S. comp sales rose 4.1% ex-fuel on 3.0% transaction growth, and global eCommerce jumped 26%, now 23% of sales. Advertising climbed 37%, and marketplace sales surged nearly 50%, the best in ten quarters.
Upper-income households keep trading in, and CEO John Furner credited “innovative technologies, driving productivity through automation, and growing higher-margin commerce solutions.” Free cash flow turned negative at -$1.95 billion as capex jumped 34%. That signals investment in future throughput capacity.
J&J’s engine ran on drugs. Innovative Medicine rose 11.2% to $15.43 billion, with DARZALEX at $3.96 billion (+22.5%) and TREMFYA up 68.3%, absorbing the STELARA biosimilar shock. MedTech added 7.7%, led by cardiovascular. CEO Joaquin Duato called the pipeline “unrivaled,” pointing to fresh approvals like ICOTYDE and VARIPULSE Pro.
One Widens The Store. One Prunes The Portfolio. Lens Walmart J&J Core Bet Omnichannel + ads Oncology and immunology drugs Growth Engine eCommerce +26% TREMFYA +68.3% Key Vulnerability Tariffs, fuel (250 bps hit) STELARA erosion (-59.7%) Capital Move New $30B buyback 64th straight dividend hike Walmart is widening: more delivery, more marketplace sellers, more ad inventory through VIZIO.
J&J is narrowing, planning a DePuy Synthes orthopaedics spinoff within 18 to 24 months and pouring over $1 billion into cell therapy manufacturing. Different visions of defense.
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The Next Test Is Whether Consumers Hold Up With University of Michigan consumer sentiment at 44.8, near recessionary territory, I want to see whether Walmart’s upper-income share gains survive a broader pullback.
J&J faces a nearer catalyst: prediction markets currently price a 92.5% probability of a Q2 EPS beat, with Innovative Medicine consensus clustering around $16.2 to $16.65 billion. Guidance was already raised to $11.45 to $11.65 adjusted EPS for the year.
Why I Lean Toward J&J At These Prices Both are quality. You are paying very differently for them.
Walmart trades at a trailing P/E of 40 with a 0.85% yield, while J&J sits near 30 with a 2.01% yield and 21.8% profit margins versus Walmart’s 3.14%.
J&J shares are already up 25.56% year to date, and I still find the pipeline math more compelling than paying 39 times forward earnings for a retailer with negative free cash flow this quarter. Walmart offers brand-driven compounding for investors patient with tariff noise. J&J’s combination of yield, margins, and pipeline stands out at these valuations.
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This Dividend ETF Choice Could Shape Your Income Strategy Through 2026Johnson & Johnson NYSE: JNJ raised its full-year 2026 outlook after reporting second-quarter sales growth that management said was supported by strength in Innovative Medicine, new product launches and a broad portfolio that helped offset continued pressure from STELARA biosimilar competition.
Chairman and Chief Executive Officer Joaquin Duato said the company delivered a “Q2 beat on the top and bottom line and raised guidance,” describing 2026 as a year of accelerated growth for Johnson & Johnson. The company reported worldwide quarterly sales of $25.3 billion, up 5.6% operationally. Excluding STELARA, Duato said Johnson & Johnson grew double digits in the quarter.
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3 Stocks Doing the Heavy Lifting in Healthcare’s ReboundRyan Kurz, Vice President of Investor Relations, said U.S. sales rose 7.3%, while sales outside the U.S. increased 3.4%. Net earnings were $5.5 billion, and diluted earnings per share were $2.27, compared with $2.29 a year earlier. Adjusted net earnings were $7.1 billion, with adjusted diluted EPS of $2.90, up 4.7% from the second quarter of 2025.
Innovative Medicine Leads Growth Innovative Medicine sales totaled $16.4 billion, up 6.8% operationally, despite what Kurz described as an approximately 760-basis-point headwind from STELARA. The division posted 8.9% growth in the U.S. and 3.6% growth outside the U.S.
3 Dividend Kings That Earn Their Crown Every QuarterDuato said the Innovative Medicine business had eight brands growing double digits. In oncology, DARZALEX remained the company’s largest product, with quarterly sales of more than $4 billion and growth of 17.6%, driven by share gains and market growth in multiple myeloma. CARVYKTI grew 47.7%, TECVAYLI grew 56.1% and TALVEY grew 62.6%.
In lung cancer, RYBREVANT plus LAZCLUZE grew 61.6%, supported by launch uptake across regions and share gains in first- and second-line settings. ERLEADA grew 7.6% in prostate cancer, with share gains and market growth partly offset by unfavorable patient mix and inventory dynamics.
In immunology, TREMFYA delivered 71% growth. Duato said it remains the fastest-growing advanced therapy in both Crohn’s disease and ulcerative colitis. STELARA declined 55.7%, reflecting biosimilar competition, adoption of newer treatment classes and unfavorable patient mix.
Jennifer Taubert, Executive Vice President and Worldwide Chairman, Innovative Medicine, said during the question-and-answer session that TREMFYA reached its first $2 billion quarter. She said the product is leading new patient starts, or induction share, among IL-23 therapies in both ulcerative colitis and Crohn’s disease.
Launches Gain Traction Management highlighted early momentum for ICOTYDE, INLEXZO and other newer products. Duato said more than 10,000 patients had initiated therapy on ICOTYDE since launch, citing demand for a once-daily oral psoriasis treatment. In the Q&A, Taubert updated that figure to 11,000 patients, with more than 18,000 prescriptions written and 6,000 unique prescribers. She said commercial coverage had surpassed 50% within 90 days, ahead of company projections.
Taubert said ICOTYDE is being positioned as a first-choice systemic treatment for psoriasis patients moving beyond topical therapy, while TREMFYA is being positioned as a first-choice biologic, particularly for patients with or at risk of psoriatic arthritis. John Reed, Executive Vice President, Innovative Medicine Research and Development, said pivotal data for ICOTYDE in psoriatic arthritis are expected later this year, with phase 3 studies in ulcerative colitis and Crohn’s disease underway.
For INLEXZO in bladder cancer, Duato said nearly one in three eligible patients started on an INLEXZO regimen during the second quarter, and new patient insertions grew about 75% from the prior quarter. Taubert said the product is outperforming recent competitive launches in the U.S. and more than doubled sales from the first quarter, though the company is not yet reporting quarterly sales for the product.
MedTech Growth Slows in Cardiovascular MedTech sales were $8.9 billion, up 3.6% operationally, with growth across cardiovascular, surgery and vision. Kurz said cardiovascular grew 3.1%, below recent trends, due mainly to headwinds in electrophysiology and Abiomed.
Electrophysiology grew 3.1%, supported by procedure growth, commercial execution and new products, but partially offset by competitive pressure in pulsed field ablation and an estimated 400-basis-point negative impact from China inventory. Duato said VARIPULSE, the company’s pulsed field ablation platform for atrial fibrillation, has treated more than 85,000 patients worldwide.
Abiomed declined 2% as U.S. procedure pressures weighed on heart recovery. Tim Schmid, Executive Vice President and Worldwide Chairman, MedTech, said in the Q&A that the slowdown followed a neutral clinical trial in the U.K. focused on high-risk PCI, which led physicians to become more selective. Schmid characterized the issue as behavioral rather than structural and said the company is engaging with physicians while awaiting PROTECT IV data expected in 2027.
Surgery grew 2.3%, vision grew 5.6% and orthopedics grew 4.2%. Schmid said three of the four MedTech businesses — surgery, vision and orthopedics — accelerated in the quarter and performed above expectations. He also said the company is not seeing evidence of a broad-based slowdown in procedure volumes across its portfolio.
Guidance Raised for 2026 Chief Financial Officer Joe Wolk said Johnson & Johnson ended the quarter with about $21 billion in cash and marketable securities and about $49 billion of debt, resulting in a net debt position of about $28 billion. Year-to-date free cash flow totaled approximately $8.7 billion, and Wolk said the company remains on track for full-year free cash flow approaching $21 billion.
Wolk raised full-year operational sales growth guidance by $400 million, now expecting growth of 6.5% to 7.1%, with a midpoint of $100.6 billion. Including currency, reported sales growth is expected to be 7.0% to 7.6%, with a midpoint of $101.1 billion. The company’s 2026 calendar includes a 53rd week, which Wolk said provides an approximately 100-basis-point benefit.
Adjusted operational EPS is now expected to range from $11.50 to $11.65, an $0.18 increase at the midpoint. Reported EPS is projected at $11.60 to $11.75. Wolk said the updated outlook reflects second-quarter performance, uptake of new launches, operating efficiencies and anticipated reduction and recoupment of certain tariff-related costs.
Wolk also said the company’s outlook does not include the impact of pending acquisitions such as Firefly Bio, which Johnson & Johnson expects to close in the third quarter. Duato said the planned acquisition would add another antibody platform and strengthen the company’s next-generation oncology pipeline.
Pipeline and Portfolio Updates Management pointed to several second-half catalysts, including potential FDA approval of IMAAVY for warm autoimmune hemolytic anemia and data readouts for TECVAYLI with TALVEY, pasritamig, J&J 6143, INLEXZO, ICOTYDE and CAPLYTA. In MedTech, expected catalysts include launches tied to electrophysiology, Shockwave catheters, the OTTAVA robotic surgical system, ETHICON 4000 and vision products.
Wolk said the company continues to evaluate separation options for DePuy Synthes and remains on track for a mid-2027 separation. Duato closed the call by saying Johnson & Johnson’s growth momentum is expected to carry into the second half of 2026 and 2027, with the company maintaining its ambition for double-digit growth by the end of the decade.
About Johnson & Johnson NYSE: JNJJohnson & Johnson is a multinational healthcare company headquartered in New Brunswick, New Jersey, that develops, manufactures and markets a broad range of products across pharmaceuticals, medical devices and previously consumer health. Founded in 1886 by the Johnson family, the company has grown into a global healthcare organization with operations and sales in many countries around the world.
The company's pharmaceuticals business, organized largely under its Janssen research and development organization, focuses on prescription medicines across therapeutic areas such as immunology, infectious disease, oncology and neuroscience.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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For the quarter ended June 2026, Johnson & Johnson (JNJ - Free Report) reported revenue of $25.31 billion, up 6.6% over the same period last year. EPS came in at $2.90, compared to $2.77 in the year-ago quarter.
The reported revenue represents a surprise of +0.53% over the Zacks Consensus Estimate of $25.18 billion. With the consensus EPS estimate being $2.84, the EPS surprise was +2.11%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Johnson & Johnson performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Organic Sales Growth (Operational growth): 5.6% compared to the 6.3% average estimate based on three analysts.Sales- Innovative Medicine- Oncology- CARVYKTI- WW: $657 million compared to the $640.24 million average estimate based on three analysts. The reported number represents a change of +49.7% year over year.Sales- Innovative Medicine- Neuroscience- SPRAVATO- WW: $584 million versus the three-analyst average estimate of $575.14 million. The reported number represents a year-over-year change of +41.1%.Sales- International: $10.78 billion compared to the $10.75 billion average estimate based on three analysts. The reported number represents a change of +5.7% year over year.Sales- MedTech- Cardiovascular- Electrophysiology- WW: $1.53 billion compared to the $1.58 billion average estimate based on three analysts. The reported number represents a change of +4.4% year over year.Sales- MedTech- Total: $8.93 billion compared to the $8.96 billion average estimate based on four analysts. The reported number represents a change of +4.5% year over year.Sales- Innovative Medicine- WW: $16.38 billion versus $16.16 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +7.8% change.Sales- MedTech- Orthopaedics- Trauma- WW: $827 million versus the three-analyst average estimate of $802.59 million. The reported number represents a year-over-year change of +7.7%.Sales- MedTech- Orthopaedics- Spine, Sports & Other- WW: $740 million compared to the $736.49 million average estimate based on three analysts. The reported number represents a change of +1.8% year over year.Sales- MedTech- Surgery- Advanced- WW: $1.19 billion compared to the $1.19 billion average estimate based on three analysts. The reported number represents a change of +2.2% year over year.Sales- MedTech- Surgery- WW: $2.65 billion versus the three-analyst average estimate of $2.61 billion. The reported number represents a year-over-year change of +3.8%.Sales- Innovative Medicine- Cardiovascular / Metabolism / Other- Other- WW: $225 million versus $242.01 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -27.2% change.View all Key Company Metrics for Johnson & Johnson here>>>
Shares of Johnson & Johnson have returned +7.9% over the past month versus the Zacks S&P 500 composite's +1.6% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Johnson & Johnson (NYSE:JNJ) reported better-than-expected second quarter results and raised its full-year 2026 outlook, as strong pharmaceutical sales helped offset headwinds from products facing patent competition.
The healthcare company posted adjusted earnings per share of $2.90 for the quarter, ahead of the Wall Street consensus estimate of $2.85.
Revenue rose 6.6% year over year to $25.31 billion, exceeding analysts' expectations of $25.05 billion.
Net earnings were $5.53 billion, or $2.27 per diluted share, compared with $5.54 billion, or $2.29 per share, a year earlier. Adjusted net earnings increased 5.7% to $7.08 billion.
The Innovative Medicine segment remained the primary growth driver, with sales rising 7.8% to $16.38 billion, above expectations of approximately $16.1 billion. MedTech sales increased 4.5% to $8.93 billion.
Among individual products, immunology drug Tremfya generated $2 billion in sales, up 72.5% from a year earlier and above analyst estimates of $1.74 billion. Cancer therapy Darzalex also contributed to growth, helping offset the impact of patent expirations affecting older medicines such as Stelara.
Following the stronger-than-expected quarter, Johnson & Johnson (NYSE:JNJ) increased its full-year 2026 guidance. The company now expects reported sales of $100.8 billion to $101.4 billion, with a midpoint of $101.1 billion, and adjusted earnings per share of $11.60 to $11.75, compared with its previous outlook. The updated adjusted EPS guidance has a midpoint of $11.68.
Johnson & Johnson (NYSE:JNJ) also reported year-to-date free cash flow of approximately $8.7 billion, up from $6.21 billion in the prior-year period.
Joaquin Duato, Johnson & Johnson’s CEO, highlighted the company's innovation pipeline, noting recent approvals for Tremfya in active psoriatic arthritis, Caplyta for preventing relapse in schizophrenia, and the Dual Energy ThermoCool SmartTouch SF platform, alongside positive clinical data for several oncology and surgical programs.
“With raised guidance and quarterly sales surpassing $25 billion, we are on track to meet our 2026 target of more than $100 billion in annual revenue for the first time in our Company’s 140-year history,” Duato said.
Shares of Johnson & Johnson were little changed at $253 following the release of its earnings.
Johnson & Johnson delivered strong Q2 2026 results, with 6.6% annual revenue growth and robust performance across Pharma and MedTech divisions. JNJ maintains mid-to-high single digit revenue growth, a portfolio of 15+ "blockbuster" drugs, and a solid pipeline, supporting its blue-chip status. I am downgrading JNJ from Strong Buy to Buy due to valuation normalization and tempered forward share price expectations, despite continued operational strength.
Key Takeaways J&J beat Q2 earnings and sales estimates and raised its 2026 sales and adjusted EPS outlook.JNJ's Innovative Medicine growth was led by Darzalex, Tremfya and newer drugs despite Stelara LOEJ&J's MedTech sales rose year over year but slightly missed estimates despite broad-based growth. Johnson & Johnson’s (JNJ - Free Report) second-quarter 2026 earnings came in at $2.90 per share, which beat the Zacks Consensus Estimate of $2.84. Earnings rose 4.7% from the year-ago period.
Adjusted earnings exclude intangible amortization expense and special items. Including these items, reported earnings were $2.27 per share, down 0.9% year over year.
Sales of this drug and medical devices giant came in at $25.3 billion, which marginally beat the Zacks Consensus Estimate of $25.2 billion.
Sales rose 6.6% from the year-ago quarter, reflecting an operational increase of 5.6% and a positive currency impact of 1.0%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 5.7% on an operational basis.
Second-quarter sales in the domestic market rose 7.3% to $14.53 billion. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, domestic sales rose 7.4% in the quarter.
International sales rose 5.7% on a reported basis to $10.8 billion, reflecting an operational increase of 3.4% and a positive currency impact of 2.3%. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, international sales rose 3.5% in the quarter.
JNJ’s Innovative Medicine Sales Maintain MomentumInnovative Medicine sales rose 7.8% year over year to $16.38 billion. Operational sales increased 6.8%, while adjusted operational growth was 6.9%. U.S. sales advanced 8.9%, and international sales increased 6% on a reported basis. Innovative Medicines sales slightly beat the Zacks Consensus Estimate of $16.16 billion.
Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth. These gains were partly offset by lower sales of Stelara, Remicade, Imbruvica and Zytiga.
Sales of blockbuster multiple myeloma medicine Darzalex rose 18.9% to $4.21 billion in the quarter. Sales beat the Zacks Consensus Estimate of $4.16 billion.
Imbruvica sales declined 18.6% to $599 million. Rising competitive pressure in the United States due to new oral competition has been hurting Imbruvica's sales for the past few quarters. Imbruvica sales missed the Zacks Consensus Estimate of $630.0 million.
Erleada sales increased 9.5% to $995 million. Erleada sales missed the Zacks Consensus Estimate of $1.06 billion.
Among the newer cancer drugs, Carvykti sales surged 49.4% to $657 million, while Tecvayli sales jumped 56.5% to $260 million.
Talvey sales advanced 63.3% to $174 million. Rybrevant/Lazcluze sales climbed 60.8% to $289 million.
JNJ’s Tremfya and Neuroscience Drugs Offset StelaraWorldwide immunology sales declined 3.7% to $3.84 billion as biosimilar competition continued to put pressure on Stelara, whose sales fell 55.2% to $740 million. However, Stelara sales beat the Zacks Consensus Estimate of $654.0 million.
Several biosimilar versions of J&J’s multi-billion-dollar immunology drug, Stelara, were launched in the United States in 2025. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva Pharmaceutical Industries (TEVA - Free Report) , Samsung Bioepis/Sandoz, and some other companies have launched Stelara biosimilars.
Tremfya remained the key growth driver, with sales rising 72.5% to $2.05 billion. Tremfya sales beat the Zacks Consensus Estimate of $1.85 billion.
Remicade revenues decreased 25.8% to $338 million. Simponi and Simponi Aria sales declined 10.5% to $618 million.
Neuroscience sales increased 14% to $2.34 billion. Spravato revenues grew 40.8% to $584 million.
Caplyta, added from last year’s acquisition of Intra-Cellular Therapies, generated $361 million, up 70.9% year over year.
Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales rose 2.3% to $1.02 billion in the quarter.
JNJ’s PAH and Other Drugs’ PerformancePulmonary hypertension drug Uptravi recorded second-quarter 2026 sales of $494 million, up 3.8% year over year. Opsumit/Opsynvi sales increased 3.4% to $602 million.
Xarelto sales rose 7.1% to $664 million. Sales of Prezista/Prezcobix/Rezolsta/Symtuza declined 6.3% to $372 million.
J&J’s MedTech Business Posts Broad-Based GainsMedTech sales increased 4.5% to $8.93 billion, including operational growth of 3.6%. However, MedTech segment sales slightly missed the Zacks Consensus Estimate of $8.96 billion.
Excluding the impact of all acquisitions and divestitures, and currency, on an adjusted operational basis, worldwide sales rose 3.7%.
The MedTech business has improved in the past few quarters, driven by strong performance in three focus areas: Cardiovascular, Surgery and Vision.
Cardiovascular sales rose 4% to $2.40 billion. Shockwave revenues advanced 14.6% to $335 million, while electrophysiology sales increased 4.4% to $1.53 billion.
Surgery sales grew 3.9% to $2.65 billion, supported by wound-closure and biosurgery products. Vision revenues increased 6% to $1.45 billion, led by contact lenses. Orthopaedics sales rose 4.9% to $2.42 billion, with trauma revenues increasing 7.6%.
JNJ Slightly Ups 2026 GuidanceJ&J raised its 2026 reported sales guidance to $100.8-$101.4 billion from $100.3-$101.3 billion. The sales projection indicates growth in the range of 7.0%-7.6% versus the prior expectation of 6.5%-7.5%. Operational sales growth is expected in the range of 6.5%-7.1% versus the prior expectation of 5.9%-6.9%.
Adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth is expected in the range of 6.2%-6.8% versus the prior expectation of 5.6%-6.6%.
Adjusted earnings per share guidance was raised from a range of $11.45-$11.65 to $11.60- $11.75 per share. Adjusted earnings per share growth is expected in the range of 7.5%-8.9% versus the prior expectation of 6.1%-8.1%.
Our Take on JNJ’s Q2 ResultsJohnson & Johnson delivered a solid second-quarter performance, with adjusted earnings and sales topping expectations. Sales of key therapies — Darzalex and Tremfya — surpassed expectations, while Erleada fell short. Stelara sales were also better than expected. MedTech segment sales came in slightly below expectations.
Stelara’s loss of exclusivity (LOE) negatively impacted the Innovative Medicines segment’s growth by 760 basis points in the quarter. Despite Stelara's LOE, the Innovative Medicines unit once again outperformed estimates, driven primarily by strong momentum in oncology. Newer therapies and recent launches made a meaningful contribution to overall sales growth, helping offset biosimilar pressure. Encouraged by the quarter’s performance, J&J raised its 2026 financial guidance for the second time this year.
However, despite the beat and raise quarter, J&J’s shares declined more than 2% in pre-market trading on Tuesday, probably due to the MedTech miss and only a modest beat on overall sales.
J&J’s shares have risen 24% year to date compared with 12.1% appreciation of the industry.
Image Source: Zacks Investment Research
Nonetheless, J&J expects 2026 to be a year of accelerated growth. The company expects both its Innovative Medicines and MedTech segments to deliver stronger growth this year. The company is confident that it can achieve its target of generating more than $100 billion in revenues in 2026. Earlier, it had said that it expects sales to continue to improve in 2027, with a “line of sight” to double-digit growth by the end of the decade. An update is expected on the conference call.
J&J’s Zacks Rank & Stock to ConsiderJ&J currently has a Zacks Rank #3 (Hold).
A better-ranked drugmaker is Exelixis (EXEL - Free Report) , which has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Exelixis’s shares have risen 27.2% so far this year. Estimates for its 2026 earnings per share have increased from $3.49 to $3.54 over the past 60 days.
Exelixis’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 17.04%.
The launch of artificial intelligence-powered imaging and mapping capabilities for electrophysiology, early momentum for a drug releasing system for bladder cancer treatment, and progress toward a table-integrated robotic surgical system are among the latest innovations from pharmaceuticals and MedTech company Johnson & Johnson.
Johnson & Johnson Chairman and CEO Joaquin Duato highlighted these products Wednesday (July 15) during the company’s second-quarter earnings call.
“Our progress in Q2 reflects what makes Johnson & Johnson unique, a company innovating across the full spectrum of healthcare, delivering strong performance today while building a pipeline that will transform care for patients tomorrow,” Duato said. “As we look ahead, our confidence is rooted in the breadth of our innovation, from transformational medicines to next-generation medical technologies.”
Johnson & Johnson announced in April that with its launch of Cartosound Sonata, it was bringing new AI-based imaging and mapping capabilities to electrophysiology. This tool uses AI to create maps that help physicians build accurate models of multiple heart chambers and to help physicians treat a range of heart rhythm conditions.
Duato said during Wednesday’s call that this tool delivers new capabilities and further strengthens the company’s position in MedTech.
The company announced in September 2025 that it secured Food and Drug Administration (FDA) approval for Inlexzo, a drug releasing system that provides extended local delivery of a cancer medication into the bladder. Johnson & Johnson said at the time in a press release that this system provides a “potential practice-changing treatment” for certain patients.
During Wednesday’s call, Duato said Johnson & Johnson is “encouraged by the early momentum” of sales of the product.
Duato also highlighted a table-integrated robotic surgical system called Ottava, saying that Johnson & Johnson is progressing toward potential FDA authorization of this system and that the system “is one of the most significant MedTech innovations we will bring to market this decade.”
“In surgery, we are unlocking a new era powered by robotics and digital innovation,” Duato said during the call.
During the second quarter, Johnson & Johnson saw operational sales growth of 5.6% to $25.3 billion, with its Innovative Medicine business up 6.8% to $16.4 billion and its MedTech business up 3.6% to $8.9 billion, according to a Wednesday earnings release.
The company raised its guidance and expects to expects to surpass $100 billion in annual revenue this year, for the first time in Johnson & Johnson’s 140-year history, Duato said.
Altria (MO - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this owner of Philip Morris USA, the nation's largest cigarette maker have returned -0% over the past month versus the Zacks S&P 500 composite's +1.6% change. The Zacks Tobacco industry, to which Altria belongs, has lost 1.4% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Altria is expected to post earnings of $1.50 per share for the current quarter, representing a year-over-year change of +4.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The consensus earnings estimate of $5.7 for the current fiscal year indicates a year-over-year change of +5.2%. This estimate has changed +0.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $5.87 indicates a change of +3.1% from what Altria is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Altria is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Altria, the consensus sales estimate for the current quarter of $5.35 billion indicates a year-over-year change of +1.1%. For the current and next fiscal years, $20.53 billion and $20.68 billion estimates indicate +2% and +0.7% changes, respectively.
Last Reported Results and Surprise HistoryAltria reported revenues of $4.76 billion in the last reported quarter, representing a year-over-year change of +5.3%. EPS of $1.32 for the same period compares with $1.23 a year ago.
Compared to the Zacks Consensus Estimate of $4.56 billion, the reported revenues represent a surprise of +4.39%. The EPS surprise was +6.45%.
Over the last four quarters, Altria surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Altria is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Altria. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Barely a month after one of the most hyped listings in history, Space Exploration Technologies Corp. (SPCX 2.04%) has been humbled. After peaking around $225.64 in mid-June, SpaceX stock has slid to roughly $141, a drop of 37.5% that has pushed it below its $150 debut price and back toward its $135 offering level.
Yet just as retail enthusiasm faded, analysts at Deutsche Bank stepped in with a buy rating and a $255 price target -- a call that, from today's beaten-down price, implies the analysts think the story is far from over.
Image source: Getty Images.
The SpaceX stock drawdown, in context It's worth understanding why the share price fell so fast. This wasn't a business blowup. It was a sentiment unwind. SpaceX popped on its June debut, ran higher, and was swept into the Nasdaq-100, which forced a wave of passive index funds to buy. Once that mechanical demand was satisfied, the buying dried up and momentum reversed, sending the stock sliding for days back toward where it started. In other words, the price got ahead of itself on hype, and gravity did the rest.
Deutsche Bank's message, in effect, is that the pullback is noise around a durable long-term story. Its $255 target sits well above the current price, implying meaningful upside if the thesis plays out. The bank's reasoning centers on SpaceX's core advantage: launching rockets reliably, reusably, and cheaply, which it argues is the key that unlocks the wider space economy. It also pointed to Starlink evolving into a global connectivity network across consumers, businesses, and governments, and to SpaceX's potential edge in deploying computing power both on the ground and in orbit.
Deutsche Bank isn't alone in its optimism, either; other Wall Street desks launched coverage with bullish views, one going so far as to call SpaceX the "apex of civilizational ambition." The collective signal from these targets is that the smart money views the recent slide as an opportunity to own a dominant franchise at a better price, not a signal to flee.
Today's Change
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The other side of the target I'd take any price target with a healthy grain of salt, though. Analyst forecasts for SpaceX are all over the map, which tells you just how much guesswork is involved in valuing a company this new and this sprawling. Even at $137, the stock still trades at an enormous valuation that leaves little room for stumbles, and the business relies heavily on Starlink while its Starship program remains a work in progress. A target is an opinion, not a promise.
The gap between SpaceX's falling price and Deutsche Bank's $255 target captures the whole debate in one number: The market is nervous, but Wall Street's analysts think the long-term prize is intact. My honest read is that the sell-off looks more like hype deflating than fundamentals cracking, which could make this weakness interesting for patient investors.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Delta Air Lines (DAL - Free Report) Delta Air Lines, Inc. is one of the four carriers that together account for roughly 60% of the U.S. aviation market, following industry consolidation in the early part of this century.
DAL is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Transportation stock. DAL has a Momentum Style Score of A, and shares are up 2.9% over the past four weeks.
Seven analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.99 to $6.32 per share. DAL boasts an average earnings surprise of +5.5%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, DAL should be on investors' short list.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about GE Aerospace (GE - Free Report) .
GE currently has an average brokerage recommendation (ABR) of 1.45, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 22 brokerage firms. An ABR of 1.45 approximates between Strong Buy and Buy.
Of the 22 recommendations that derive the current ABR, 17 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 77.3% and 9.1% of all recommendations.
Brokerage Recommendation Trends for GE
Check price target & stock forecast for GE here>>>
While the ABR calls for buying GE, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is GE a Good Investment?In terms of earnings estimate revisions for GE, the Zacks Consensus Estimate for the current year has increased 0.1% over the past month to $7.49.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for GE. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for GE may serve as a useful guide for investors.
Goldman Sachs Group, Inc. (GS - Free Report) used its second-quarter 2026 earnings call to frame the quarter as more than a trading-driven beat. Management’s message centered on a broader expansion in strategic activity, with AI infrastructure, large-cap M&A and financing demand feeding multiple businesses at once.
That backdrop helped GS post earnings per share (EPS) of $20.98 and revenues of $20.34 billion, surpassing the Zacks Consensus Estimate of $14.47 and $16.49 billion, respectively, with surprise percentages of 45% and 23.3%.
GS Leans on Broader Revenue FlywheelChairman and CEO David Solomon described the quarter as a record period for revenue, EPS, ROE and ROTE, but he put the emphasis on the firm’s connectivity rather than on a single standout business. He said that advisory relationships are increasingly feeding financing, capital market execution and wealth opportunities across the franchise.
That framing fits the numbers. Global Banking & Markets revenues rose 53% year over year to $15.52 billion, while Asset & Wealth Management increased 20% to $4.60 billion. Goldman Sachs also said that the investment banking backlog reached its highest level in five years and the second-highest level on record.
The mix matters for investors. Management argued that the current environment is amplifying a multi-year strategy to build more durable revenue streams across advisory, financing, investing and wealth.
Goldman Sachs Sees AI Extending the CycleSolomon tied much of the current strength to an AI investment cycle that is spreading beyond core technology into infrastructure, energy and data centers. He said that the trend is increasing the demand for structuring, financing, risk management and capital market support across public and private markets.
He also linked the operating backdrop to a sharp increase in strategic dealmaking, noting large-cap corporate M&A volumes surged 90% through the first half of 2026. Management said that the advisory backlog is at a record and sponsor activity remains below historical averages, leaving another potential source of upside.
The firm’s reported underwriting results reinforced that point. Equity underwriting climbed 130% year over year to $985 million, while debt underwriting rose 75% to $1.03 billion, helped by leveraged finance and asset-backed activity.
GS Pushes Harder in Equities & AsiaThe clearest area of investor scrutiny in Q&A was Equities, wherein revenues jumped 72% year over year to a record $7.42 billion. CFO Denis Coleman said that the performance reflected multi-year investments in talent, technology and risk management, especially in Asia, where Goldman Sachshad seen an opportunity to improve share.
Coleman said that activity was broad-based across intermediation and financing, with strong client demand tied to single-stock dispersion and portfolio repositioning. He also said that the client base is diversified globally, pushing back against concerns that growth was driven by a narrow set of counterparties.
A UBS analyst pressed on whether the Asia hyperscale trade and balance sheet demand were creating concentration risks. Coleman acknowledged strong demand and said that pricing leverage is improving in some pockets, but stressed that the firm is staying selective in how it grows prime and financing exposure.
Goldman Sachs Builds on Wealth MomentumAsset and Wealth Management was another important support to the earnings call’s broader message. Management and other fees rose 20% year over year to a record $3.36 billion, total assets under supervision hit $4.04 trillion and the firm posted its 34th straight quarter of long-term net inflows.
Solomon highlighted nearly 900 referrals from investment banking into wealth management since the start of 2025, presenting that as evidence that the One Goldman Sachs model is gaining traction. He also pointed to record second-quarter alternatives fundraising of $59 billion, including $31 billion in private credit.
In Q&A, management said that incentive fees should rise materially in the second half on known transactions, while reiterating a multi-year alternative fundraising target of $75-$100 billion annually.
GS Balances Growth, Returns & ConstraintsGoldman Sachsused the quarter to show that it can still return capital aggressively while expanding the balance sheet for clients. The board raised the quarterly dividend to $5 a share, and the firm repurchased shares worth $4 billion during the quarter.
At the same time, CET1 under the standardized approach improved to 12.9% from 12.5%, even as the supplementary leverage ratio fell to 4.3% from 4.7%. Analysts pressed on whether leverage could constrain financing growth, and Coleman said that management continues to juggle multiple binding constraints dynamically rather than optimize around any single ratio.
Expenses also drew attention. Operating expenses rose 26% year over year to $11.67 billion, but the first-half efficiency ratio improved to 58.8%. Coleman said that the firm is gaining operating leverage and productivity benefits from automation and AI, though he stopped short of calling it a structural reset in the expense base.
Goldman Sachs Keeps the Focus on DurabilityThe closing tone from management was confident but not carefree. Solomon repeatedly said that the AI build-out remains in its early stages and should support elevated activity over a multi-year period, while also acknowledging that the path will not be linear.
That left investors with a clear message from the call: Goldman Sachs sees the quarter not as a peak event, but as evidence that its advisory, financing, markets and wealth businesses are feeding one another more effectively in a favorable operating environment.
Zacks Signals Mixed Style SetupGS currently carries a Zacks Rank #2 (Buy), along with a Value Score of C, a Growth Score of D, a Momentum Score of A and a VGM Score of D. In Zacks’ framework, A and B style scores signal stronger characteristics, and the most favorable combinations generally pair a Zacks Rank #1 (Strong Buy) or #2 with an A or B style score. You can see the complete list of today’s Zacks #1 Rank stocks here.
That leaves GS with a supportive rank and strong momentum profile, but less favorable value, growth and VGM signals. As always, the Zacks Rank can change as earnings estimate revisions move after the quarter’s results and management commentary are absorbed.
Goldman Sachs senior counsel Kathy Ruemmler on Wednesday told a House committee investigating convicted sex offender Jeffrey Epstein that if she had known he was abusing women or girls, she would have reported him to law enforcement.
BlackRock Inc (NYSE:BLK) reported second-quarter profit that topped Wall Street estimates on Wednesday, powered by record inflows and higher fees.
The world's largest asset manager posted adjusted earnings of $13.91 per share, beating the average analyst estimate of $12.57 and up 15% from a year earlier.
Revenue rose 31% to $7.08 billion, ahead of the $6.72 billion expected by analysts.
Assets under management climbed 22% to $15.34 trillion, as the firm pulled in $191.7 billion in total net inflows for the quarter.
ETFs led the gains with $177.9 billion in inflows, while active strategies added $53.3 billion. Fixed income drew $92.1 billion and equities brought in $71.6 billion. Alternatives added $22 billion, including $15.4 billion into private markets.
Cash management was the lone laggard, with $7.4 billion in outflows.
BlackRock's iShares ETF business ended the quarter with $6.25 trillion in assets.
Base fees and securities lending revenue rose 29% to $5.73 billion, while performance fees more than tripled to $305 million. The company said its recent acquisition of HPS Investment Partners contributed roughly $230 million to base fees in the quarter.
Organic base fee growth came in at 8% for the quarter and 10% over the trailing twelve months, with net inflows over that period totaling $868 billion. The first half of the year brought a record $321 billion in net inflows.
Adjusted net income rose 22% to $2.29 billion, while adjusted operating income climbed 39% to $2.92 billion. Adjusted operating margin expanded 260 basis points to 45.9%.
BlackRock said it repurchased $450 million of shares during the quarter and raised its planned quarterly buyback pace to $550 million, lifting its full-year 2026 repurchase target to $2 billion. The company also paid a dividend of $5.73 per share.
Shares of BlackRock were up 7.2% in early Wednesday trading in New York.
BlackRock Inc (NYSE:BLK) reported second-quarter profit that topped Wall Street estimates on Wednesday, powered by record inflows and higher fees.
The world's largest asset manager posted adjusted earnings of $13.91 per share, beating the average analyst estimate of $12.57 and up 15% from a year earlier.
Revenue rose 31% to $7.08 billion, ahead of the $6.72 billion expected by analysts.
Assets under management climbed 22% to $15.34 trillion, as the firm pulled in $191.7 billion in total net inflows for the quarter.
ETFs led the gains with $177.9 billion in inflows, while active strategies added $53.3 billion. Fixed income drew $92.1 billion and equities brought in $71.6 billion. Alternatives added $22 billion, including $15.4 billion into private markets.
Cash management was the lone laggard, with $7.4 billion in outflows.
BlackRock's iShares ETF business ended the quarter with $6.25 trillion in assets.
Base fees and securities lending revenue rose 29% to $5.73 billion, while performance fees more than tripled to $305 million. The company said its recent acquisition of HPS Investment Partners contributed roughly $230 million to base fees in the quarter.
Organic base fee growth came in at 8% for the quarter and 10% over the trailing twelve months, with net inflows over that period totaling $868 billion. The first half of the year brought a record $321 billion in net inflows.
Adjusted net income rose 22% to $2.29 billion, while adjusted operating income climbed 39% to $2.92 billion. Adjusted operating margin expanded 260 basis points to 45.9%.
BlackRock said it repurchased $450 million of shares during the quarter and raised its planned quarterly buyback pace to $550 million, lifting its full-year 2026 repurchase target to $2 billion. The company also paid a dividend of $5.73 per share.
Shares of BlackRock were up 7.2% in early Wednesday trading in New York.
BlackRock shares rallied after a bumper quarterly earnings report, and the investment firm became the first to manage more than $15 trillion in assets.
BlackRock Chairman and CEO Larry Fink joins 'Squawk on the Street' to discuss the company's quarterly earnings results, latest market trends, impact of AI and technological advancements, benefits of long-term investing, and more.
BlackRock (BLK - Free Report) reported $7.08 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 30.6%. EPS of $13.91 for the same period compares to $12.05 a year ago.
The reported revenue compares to the Zacks Consensus Estimate of $6.83 billion, representing a surprise of +3.75%. The company delivered an EPS surprise of +9.79%, with the consensus EPS estimate being $12.67.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how BlackRock performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Net inflows: $191.70 billion compared to the $159.46 billion average estimate based on two analysts.Assets under management - Cash management: $1,068.85 billion versus the two-analyst average estimate of $1,072.05 billion.Total Assets Under Management: $15,344.62 billion versus the two-analyst average estimate of $15,073.21 billion.Net inflows - Product Type - Cash management: $-7.43 billion versus the two-analyst average estimate of $3.45 billion.Revenue- Advisory and other revenue: $92 million versus $78.76 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +64.3% change.Revenue- Investment advisory, administration fees and securities lending revenue- Equity subtotal: $2.62 billion versus $2.51 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +37.1% change.Revenue- Distribution fees: $395 million versus the two-analyst average estimate of $395.86 million. The reported number represents a year-over-year change of +23.4%.Revenue- Investment advisory, administration fees and securities lending revenue- Long-Term: $5.38 billion compared to the $5.29 billion average estimate based on two analysts. The reported number represents a change of +29.7% year over year.Revenue- Investment advisory, administration fees and securities lending revenue- Fixed income- ETFs: $443 million versus the two-analyst average estimate of $450.19 million. The reported number represents a year-over-year change of +21%.Revenue- Investment advisory, administration fees and securities lending revenue- Equity- ETFs: $1.99 billion versus $1.9 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +42% change.Revenue- Investment advisory, administration fees and securities lending revenue- Non-ETF index: $385 million compared to the $350.88 million average estimate based on two analysts.Revenue- Investment advisory, administration fees and securities lending revenue- Digital assets, commodities and multi-asset ETFs: $163 million versus the two-analyst average estimate of $160.36 million.View all Key Company Metrics for BlackRock here>>>
Shares of BlackRock have returned -2.6% over the past month versus the Zacks S&P 500 composite's +1.6% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.
Key Takeaways BlackRock beat Q2 earnings and revenue estimates as adjusted EPS rose 15% y/y.BLK's AUM reached $15.34 trillion, up 22% y/y, aided by $199B in long-term net inflows.BlackRock's revenues rose 31%, while total expenses increased 25% y/y. BlackRock’s (BLK - Free Report) second-quarter 2026 adjusted earnings of $13.91 per share handily surpassed the Zacks Consensus Estimate of $12.72. The figure reflects a 15% rise from the year-ago quarter.
Shares of the company gained 4.4% in the pre-market trading on better-than-expected results, primarily driven by record AUM balance. However, a full day’s trading session will depict a clearer picture.
Results benefited from a rise in revenues. The assets under management (AUM) balance witnessed robust year-over-year growth, driven by net inflows. However, higher expenses created a headwind.
Net income attributable to BlackRock (on a GAAP basis) was $1.91 billion, up 20% from the prior-year quarter.
BLK’s Revenues Improve, Expenses RiseQuarterly revenues (on a GAAP basis) were $7.08 billion, outpacing the Zacks Consensus Estimate of $6.84 billion. Revenues increased 31% year over year. The rise was driven by an increase in all revenue components.
Total expenses amounted to $4.62 billion, up 25% year over year. The increase was due to a rise in all cost components, except for the change in fair value of contingent consideration. Also, the company did not record any restructuring charge in the reported quarter.
Non-operating income (on a GAAP basis) was $258 million, down 50% from the prior-year quarter.
BlackRock’s adjusted operating income was $2.92 billion, increasing 39% from the prior-year quarter.
BlackRock’s AUM Balance RisesAs of June 30, 2026, AUM was a record $15.34 trillion, reflecting a year-over-year rise of 22%. The company witnessed long-term net inflows of $199 billion in the reported quarter.
As of June 30, 2026, the average AUM of $14.85 trillion rose 24% year over year.
BLK’s Share RepurchasesBlackRock repurchased shares worth $450 million in the reported quarter.
Our View on BlackRockBLK’s continued efforts to diversify offerings and improve its revenue mix are expected to continue to support its financials despite the ongoing private credit headwinds. The acquisitions of Global Infrastructure Partners, Preqin ElmTree Funds and HPS Investment Partners are likely to enhance the company’s position as a global asset manager. However, elevated expenses pose a significant challenge for the company.
BlackRock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of BLK’s PeersBlackstone Inc. (BX - Free Report) is slated to report second-quarter 2026 results on July 23.
Over the past week, the Zacks Consensus Estimate for BX’s quarterly earnings has been unchanged at $1.33. The figure implies a rise of 9.9% from the prior-year quarter’s reported number.
Invesco (IVZ - Free Report) is scheduled to announce second-quarter 2026 numbers on July 28.
Over the past seven days, the Zacks Consensus Estimate for IVZ’s quarterly earnings has been revised higher to 66 cents. The figure implies a surge of 83.3% from the prior-year quarter’s actual.
BlackRock, Inc. (BLK) Q2 2026 Earnings Call July 15, 2026 7:30 AM EDT
Company Participants
Christopher Meade - General Counsel & Chief Legal Officer
Martin Small - Senior MD, CFO & Global Head of Corporate Strategy
Laurence Fink - Founder, CEO & Chairman
Conference Call Participants
Craig Siegenthaler - BofA Securities, Research Division
Michael Cyprys - Morgan Stanley, Research Division
Alexander Blostein - Goldman Sachs Group, Inc., Research Division
Michael Brown - UBS Investment Bank, Research Division
Patrick Davitt - Autonomous Research US LP
Benjamin Budish - Barclays Bank PLC, Research Division
Brian Bedell - Deutsche Bank AG, Research Division
Alexander Bond - Keefe, Bruyette, & Woods, Inc., Research Division
Presentation
Operator
Good morning. My name is Shelley, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock, Inc. Second Quarter 2026 Earnings Teleconference. Our host for today's call will be Chairman and Chief Executive Officer, Laurence D. Fink; Chief Financial Officer, Martin S. Small; President, Robert S. Kapito; and General Counsel, Christopher J. Meade. [Operator Instructions]
Thank you. And Mr. Meade, you may begin your conference.
Christopher Meade
General Counsel & Chief Legal Officer
Good morning, everyone. I'm Chris Meade, the General Counsel of BlackRock. Before we begin, I'd like to remind you that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that BlackRock's actual results may, of course, differ from these statements. As you know, BlackRock has filed reports with the SEC, which lists some of the factors that may cause the results of BlackRock to differ materially from what we say today. BlackRock assumes no duty and does not undertake to update any forward-looking statements.
At $268, McDonald's (NYSE:MCD | MCD Price Prediction) screens as more attractive on valuation, while at $106, Starbucks (NASDAQ:SBUX) looks fully priced.
Multi-year agreement brings cutting-edge solutions and real-world integration to the forefront of the Jets organization
, /PRNewswire/ -- The New York Jets have partnered with Xerox, one of the world's most recognized technology leaders, in a new multi-year agreement focused on integrating technology across the team's day-to-day football and business operations. As a central part of the relationship, Xerox solutions are being implemented throughout the organization, including document management, printing infrastructure, and internal workflows across both the training facility and front office.
"We're excited to welcome Xerox into the Jets family," said Jeff Fernandez, Jets Senior Vice President of Business Development + Ventures. "This partnership is about putting their technology to work to support how we operate and improve efficiency across the organization on a daily basis."
Xerox will work closely with the Jets' IT team to showcase how its solutions can enhance productivity, streamline workflows, and support the demands of a fast-paced, high-stakes environment. It will provide the opportunity to highlight how Xerox solutions are applied within a professional sports environment through a custom content feature.
"In professional sports every decision matters and every second counts, and that's exactly the kind of environment where Xerox thrives," said Darren Cassidy, chief marketing officer at Xerox. "By integrating our document management and workflow automation solutions across the Jets training facility and front office, we're helping the organization eliminate friction and focus on winning. Through the Jets Partner Alliance, we're creating connections between great businesses that share a commitment to operational excellence."
The partnership also includes supporting sponsorship of the Jets Partner Alliance, providing Xerox access to a year-round B2B platform connecting leading brands across the team's network, reinforcing a shared focus on driving meaningful B2B relationships through sports.
Xerox will also be featured across Jets gameday platforms at MetLife Stadium and have access to hospitality and partner engagement opportunities throughout the season.
About Xerox Holdings Corporation (NASDAQ: XRX)
Xerox is a global technology company with more than 120 years of innovation leadership. We design, manufacture, deliver, and support print, IT, and digital services for nearly 200,000 clients worldwide. Our integrated, AI-powered portfolio includes managed and production print, document management, workflow automation, cybersecurity, cloud managed services, IT infrastructure, and collaboration technology. Serving clients from growing SMBs to 90 percent of the Fortune 500, Xerox supports leading healthcare, government, financial services, education, legal, retail, and commercial organizations. Through direct sales and a global network of channel partners, we deliver the technology, expertise, and support organizations need to operate efficiently, securely, and at scale.
About New York Jets
The New York Jets were founded in 1959 as the New York Titans, an original member of the American Football League (AFL). The Jets won Super Bowl III, defeating the NFL's Baltimore Colts in 1969. In 1970, the franchise joined the National Football League in the historic AFL–NFL merger that set the foundation for today's league. As part of a commitment to its fan base through innovation and experiences, the team has created initiatives such as, its trailblazing Jets Rewards program, a state-of-the-art mobile app, and 1JD Entertainment, a comprehensive content platform that gives fans greater access to the team across all digital and social platforms. The organization takes great pride in a long-standing, year-round commitment to their community. These programs are funded by the New York Jets Foundation and look to positively influence the lives of young men and women in the tri-state area, particularly in disadvantaged communities. The organization supports the efforts of the Lupus Research Alliance, youth football and numerous established charitable organizations and causes sponsored by the NFL. The New York Jets play in MetLife Stadium, which opened in 2010, and are headquartered at the Atlantic Health Jets Training Center in Florham Park, New Jersey. For more information about the New York Jets visit newyorkjets.com.
Royal Caribbean (RCL - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this cruise operator have returned -9.5%, compared to the Zacks S&P 500 composite's +1.6% change. During this period, the Zacks Leisure and Recreation Services industry, which Royal Caribbean falls in, has lost 2%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Royal Caribbean is expected to post earnings of $3.92 per share for the current quarter, representing a year-over-year change of -10.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
The consensus earnings estimate of $17.3 for the current fiscal year indicates a year-over-year change of +10.6%. This estimate has changed +0.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $19.86 indicates a change of +14.8% from what Royal Caribbean is expected to report a year ago. Over the past month, the estimate has remained unchanged.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Royal Caribbean.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Royal Caribbean, the consensus sales estimate of $4.8 billion for the current quarter points to a year-over-year change of +5.8%. The $19.61 billion and $21.06 billion estimates for the current and next fiscal years indicate changes of +9.4% and +7.4%, respectively.
Last Reported Results and Surprise HistoryRoyal Caribbean reported revenues of $4.45 billion in the last reported quarter, representing a year-over-year change of +11.3%. EPS of $3.6 for the same period compares with $2.71 a year ago.
Compared to the Zacks Consensus Estimate of $4.45 billion, the reported revenues represent a surprise of +0.14%. The EPS surprise was +12.5%.
Over the last four quarters, Royal Caribbean surpassed consensus EPS estimates three times. The company topped consensus revenue estimates just once over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Royal Caribbean is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Royal Caribbean. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Key Takeaways HPE is benefiting from AI infrastructure demand and triple-digit server order growth.HPE entered Q3 with a $5.9 billion AI Systems backlog led by enterprise and sovereign customers.HPE is strengthening AI infrastructure with Juniper and record campus networking demand. Hewlett Packard Enterprise (HPE - Free Report) is benefiting from the modernization of traditional IT infrastructure and huge capex investment in artificial intelligence. HPE’s foray beyond traditional server architecture to accommodate compute, networking, storage, security, private cloud, virtualization, software for AI data centers and AI fabs is enabling it to monetize at a rapid pace.
Simultaneously, the demand for traditional servers, led by the end of the server technology cycle, has emerged as a major growth driver, with orders increasing by triple digits year over year. Enterprises are replacing aging infrastructure while also investing in servers for AI inferencing. These two tailwinds caused a multiplier effect, driving the second quarter of fiscal 2026 revenues to reach $10.7 billion.
Looking ahead, as AI moves into production, millions of enterprises will need infrastructure to run inference close to their proprietary data and applications. HPE is also benefiting directly from AI systems demand, entering the third quarter with $5.9 billion in AI Systems backlog, primarily from enterprise and sovereign customers. Juniper acquisition has also strengthened HPE in campus networking, data-center switching, routing and security.
HPE is uniquely positioned as it is one of the few companies that provide networking solutions as part of a wider AI infrastructure support. HPE’s self-driving networking capabilities, powered by agentic AI, further differentiate the portfolio.
Furthermore, HPE’s Campus and Branch orders reached record levels, Wi-Fi 7 sales increased more than sevenfold, data-center switching orders rose nearly 20%, and routing orders increased nearly 30% on a normalized basis in the second quarter of fiscal 2026. HPE is also benefiting from disruption in virtualization, with VM Essentials customer count increasing 43% during the first half of fiscal 2026.
How Competitors Fare Against HPE StockHPE competes with Super Micro Computer (SMCI - Free Report) and Dell Technologies (DELL - Free Report) in the AI infrastructure market. However, HPE’s ability to package compute, storage, networking and services into pre-configured solutions can reduce deployment complexity for enterprises and sovereign customers while giving it an edge over its competitors.
Super Micro Computer is on track to scale rack production capacity to more than 6,000 AI racks per month by the end of fiscal 2026, including 3,000 direct liquid cooling racks monthly. SMCI is already shipping 150kW AI racks in volume and preparing 250kW and 500kW rack solutions to support future high-density AI training and inference workloads. Dell Technologies is a major supplier of servers and storage systems, with a broad customer base across enterprises and cloud providers. Its scale, established distribution and service offerings give it an edge in winning large contracts.
HPE’s Price Performance, Valuation and EstimatesHPE has gained 106.4% in the year-to-date period. However, the company has underperformed the Zacks Computer - Integrated Systems industry, which has returned 115.4% in the same time frame.
HPE YTD Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, HPE trades at a forward price-to-sales ratio of 1.35, below the industry’s 6.08. The discounted valuation is also reflected by the Zacks Value Score of A.
The Zacks Consensus Estimate for HPE’s fiscal 2026 margin indicates year-over-year growth rate of 75.8%. Estimates have remained unchanged for the past 30 days.
Image Source: Zacks Investment Research
HPE currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. stocks were higher, with the Dow Jones index gaining around 100 points on Wednesday.
The proposal for $60.50 per share, backed by close to $50 billion in committed financing from banks, was submitted earlier this month, Reuters reported. That implies a 28% premium to PayPal’s closing share price on Tuesday,
PayPal shares jumped 13.5% to $53.74 on Wednesday.
Here are some other big stocks recording gains in today’s session.
Photo via Shutterstock
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Credit: Pixabay/CC0 Public Domain Shares in PayPal surged as much as 13% on Wall Street Wednesday after reports that payments firm Stripe and private equity group Advent International had made a joint offer to buy the digital payments pioneer.
U.S. media said the deal would value PayPal at about $53 billion, with the offer of $60.50 a share—a premium of some 28% over Tuesday's closing price—made this month.
The offer nevertheless comes in far below where PayPal traded just a year ago, after a bruising 12 months for the stock.
The deal would still rank among the largest fintech acquisitions ever, uniting Stripe's payments infrastructure—widely used by online businesses—with PayPal's massive consumer and merchant base.
Stripe, founded in 2010 by Irish brothers Patrick and John Collison, is one of Silicon Valley's most valuable private companies, most recently valued at around $159 billion.
The Collisons, who run Stripe as chief executive and president, have long resisted taking the company public.
PayPal was founded in the late 1990s, with billionaire investor Peter Thiel among its co-founders and Elon Musk joining through a merger with his startup X.com.
The company's early executives became known in Silicon Valley as the "PayPal mafia," a group of alumni who went on to found or lead companies including Tesla, SpaceX, LinkedIn, YouTube and Palantir.
But PayPal has struggled in recent years to keep pace with rivals including Apple Pay and Google Pay.
Its market value peaked near $360 billion in 2021 before collapsing, and the company issued disappointing profit guidance for 2026 at the start of the year.
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In this video, I will cover the reports of a potential acquisition of PayPal (PYPL +16.12%) and explain what it means for the stock and what I plan to do with my position. Watch the short video to learn more, consider subscribing, and click the special offer link below.
*Stock prices used were from the trading day of July. 15, 2026. The video was published on July. 15, 2026.
Neil Rozenbaum has positions in PayPal. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: short September 2026 $47.50 calls on PayPal. The Motley Fool has a disclosure policy. Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Image Credits:Photo by Thomas Trutschel/Photothek / Getty Images (Image has been modified) Stripe and private equity firm Advent International have reportedly submitted a joint bid to acquire PayPal in a deal valued at approximately $53.4 billion.
Reuters reports that the offer was submitted earlier this month and is backed by roughly $50 billion in committed bank financing. Under the proposal, Stripe and Advent would jointly own PayPal, with each holding an equal stake.
This isn’t the first time Stripe has been linked with a potential acquisition of the payments giant. Earlier reports in February suggested the company had been exploring a possible takeover and was engaged in preliminary discussions, although no formal proposal emerged at the time.
If completed, the acquisition would unite two of the biggest names in digital payments. PayPal serves around 440 million active accounts and handles roughly $1.8 trillion in payment volume during 2025. Meanwhile, businesses use Stripe to process $1.9 trillion in payments over the same period. Plus, Stripe’s valuation climbed to $159 billion earlier this year.
PayPal has yet to respond publicly to the offer.
The potential deal comes at a pivotal time for PayPal. CEO Enrique Lores took over in March following a company profit warning. Since then, there have been plans to cut at least $1.5 billion in costs over the next two to three years as PayPal looks to return to stronger growth. Reports have also suggested the company intends to reduce its workforce by around 20%.
PayPal, Stripe and Advent International did not immediately respond to our requests for comment.
Stripe and private equity firm Advent International have made a joint offer to acquire PayPal Holdings for $60.50 per share, in a deal that would value the payments company at more than $53 billion, two people familiar with the matter said.
The offer, submitted earlier this month, is backed by about $50 billion in committed financing from banks, said one of them.
The offer represents around a 28% premium to PayPal’s closing share price on Tuesday.
Stripe and Adevnt’s offer, submitted earlier this month, is backed by about $50 billion in committed financing from banks. The offer represents around a 28% premium to PayPal’s closing share price on Tuesday. REUTERS The sources declined to be named as the deal discussions are confidential.
PayPal, Stripe and Advent declined to comment.
Reuters first reported the news late on Tuesday.
Combining Stripe and PayPal, the most widely used payment platforms for internet merchants, would create one of the world’s largest global online payments company, processing some $3.7 trillion of annual payment volume.
The proposal follows an initial approach made in early April, the sources said.
Stripe and Advent have not received a response from PayPal and are seeking to advance discussions in the coming weeks, the sources said.
Under the proposal, Stripe and Advent would jointly own PayPal, with each holding an equal stake, rather than breaking up the company, the people said, adding that there is no certainty the approach will result in a transaction.
PayPal shares were last up nearly 17%.
Founded in the late 1990s, PayPal was an early player in digital payments, but has faced competition as consumers have embraced alternative payment methods and rivals such as Apple Pay and Google Pay have gained market share.
Founded in the late 1990s, PayPal was an early player in digital payments, but has faced competition as consumers have embraced alternative payment methods and rivals such as Apple Pay and Google Pay have gained market share. NurPhoto via Getty Images It has spent the past several years grappling with slowing growth and intensifying competition in digital payments, wiping out much of the value it gained during the pandemic.
The company’s market capitalization peaked at about $360 billion in 2021 and fell to as low as roughly $36 billion this year. It has lost more than 40% of its market value over the past 12 months.
After taking over in March, PayPal CEO Enrique Lores started a sweeping turnaround exercise to simplify the payments provider and sharpen its focus on growth.
In April, the company split its operations into three units covering checkout, consumer financial services Venmo, and payments and crypto, while making a series of management changes.
Despite the valuation premium, William Blair analyst Andrew Jeffrey said, “We do not think PayPal’s new CEO will likely embrace what could be viewed as a low-ball offer. If the current offer is an opening salvo, we could see Stripe and Advent go as high at $70 per share.”
Road to payment processing juggernaut The strategic appeal is that Stripe’s business has been overwhelmingly focused on merchants, while PayPal adds more than 430 million consumer accounts and direct consumer payment and banking relationships.
PayPal’s consumer offerings “could be attractive to materially accelerate” Stripe’s efforts to build out its digital wallet offering, TD Cowen analyst Bryan Bergin said.
The deal would give Stripe “direct consumer relationships, with a large user base and the potential for future financial-services distribution, which PayPal has recently increased its efforts on.”
Stripe would also gain Venmo’s peer-to-peer network and PayPal’s consumer-facing checkout button.
Stripe, founded by brothers John Collison and Patrick Collison (above) in 2010, allows companies to accept payments, make payouts and automate financial processes. Getty Images for WIRED A Stripe-PayPal combination would allow more transactions to flow across its own network, reducing reliance on processors like Visa or Mastercard, which could in turn help bypass transaction fees and earn more from each payment.
The deal could also bolster Stripe’s stablecoin ambitions, giving the company a vast consumer distribution network to help drive mainstream adoption of stablecoin-based payments. Stripe has invested heavily in its crypto unit, Bridge.
Global payment deals The potential PayPal transaction, if completed, will add to the recent M&A activity in the global payments sector, where buyers have pursued targets amid rapid changes in financial technology and the rise of artificial intelligence.
Payment companies are also increasingly seeking scale through M&A as well as exposure to faster-growing segments such as cross-border and business-to-business payments amid slower growth for traditional payment processing.
In 2025, Global Payments agreed to acquire rival Worldpay from FIS and private equity firm GTCR for $24.25 billion in a complex three-way deal. As part of that deal, GTCR sold its 55% stake and FIS exited its remaining 45% holding.
The sector has also seen a steady stream of smaller deals, including the acquisition of Payoneer Global by Canadian payments firm Nuvei for $2.75 billion. Nuvei is backed by Advent International and other private equity firms.
Mastercard is exploring the sale of a majority stake in its UK payments subsidiary Vocalink back to British banks as it responds to concerns about a critical asset being under US ownership, the Financial Times reported this week.
PayPal’s revenue rose 7% to $8.35 billion in the first quarter, beating analysts’ average estimate of $8.05 billion. On a currency-neutral basis, total payment volumes jumped 8% over a year ago to about $464 billion.
Privately held Stripe is among the industry’s most valuable companies. It was valued at $159 billion in a tender offer for employees and shareholders in February, a more than 70% jump from a similar share sale a year earlier.
The company, founded by brothers John Collison and Patrick Collison in 2010, allows companies to accept payments, make payouts and automate financial processes.
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The YieldMax PYPL Option Income Strategy ETF (NYSEARCA:PYPY) is up over 14% intraday after reports that Stripe and Advent International made a joint takeover bid for PayPal Holdings (NASDAQ:PYPL | PYPL Price Prediction). PYPY is a synthetic covered-call income fund built around PayPal shares, so the ETF will move directionally with the stock.
What Drove the Move PayPal is trading near $55 after opening sharply higher, a single-session gain of about 16% on volume already north of 50 million shares. The catalyst is a Reuters-sourced report, picked up across major outlets Wednesday morning, that Stripe and Advent International submitted a joint offer valuing PayPal at more than $53 billion, or $60.50 per share. That price represents a 28% premium to PayPal’s recent close, backed by $50 billion in committed financing, with the bidders reportedly seeking an agreement by the end of the month. PayPal, Stripe, and Advent have not publicly commented on what is described as confidential discussions.
That bid is being taken seriously because PayPal has been a struggling large-cap payments name: shares are down roughly 18% year to date and about 35% over the past year heading into Wednesday, and the company was recently moved to the Russell Midcap Index. That underperformance, combined with a $1.5 billion cost-reduction plan under new CEO Enrique Lores and an active buyback program, has framed PayPal as an undervalued asset with a strategic buyer’s option embedded in the stock.
Why PYPY Did Not Fully Match PayPal’s Pop PYPY holds a synthetic long position on PayPal and simultaneously sells short-dated call options against it. The premiums collected fund the ETF’s distributions. The tradeoff is that when PayPal makes a big one-day move above the strike price of those written calls, the fund’s upside is capped: it keeps the option premium, but it does not fully participate in the rally past the strike. That is why PYPL is up around 16% while PYPY is up closer to 14% in the same session.
As of April 30, 2026, the fund reported just under $30 million in net assets, with roughly 96% parked in Treasury bills serving as collateral behind the options and swap positions used to generate the PayPal exposure. That collateralized, derivatives-based build is standard for YieldMax’s covered-call ETFs.
Context on the Size of the Move Wednesday’s pop is by far the biggest one-day move for PYPY in recent memory and reframes what had been a downtrending chart. Before today, PYPY was up only about 3% over the past week and roughly 8% over the past month, and still down about 18% year to date and roughly 36% over the past year. That trailing performance is the practical illustration of the point income-ETF holders should understand: these funds are designed to convert price volatility into cash distributions, and the NAV tends to erode over time as the underlying stock drifts, distributions are paid out, and the call overlay clips rallies. A single event-driven jump does not undo that structural drag, even though holders of PYPY are probably still pretty happy today.
What to Watch Next For a PYPY holder, the key variables from here are whether PayPal’s board engages, whether a competing bidder emerges, and where the stock settles relative to the $60.50 offer. If PayPal trades toward the bid, further upside in PYPL is likely to be increasingly capped by the call overlay, and PYPY’s participation in additional gains will narrow. If the reports of a bid do not translate into a definitive agreement, PayPal shares could give back a portion of Wednesday’s move, and PYPY would follow the underlying lower. Analyst positioning going into the news was cautious: 31 hold ratings, 8 buy ratings, and 4 sell ratings, with an average analyst target price of $51.38, both of which sit below Wednesday’s traded price and well below the $60.50 bid.
Bottom line for the ETF audience: PYPY is doing exactly what a single-stock covered-call fund is built to do, capturing much of the underlying rally while giving some of it back to the call buyers on the other side of its options. For readers weighing the tradeoffs between income and price participation in these YieldMax-style products, our research team’s write-up on the mechanics of high-yield income funds (see Dividend Traps) is worth a read before the next distribution date. Treat PYPY as a tactical income tool tied to PayPal’s fate, not a substitute for owning PayPal outright.
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Ron Paul wrote in an essay published July 13-14, 2026, by the Ron Paul Institute for Peace & Prosperity, titled “Congressional Ratification of President Trump’s Corporatism,” that “Despite regularly denouncing the rising socialist menace, President Trump has been pursuing a policy arguably just as, if not more, dangerous to liberty and prosperity as anything proposed by Zohran Mamdani or Bernie Sanders: using government funds to purchase partial ownership of private companies.”
Paul frames this as a principled argument that a Republican president’s approach and a democratic socialist’s approach violate the same rule, and investors should focus on the mechanism rather than the political label.
What Trump Actually Did Paul’s target is concrete. Since January 2025, the Trump administration has acquired ownership interests totaling roughly $27 billion across 30 companies. His marquee example is Intel (NASDAQ:INTC | INTC Price Prediction): after the government announced it would take a 10% ownership stake in the chipmaker, shares jumped. Intel is up 192.03% year to date and 362.49% over the past year, moves that dwarf the underlying earnings recovery. A provision in the National Defense Authorization Act moving through Congress would formally authorize the administration’s corporate-investment activity, which Paul argues would permanently enshrine government ownership of private companies.
Corporatism, Not Socialism Paul is careful with the label. “President Trump’s policy of using government funds to invest in private companies in exchange for partial government ownership is not pure socialism,” he writes. “Instead, it is corporatism,” a system where power remains nominally in private hands while the government gains significant control. When investors believe a company carries a de facto government guarantee, they pile in, inflating valuations, misallocating capital, and creating moral hazard.
The Mamdani Parallel, Read Structurally Paul’s comparison is structural. Mamdani’s rent freeze, the New York City Rent Guidelines Board’s 7-1 vote to freeze rents at 0% for one million rent-stabilized apartments, uses government power to override private pricing. Trump’s stakes use government money to influence corporate behavior. Different tools, Paul argues, same principle: political decisions displacing market decisions. For investors, the shared trait is what matters: unpredictable government intervention in private markets, the thing portfolios hate most.
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The Counterargument There is a serious case on the other side. The administration argues that strategic stakes in critical industries like semiconductors serve national security and keep vital supply chains on American soil, the same logic behind the CHIPS Act. Industrial policy has a track record: South Korea, Taiwan, and Japan all used government investment to build world-class semiconductor industries that now dominate global supply. On Intel specifically, supporters argue a strategically essential American manufacturer was stabilized by the stake. The “road to serfdom” fear has a historical rebuttal: the US held stakes in GM and AIG during the 2008 crisis and later exited both without sliding permanently into corporatism.
What It Means for Investors Strip out the ideology and Paul is flagging a real new variable: political risk attached to specific equities based on government-ownership status. Intel is the live case study. Q1 2026 non-GAAP EPS came in at $0.29 against a $0.01 estimate, yet Intel still posted a $3.73 billion GAAP net loss tied to a Mobileye-linked restructuring charge, and the same filing lists U.S. government acquisition of significant equity interests as a risk factor. Companies with government stakes may rally on the announcement while carrying exit risk: when the government eventually sells, that supply hits the market and any government premium can evaporate. If the NDAA provision passes, every sector becomes a potential target, and government influence over corporate decisions becomes a market-wide factor investors must price.
The Irony That Sharpens the Point Ron Paul spent decades warning that Democrats would use government power to seize control of private industry. He is now issuing that exact warning about a Republican administration, comparing its policy to the most openly socialist figures in American politics. The libertarian lens, applied consistently, is party-blind. For investors, that consistency is the tell: the risk Paul describes is structural, and it is already showing up in stock prices.
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INTC stock is moving. See the chart and price action here. In a new post, Cramer reiterated Intel is his "favorite stock" and stressed that the chipmaker is now the third-largest customer of ASML. This Dutch lithography powerhouse just laid out fresh capacity expansion plans as AI demand refuses to cool.
Cramer Ties his Top Pick to ASML’s AI Spending BoomManagement highlighted continued heavy spending from leading-edge chipmakers deploying EUV and high‑NA tools, framing the AI boom as a multi‑year investment cycle rather than a short fad.
ASML stock initially popped on the report before settling into choppy trading as investors weighed rich valuations against an increasingly aggressive growth roadmap.
Why a Strong ASML Print Matters for Cramer’s Intel ThesisThat backdrop is tailor‑made for Cramer’s Intel call. He has already named Intel his favorite holding in his charitable trust, arguing that CEO Lip‑Bu Tan has turned the company into a credible AI foundry contender after a string of execution wins.
Intel’s deepening relationship with ASML — including its role as a top‑three customer for advanced EUV systems — gives the turnaround story a concrete capex backbone that traders can track through ASML’s bookings and shipment commentary each quarter.
If ASML is confident enough to push capacity higher on the back of AI‑driven demand, Cramer’s logic goes, then the customers funding that build‑out should be in a strong position as well.
Cramer is effectively telling the market that investors who buy the ASML AI‑picks‑and‑shovels thesis should own at least one of the biggest customers — and for him, that customer is Intel.
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