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Philip van Doorn

Feb. 22, 2020, 2:24 p.m. EST

Wall Street has boosted 2020 estimates for these S&P 500 companies the most

Looking at these stocks may help you spot trends as well as possible bargains or recovery plays

By Philip van Doorn, MarketWatch


Bloomberg
Wall Street analysts have increased their 2020 sales and earnings estimates significantly for Hasbro, the maker of Play-Doh.

We’re getting close to the end of another earnings season, with 77% of S&P 500 companies reporting their results through Feb. 20. Analysts react not only to actual quarterly results, but to changes in companies’ guidance (if any) for their fiscal years, as well as industry developments, legal or regulatory challenges as well as world events, such as the coronavirus outbreak.

Higher estimates can push stock prices higher, which may be of particular importance because of how much price-to-earnings valuations have increased for U.S. stocks. The weighted aggregate consensus forward price-to-earnings ratio for the S&P 500 (S&P:SPX) has increased to 19 from 16.3 a year ago. The current forward P/E ratio for the benchmark index is the highest since May 2002, according to data provided by FactSet:


FactSet
The S&P 500’s forward price-to-earnings ratio is at its highest level since May 2002.

“Reassuringly, topline growth has stayed elevated, at +4%” this earnings season, Mislav Matejka, the head of JPMorgan’s global equity strategy, wrote in an earnings-season summary on Feb. 21. He was also noted that “blended EPS growth [actual numbers combined with estimates for companies that hadn’t reported yet] for S&P 500 has inflected higher.”

Looking at which companies have had their sale and earnings estimates raised the most by analysts since the end of 2019 may help you spot trends as well as possible bargains or recovery plays. If you see anything of interest, always do your own research for more insight into what led to the revised estimates.

Related: Wall Street has slashed these S&P 500 companies’ estimates by as much as 70%

The data below includes estimates for calendar 2020.

Largest sales estimate increases

Here are the 20 S&P 500 stocks with the largest increases in consensus 2020 revenue estimates since the end of 2019:

Company Ticker Industry Change in 2020 sales estimate from Dec. 31 to Feb. 20 Increase in 2020 EPS estimate from Dec. 31 to Feb. 20
Centene Corp. (NYS:CNC) Managed Health Care 34.5% 0.3%
Prologis Inc. (NYS:PLD) Real-estate investment Trusts 27.0% 13.1%
Hasbro Inc. (NAS:HAS) Recreational Products 25.3% 9.2%
Vertex Pharmaceuticals Inc. (NAS:VRTX) Biotechnology 10.3% 13.6%
Leidos Holdings Inc. (NYS:LDOS) Information Technology Services 8.2% 3.5%
Lam Research Corp. (NAS:LRCX) Electronic Production Equipment 7.5% 9.2%
T. Rowe Price Group (NAS:TROW) Investment Managers 5.4% 9.0%
Applied Materials Inc. (NAS:AMAT) Industrial Machinery 5.2% 10.3%
E-Trade Financial Corp. (NAS:ETFC) Investment Banks/Brokers 4.7% 3.4%
Garmin Ltd. (NAS:GRMN) Telecommunications Equipment 4.3% 7.9%
Regeneron Pharmaceuticals Inc. (NAS:REGN) Biotechnology 4.3% 6.1%
Cigna Corp. (NYS:CI) Managed Health Care 4.1% -0.2%
BlackRock Inc. (NYS:BLK) Investment Managers 3.5% 5.1%
Nvidia Corp. (NAS:NVDA) Semiconductors 3.5% 7.1%
Invesco Ltd. (NYS:IVZ) Investment Managers 3.3% 1.3%
Apple Inc. (NAS:AAPL) Telecommunications Equipment 3.2% 5.1%
Raymond James Financial Inc. (NYS:RJF) Investment Banks/Brokers 3.2% 0.2%
Microchip Technology Inc. (NAS:MCHP) Semiconductors 3.1% 5.0%
Western Digital Corp. (NAS:WDC) Computer Peripherals 3.1% 20.2%
ConocoPhillips (NYS:COP) Oil & Gas Production 3.0% -0.6%
Source: FactSet

You can click the tickers for more about each company.

To be sure, sales don’t tell the whole story. Cigna (NYS:CI)  and ConocoPhillips (NYS:COP)  both had their consensus EPS estimates cut, even as revenue estimates were increased.

Here’s a summary of current analyst opinion for the group, including changes in consensus price targets:

Company Ticker share 'buy' ratings Share neutral ratings Share 'sell' ratings Closing price - Feb. 20 Cons. price target Implied 12-month upside potential Change in price target since Dec. 31
Centene Corp. (NYS:CNC) 90% 10% 0% $65.73 $81.58 24% 14%
Prologis Inc. (NYS:PLD) 83% 11% 6% $98.95 $100.18 1% 6%
Hasbro Inc. (NAS:HAS) 59% 41% 0% $98.88 $115.25 17% 0%
Vertex Pharmaceuticals Inc. (NAS:VRTX) 76% 24% 0% $245.10 $266.29 9% 13%
Leidos Holdings Inc. (NYS:LDOS) 40% 60% 0% $119.27 $119.33 0% 22%
Lam Research Corp. (NAS:LRCX) 65% 26% 9% $328.49 $340.05 4% 23%
T. Rowe Price Group (NAS:TROW) 35% 53% 12% $137.74 $138.57 1% 12%
Applied Materials Inc. (NAS:AMAT) 84% 12% 4% $66.40 $75.22 13% 11%
E-Trade Financial Corp. (NAS:ETFC) 50% 50% 0% $54.73 $53.54 -2% 15%
Garmin Ltd. (NAS:GRMN) 0% 71% 29% $99.81 $97.25 -3% 15%
Regeneron Pharmaceuticals Inc. (NAS:REGN) 37% 63% 0% $399.14 $417.71 5% 6%
Cigna Corp. (NYS:CI) 88% 8% 4% $220.41 $252.64 15% 9%
BlackRock Inc. (NYS:BLK) 76% 24% 0% $566.92 $591.33 4% 9%
Nvidia Corp. (NAS:NVDA) 74% 21% 5% $308.70 $308.95 0% 31%
Invesco Ltd. (NYS:IVZ) 17% 66% 17% $18.03 $18.47 2% 2%
Apple Inc. (NAS:AAPL) 59% 34% 7% $320.30 $329.58 3% 24%
Raymond James Financial Inc. (NYS:RJF) 50% 50% 0% $101.26 $104.11 3% 7%
Microchip Technology Inc. (NAS:MCHP) 82% 18% 0% $108.13 $122.84 14% 12%
Western Digital Corp. (NAS:WDC) 58% 39% 3% $69.06 $80.15 16% 26%
ConocoPhillips (NYS:COP) 88% 12% 0% $58.88 $74.57 27% 1%
Source: FactSet

Largest EPS estimate increases

Here are the 20 S&P 500 stocks with the largest increases in consensus 2020 earnings-per-share estimates since the end of 2019:

Company Ticker Industry Increase in 2020 EPS estimate from Dec. 31 to Feb. 20 Change in 2020 sales estimate   from Dec. 31 to Feb. 20
Noble Energy Inc. (NAS:NBL) Oil & Gas Production 87.7% -3.7%
Apartment Investment & Management Co Class A (NYS:AIV) Real-estate investment Trusts 47.0% -1.9%
Western Digital Corp. (NAS:WDC) Computer Peripherals 20.2% 3.1%
SL Green Realty Corp. (NYS:SLG) Real-estate investment Trusts 16.7% 1.9%
Vertex Pharmaceuticals Inc. (NAS:VRTX) Biotechnology 13.6% 10.3%
Helmerich & Payne Inc. (NYS:HP) Contract Drilling 13.6% 1.1%
Prologis Inc. (NYS:PLD) Real-estate investment Trusts 13.1% 27.0%
Incyte Corp. (NAS:INCY) Biotechnology 12.7% 0.2%
ViacomCBS Inc. Class B (NAS:VIAC) Broadcasting 12.6% -1.7%
NortonLifeLock Inc. (NAS:NLOK) Packaged Software 11.1% -3.5%
Applied Materials Inc. (NAS:AMAT) Industrial Machinery 10.3% 5.2%
Hasbro Inc. (NAS:HAS) Recreational Products 9.2% 25.3%
Lam Research Corp. (NAS:LRCX) Electronic Production Equipment 9.2% 7.5%
T. Rowe Price Group (NAS:TROW) Investment Managers 9.0% 5.4%
Netflix Inc. (NAS:NFLX) Cable/Satellite TV 8.5% -0.5%
Williams Companies Inc. (NYS:WMB) Oil & Gas Pipelines 8.2% 1.6%
Garmin Ltd. (NAS:GRMN) Telecommunications Equipment 7.9% 4.3%
DaVita Inc. (NYS:DVA) Medical/Nursing Services 7.5% 0.6%
Dish Network Corp. Class A (NAS:DISH) Cable/Satellite TV 7.5% 2.0%
Source: FactSet

Here are ratings and price targets for this group, including changes in consensus price targets:

Company Ticker share 'buy' ratings Share neutral ratings Share 'sell' ratings Closing price - Feb. 20 Cons. price target Implied 12-month upside potential Change in price target since Dec. 31
Noble Energy Inc. (NAS:NBL) 81% 19% 0% $18.55 $27.93 51% -2%
Apartment Investment & Management Co Class A (NYS:AIV) 29% 59% 12% $55.16 $56.21 2% 0%
Western Digital Corp. (NAS:WDC) 58% 39% 3% $69.06 $80.15 16% 26%
SL Green Realty Corp. (NYS:SLG) 47% 42% 11% $94.16 $98.71 5% 3%
Vertex Pharmaceuticals Inc. (NAS:VRTX) 76% 24% 0% $245.10 $266.29 9% 13%
Helmerich & Payne Inc. (NYS:HP) 44% 40% 16% $45.47 $46.08 1% 4%
Prologis Inc. (NYS:PLD) 83% 11% 6% $98.95 $100.18 1% 6%
Incyte Corp. (NAS:INCY) 45% 55% 0% $82.77 $91.50 11% -1%
ViacomCBS Inc. Class B (NAS:VIAC) 46% 46% 8% $29.29 $42.43 45% -10%
NortonLifeLock Inc. (NAS:NLOK) 16% 74% 10% $20.79 $19.64 -6% -23%
Applied Materials Inc. (NAS:AMAT) 84% 12% 4% $66.40 $75.22 13% 11%
Hasbro Inc. (NAS:HAS) 59% 41% 0% $98.88 $115.25 17% 0%
Lam Research Corp. (NAS:LRCX) 65% 26% 9% $328.49 $340.05 4% 23%
T. Rowe Price Group (NAS:TROW) 35% 53% 12% $137.74 $138.57 1% 12%
Netflix Inc. (NAS:NFLX) 64% 24% 12% $386.00 $373.63 -3% 2%
Williams Companies Inc. (NYS:WMB) 79% 21% 0% $22.05 $27.17 23% -1%
Garmin Ltd. (NAS:GRMN) 0% 71% 29% $99.81 $97.25 -3% 15%
DaVita Inc. (NYS:DVA) 23% 69% 8% $84.65 $86.70 2% 18%
Dish Network Corp. Class A (NAS:DISH) 33% 45% 22% $41.00 $43.06 5% 4%
Source: FactSet

Also read: Wall Street has slashed these S&P 500 companies’ estimates by as much as 70%

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