Stocks to buy

While the meat of the financial disclosure season didn’t quite get off to an auspicious start, a few notable enterprises produced strong results, making them earnings winners stocks. Facing tough headwinds such as geopolitical dynamics, monetary policy concerns, and an economy that could still suffer a recession, investors should at least consider adding proven winners to their portfolios.

To be sure, there’s nothing wrong with experimenting with your lineup. However, when it’s the ninth inning of the game and you need a surefire closer, you don’t just pick some random dude from the minors. No, you go with your best player for that situation. And that’s what we have with so-called earnings winners stocks 2023.

Almost certainly, there will be other times to exercise your creative juices. For now, go with the system with these compelling earnings beat stocks.

CAT Caterpillar $218.86
EMN Eastman Chemical $83.44
MMM 3M $106.10
AMZN Amazon.com $102.94
GM General Motors $33.82
AVB AvalonBay Communities $181.94
HTZ Hertz Global $16.57

Caterpillar (CAT)

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An internationally renowned construction equipment manufacturer, Caterpillar (NYSE:CAT) recently reported financial results for the first quarter, generating earnings per share of $4.91. This tally beat Wall Street’s consensus target of $3.79. Further, the latest print represented a 70.5% improvement on a year-over-year basis. Impressively, Caterpillar beat its profitability target despite unfavorable manufacturing costs.

On the top line, Caterpillar posted revenue of $15.9 billion, beating the consensus estimate of $15.2 billion. Further, sales improved 17% against the year-ago quarter. Here, increased sales volumes and favorable price realization bolstered the performance, per Zacks Equity Research.

Overall, Caterpillar benefits from a decent profitability profile. Right now, its trailing-year net margin pings at 11.28%, ranked better than 87.88% of competitors in the farm and heavy construction machinery sector. Therefore, it’s one of the best earnings winners stocks because the business is so predictable.

Currently, Wall Street analysts peg CAT as a consensus hold. However, their average price target comes out to $240.47, implying nearly 10% upside potential.

Eastman Chemical (EMN)

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A former subsidiary of Eastman Kodak (NYSE:KODK), Eastman Chemical (NYSE:EMN) is an independent global specialty materials company that produces a broad range of advanced materials, chemicals, and fibers for everyday purposes. So far this year, it’s performed modestly, gaining almost 3%. However, it gained slightly over 3% in the past week, showing signs of life.

According to Zacks, Eastman posted adjusted EPS of $1.63, which admittedly fell 20.9% from the year-ago quarter. However, the latest print surpassed the Street’s consensus estimate of $1.22 quite handily. On the top line, Q1 revenue hit $2.41 billion, beating out the consensus target of $2.37 billion. However, sales dipped about 11% YOY.

Still, EMN ranks among the top earnings growth stocks based on prior projections. Also, it might be undervalued, with shares trading at 10.88 times forward earnings. In contrast, the sector median stat is 15.11 times. Finally, analysts peg EMN as a moderate buy. Their average price target hits $96, implying 14% upside potential, making it one of the best earnings winners stocks.

3M (MMM)

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An applied sciences giant, 3M (NYSE:MMM) hasn’t been particularly exciting since its cynical Covid-19 tailwind (with the N95 respirators) faded into the rearview mirror. Since the start of the year, MMM slipped more than 13%. On the surface, it doesn’t seem like one of the best earnings winners stocks. However, it’s been showing signs of life in recent sessions.

Specifically, Zacks pointed out that 3M produced an adjusted EPS of $1.97. To be fair, this bottom line figure declined by double digits YOY because of the company’s exit from Russia. As well, 3M incurred a headwind from the decline in disposable respirator demand. Still, per-share profitability beat the Street’s consensus target of $1.60.

As well, 3M posted top-line sales of $8.03 billion, beating out the consensus target of $7.635 billion. Still, the top line declined 9% YOY due to foreign currency impact and divestitures.

Despite 3M’s consensus sell rating, shares seem a bit cheap compared to their recent performance. Therefore, it’s one of the earnings beat stocks to consider.

Amazon.com (AMZN)

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An e-commerce and technology giant that needs no introduction, Amazon.com (NASDAQ:AMZN) struggled under the weight of blistering inflation. Unfortunately, it suffered sharp losses last year. However, it’s on a comeback trail this year, gaining nearly 23% of equity value. Therefore, the upside pared down the trailing one-year loss to 15%.

For Q1, Amazon posted EPS of 31 cents, well above analysts’ consensus estimate of 21 cents, per Barron’s. Further, the news agency stated that the company’s retail unit undergirded the earnings beat. On the top line, the e-commerce specialist reported sales of $127.4 billion, up 9% from the year-ago quarter. Also, this beat the Street’s target of $124.6 billion.

While the market reacted negatively to management’s admission of decelerating cloud spending, investors should look at the bigger picture. Despite sharp challenges impacting the consumer economy, Amazon continues to chug along with its monstrous growth rate.

Overall, analysts peg AMZN as a consensus strong buy. Their average price target lands at $137.62, implying almost 31% upside potential. Thus, it’s arguably one of the best earnings winners stocks to consider.

General Motors (GM)

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A powerful name in the automotive sphere, General Motors (NYSE:GM) in my opinion ranks as one of the earnings winners stocks 2023 to watch. Aggressively moving into the electric vehicle space, GM has the advantage of owning several marquee brands. Therefore, it can electrify the most popular ones, giving the automaker a massive competitive edge.

According to Zacks, General Motors reported adjusted EPS of $2.21 in Q1, beating out Wall Street’s estimate of $1.64. Higher-than-expected operating profits from GM North America, GM International, and Financial segments contributed to the outperformance. As well, the bottom line improved from EPS of $2.09 one year ago.

For revenue, GM posted just under $40 billion, beating the consensus estimate of $38.68 billion. As well, the tally represented a significant increase from the $36 billion posted in the year-ago quarter. Encouragingly, covering analysts peg GM as a consensus moderate buy. Overall, their average price target comes out to $49.83, implying 51% upside potential. Thus, it’s one of the best earnings winners stocks to consider.

AvalonBay Communities (AVB)

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A publicly traded real estate investment trust, AvalonBay Communities (NYSE:AVB) invests in apartments. A tricky narrative, AVB presents high risks because of inflation and other consumer economy pressures (such as mass layoffs). Essentially, people might not have the money to fork over ridiculously high rents. At the same time, cynicism – you have to live somewhere – may lift AVB as one of the earnings winners stocks.

Fundamentally, it’s doing just that. Per Zacks, AvalonBay posted quarterly funds from operations (FFO) of $2.57 per share, beating out the Street’s consensus target of $2.54 per share. Notably, in the year-ago quarter, AvalonBay posted an FFO of $2.26. On the top line, the REIT generated revenue of $674.71 million, beating the consensus estimate by 1.37%. One year ago, AvalonBay rang up sales to the tune of $613.93 million.

Overall, AVB features intriguing financials. Its three-year revenue growth rate pings at 3.6%, beating out 63.07% of rivals in the REITs space. Also, its return on equity (ROE) stands at 10.28%, above 73.43% of its peers.

Hertz Global (HTZ)

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A risky enterprise because of its ignominious bankruptcy proceeding during the worst of the Covid-19 crisis, Hertz Global (NASDAQ:HTZ) could nevertheless make a case for one of the earnings winners stocks to buy. Fundamentally, the trying years of the pandemic produced collective cabin fever. Now that jurisdictions across the world have relaxed their mitigation protocols, traveling may bloom. If so, that might be good news for HTZ.

According to Zacks, Hertz posted an EPS of 39 cents in Q1, beating Wall Street’s estimate of 16 cents. However, in the year-ago quarter, the rental car agency posted an EPS of 87 cents. Still, Zacks points out that in the last four quarters, Hertz beat the consensus target all four times.

On the top line, the company generated revenue of $2.05 billion, beating the consensus estimate by 0.57%. One year ago, Hertz rang up sales of $1.81 billion. Here, the company beat sales estimates two times over the last four quarters. On a final note, analysts peg HTZ as a moderate buy. Their average price target stands at $25.25, implying over 51% upside potential.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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