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The first-quarter 2021 earnings season has picked up momentum this week. It will be in full swing next week as more than 875 companies are slated to release their quarterly financial numbers. The overall earnings picture is highly impressive so far, with a favorable comparison from the same quarter of last year, which was partially affected by the global outbreak of the deadly coronavirus.

Meanwhile, a handful of corporate behemoths (market capital > $60 billion) with a Zacks Rank #1 (Strong Buy) or 2 (Buy) are poised to beat first-quarter earnings estimates. Investment in these stocks may turn profitable in the near future.

Q1 2021 at a Glance  

Several positive developments took place last quarter. First, the U.S. government ramped up nationwide COVID-19 vaccination on a priority basis. The speeding up of the process implies faster-than-expected reopening of the U.S. economy. This along with the easing of COVID-19 infections boosted business activities.

Second, the two major fiscal stimuli — the $900 billion of the second-round of government aid package approved in late December and a fresh round of a massive $1.9 trillion coronavirus relief package approved by the Biden administration in February — have significantly strengthened the U.S. economy.

Third, a series of recently released economic data like job market data, manufacturing and services index, vehicle sales, and consumer satisfaction optimization indexes have clearly indicated that the U.S. economy is witnessing a strong recovery since the beginning of 2021.

Impressive Q1 Earnings So Far

The first-quarter 2021 earnings season has started with much vigor. As of Apr 21, just 75 S&P 500 companies reported results. Total earnings of these companies are up 59.2% year over year on 6.1% higher revenues, with 85.3% of companies having surpassed EPS estimates and 78.7% beating on revenues.

For the first quarter as a whole, total earnings of the S&P 500 companies are expected to be up 28.1% from the same period last year on 6.3% higher revenues. These estimates were favorably compared with the 20.4% jump in earnings on 5.6% higher revenues estimated at the beginning of the reporting cycle.

Our Top Picks

We have narrowed down our search to five corporate bigwigs slated to release first-quarter earnings results next week. Each of these stocks carries either a Zacks Rank #1 or 2 and has a positive Earnings ESP. 

Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after the earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The chart below shows the price performance of our five picks in the first quarter.

Exxon Mobil Corp. (XOM Quick Quote XOM - Free Report) explores and produces crude oil and natural gas in the United States, Canada/Other Americas, Europe, Africa, Asia, and Australia/Oceania. It operates through the Upstream, Downstream, and Chemical segments. The Zacks Rank #1 company has an Earnings ESP of +8.09%.

Exxon Mobil has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 7 days. It has a trailing four-quarter earnings surprise of 362.4%, on average. The company is set to release earnings results on Apr 30, before the opening bell.

Chevron Corp. (CVX Quick Quote CVX - Free Report) is one of the largest oil and gas companies in the world with operations that span almost every corner of the globe. It operates in two segments, Upstream and Downstream. The Zacks Rank #1 company has an Earnings ESP of +6.08%.

Chevron has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 7 days. It has a trailing four-quarter earnings surprise of 14%, on average. The company is set to release earnings results on Apr 30, before the opening bell.

Texas Instruments Inc. (TXN Quick Quote TXN - Free Report) designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. The company is seeing particular success in certain fast-growing segments of the automotive market. It operates in two segments, Analog and Embedded Processing. The Zacks Rank #2 company has an Earnings ESP of +4.25%.

Texas Instruments has an expected earnings growth rate of 13.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days.  It has a trailing four-quarter earnings surprise of 34.9%, on average. The company is set to release earnings results on Apr 27, after the closing bell.

Caterpillar Inc. (CAT Quick Quote CAT - Free Report) manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. The Zacks Rank #2 company has an Earnings ESP of +3.15%.

Caterpillar has an expected earnings growth rate of 25.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 7 days.  It has a trailing four-quarter earnings surprise of 27.2%, on average. The company is set to release earnings results on Apr 29, before the opening bell.

Intercontinental Exchange Inc. (ICE Quick Quote ICE - Free Report) operates regulated exchanges, clearinghouses, and listings venues for commodity, financial, fixed income, and equity markets in the United States, the United Kingdom, the European Union, Singapore, Israel, and Canada. It operates through three segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology. The Zacks Rank #2 company has an Earnings ESP of +0.77%.

Intercontinental Exchange has an expected earnings growth rate of 11.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the last 30 days.  It has a trailing four-quarter earnings surprise of 3.7%, on average. The company is set to release earnings results on Apr 29, before the opening bell.