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We are in the initial stage of the first-quarter 2024 earnings season, and the results have been in line with expectations so far. Meanwhile, several S&P 500 behemoths are set to beat on earnings next week. A few of them currently carry a favorable Zacks Rank. The combination of a favorable Zacks Rank and an earnings beat should drive their stock prices in the near-term.

S&P 500 in Q1 at a Glance

U.S. stock markets witnessed an astonishing rally in the past 15 months. The S&P 500 — popularly known as Wall Street’s broad-market index — rallied 10.2% in first-quarter 2024 after jumping 23.9% in 2023. Notably, the last quarter was its strongest first-quarter performance since 2019. The benchmark recorded 22 all-time highs in the last quarter.

The rally seen since the beginning of 2023 was led by a massive thrust toward artificial intelligence (AI), especially generative AI. The rapid penetration of digital technologies and the Internet worldwide during the lockdown period ushered in the significant adoption of AI.

Wall Street’s bull run in the first quarter got an added boost from the Fed’s multiple rate cuts signal, to the surprise of a large section of financial media, who indiscriminately warned of overvaluation.

Meanwhile, several S&P 500 behemoths are set to beat on earnings next week.

Our Top Picks

We have narrowed our search to five S&P 500 bigwigs that are poised to beat on earnings results next week. These stocks all carry a Zacks Rank #2 (Buy) rating and maintain 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 their 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 last quarter.

Image Source: Zacks Investment Research

Meta Platforms Inc. (META - Free Report)

This company is benefiting from steady user growth across all regions, the particularly Asia Pacific region. Increased engagement with its offerings like Instagram, WhatsApp, Messenger, and Facebook has been a major growth driver. Meta Platforms is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook.

The company's innovative portfolio, which includes Threads, Reels, Llama 2, Ray-Ban Meta smart glass, and mixed reality device Quest 3, is likely to aid growth. Reels continue to do very well across Instagram and Facebook. People reshared Reels 3.5 billion times every day during the fourth quarter of 2023.

Meta Platforms has an Earnings ESP of +0.62%. It has an expected earnings growth rate of 35.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last seven days.

Meta Platforms recorded earnings surprises in the last four reported quarters, with an average beat of 19.7%. The company is set to release earnings results on April 24, after the closing bell.

General Motors Co. (GM - Free Report)

This company's compelling electric vehicle (EV) and internal combustion engine portfolio displays strong demand for its quality pickups and SUVs. General Motors retained the U.S. auto sales crown in 2023. Its massive EV push is commendable.

General Motors plans to roll out 30 fresh EV models by the end of 2025. General Motors’ Ultium Drive system and battery plants in Ohio, Tennessee and Lansing are likely to scale up its e-mobility prowess. The company is on track to deliver on its $2 billion net cost reduction program by the end of 2024. Its superior liquidity profile and investor-friendly moves bode well.

General Motors has an Earnings ESP of +7.77%. It has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.

General Motors recorded earnings surprises in the last four reported quarters, with an average beat of 20%. The company is set to release earnings results on April 23, before the opening bell.

United Rentals Inc. (URI - Free Report)

This company is benefiting from sustained demand in its end markets and the strength of its core rental business. During the fourth-quarter 2023, rental revenues increased 13.5% from the year-ago quarter to $3.12 billion. Given the strength of the present market condition, United Rentals has provided strong guidance for 2024.

For 2024, the company expects total revenues in the range of $14.65-$15.15 billion, up from $14.332 billion reported a year ago. United Rentals sees multi-year tailwinds across infrastructure, energy, power, and manufacturing.

United Rentals has an Earnings ESP of +2.32%. It has an expected earnings growth rate of 5.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days.

United Rentals recorded earnings surprises in three out of the last four reported quarters, with an average beat of 3.1%. The company is set to release earnings results on April 24, after the closing bell.

Hess Corp. (HES - Free Report)

This company's two primary production engines are the Bakken shale and the Stabroek project offshore Guyana. In particular, Hess Corp. has achieved numerous world-class oil findings in the Stabroek Block, accounting for more than 11 billion barrels of oil equivalent (Boe) in recoverable resources.

Moving onto the company's Bakken shale play, the exploration & production firm possesses numerous premium untapped drilling locations. Hess Corp.'s announced buyout by Chevron is also a great transaction for shareholders, as they realize a premium and become part of a supermajor.

Hess Corp. has an Earnings ESP of +10.21%. It has an expected earnings growth rate of 60.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.3% over the last seven days.

Hess Corp. recorded earnings surprises in the last four reported quarters, with an average beat of 17.5%. The company is set to release earnings results on April 25, before the opening bell.

Valero Energy Corp. (VLO - Free Report)

Finally, this company is a premier refining player with presence across North America and the Caribbean. Valero Energy's diverse network favors robust refining margins, utilizing cost-effective crude for over half of its needs.

Valero Energy is focused on returning capital to shareholders through dividends and share buybacks. The demand for the company's distillate fuel is poised to increase from the new sulfur regulation standard set by the International Maritime Organization.

Valero Energy has an Earnings ESP of +26.07%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days. Valero Energy recorded earnings surprises in the last four reported quarters, with an average beat of 10.7%. The company is set to release earnings results on April 25, before the opening bell.

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