Avoid these potential earnings 'blow-ups', says Wolfe Research
Several indicators may herald earnings disappointments at multiple companies, according to Wolfe Research. Here are some of them.
TL;DR
- Wolfe Research predicts continued choppy trading in the stock market due to macroeconomic uncertainty.
- Companies with low Earnings Quality (EQ) scores, a proprietary measure by Wolfe Research, are at higher risk of earnings disappointments.
- Warning signs include departure of a CFO, recent M&A activity, persistent use of non-GAAP earnings, and potential undisclosed SEC investigations.
- Stocks flagged for potential earnings blow-ups include Yum Brands (EQ score 10), Nike (EQ score 17), Chewy (EQ score 2), Amazon (EQ score 5), and Meta Platforms (EQ score 5).