Episode summary
3 Strong Buy Stocks for this Red-Hot Earnings Season
Summary
The host argues that earnings are the main reason the market keeps rallying, pointing to a sharp upward revision in S&P 500 second-quarter earnings expectations to 23.9% from 14% at the start of the year. He says the first quarter was already exceptionally strong and that the second quarter now looks equally robust, with revenue growth still expected in double digits and annual 2026 earnings estimates also rising. He also notes that the finance sector remains a standout, with banks, insurers and asset managers benefiting from strong results and a still-reasonable valuation backdrop.
Using Zacks rank screens, the host highlights three Strong Buy names entering earnings season: Ford, Wayfair and Cisco. He says Ford looks like a turnaround story with 2026 earnings expected to jump 50.5% after a weak 2025, Wayfair is showing improving earnings momentum despite a still-high valuation, and Cisco’s breakout is backed by double-digit earnings growth and analyst support after its latest report. Across all three, he emphasizes that the number one rank often reflects improving consensus estimates and bullish company-specific developments.
Key takeaways
- The host says S&P 500 second-quarter earnings growth has been revised up to 23.9%, a new high for the year, as analysts kept raising estimates.
- The host says finance remains attractive because 2026 earnings growth is still expected to run at 11.1% and the sector is still cheap relative to its growth.
- The host says Ford is a turnaround story, with 2026 EPS expected to rise 50.5% after a 40% decline in 2025.
- The host says Wayfair’s estimates are improving, with 2026 EPS expected at $2.91 and 2027 at $3.77, even though the stock is still pricey at about 32 times earnings.
- The host says Cisco’s strong buy case rests on a breakout chart and expected EPS growth of 12.3% this year and 11.7% next year.
Notable quotes
“look at the earnings. So, that's what we're going to do today”
“as of today going into this new uh earnings season just this week actually um here in July 2026 we're at the new high of growth of 23.9%”
“this is why I'm bullish, but this is also why I wanted to look at a couple of stocks that are currently Zach's number one ranks, which is the strong buy”
“earnings expected to be up 50.5% this year, but look at last year, it was terrible, down 40% last year”
“Earnings expected to be up 12.3 this year, 11.7 next year”
How the episode opens
Stocks, bonds, ETFs, straight out of downtown Chicago. This is Zach's Market Edge. Welcome to Zach's Market Edge, the podcast about investing in your life.
I'm your host, Tracy Reinhik, and this week I'm going solo to talk about what's happening with earnings. What stocks are Zach's strong buys right now as we head into earnings season, and we're going to take a look at what is going on with the actual earnings, the changes that the analysts have been making on their consensus with these earnings for the second quarter. It's pretty striking here.
Um, in fact, I don't recall remembering an earning season like this in quite some time. We had a spectacular first quarter and it looks like it's going to continue for the second quarter here. It's really the earnings that are driving stocks higher.
I get asked this question all the time. How can stocks keep going up? What what is going on that we're getting this kind of rally?
And I tell them, look at the earnings. So, that's what we're going to do today. We're going to take a look at the finance sector and then I'm going to talk about three stocks.
We're going to take a look at their earnings as we go into this earning season. So, uh, finance sector, I'm looking at Shirazmian's great earnings articles that we have on sax.com every week. uh even outside of earning season, he's writing about earnings and he keeps track of everything going on by sector and then the overall S&P 500 and also covers a little bit on the S&P 600 which is the small caps.
We have uh some less data on the small caps. So, it's not quite as reliable as we have on the S&P 500 which goes back years and years and it's just easier.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- earnings season
- q2 earnings
- s&p 500 earnings expectations
- strong buy stocks
- market outlook
Watch the episode
Watch “3 Strong Buy Stocks for this Red-Hot Earnings Season” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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