By the Numbers

Q3 Earnings Preview:  Top Expectations for Growth

October is here and the kickoff to earnings season is just around the corner with Alcoa set to report next week.  Here are the Top 20 stocks in the S&P 500 with the greatest expected year-on-year analyst growth forecasts.

Keep in mind that with the financial crisis in full swing by the end of the third quarter 2008, many S&P companies were already showing negative earnings and analysts had a tough go at correctly estimating with precision.  Perhaps now that the markets seem to have settled down a bit, the analyst numbers will be meaningful once again.  At the end of Q2, earnings were down 27.3% from a year prior.  First Call consensus data from Thomson Reuters is currently expecting a decline of 24.7% for Q3 2009.  The Financials and Consumer Discretionary sectors are the only two S&P sectors expected to show growth overall this quarter.

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The leader of the Top 20, Whole Foods managed to eke out an EPS of $.01 per share in Q3 of 2008 (Fiscal Q4 for WFMI).  Consensus estimates for Fiscal Q4 2009 for WFMI are for $0.18 per share, a Y/Y gain of 1706%.  Of course, a one penny denominator helps too.  Below is the complete Top 20 from ThomsonReuters based on absolute value of estimated EPS gains compared to Q3 2008 actuals: