Your Top 10 “Bullish Earnings” Stocks as Profits Surge

The S&P 500's Q3 2025 blended net profit margin held at 12.8%, marking the sixth consecutive quarter above its 12.1% five-year average, with analysts forecasting continued growth through Q2 2026. While Financials and Utilities show year-over-year margin increases, Communication Services and Real Estate experienced declines. For upcoming earnings, Expedia Group (EXPE) is flagged as a bullish prospect with projected EPS growth, mirroring Booking Holdings' (BKNG) recent beat and subsequent stock rise. Conversely, Warner Bros. Discovery (WBD) faces bearish EPS projections, signaling potential stock weakness despite its ongoing business separation.

Analysis

The S&P 500's blended net profit margin for Q3 2025 stands at 12.8%, maintaining the previous quarter's level and significantly exceeding the five-year average of 12.1%. This marks the sixth consecutive quarter the benchmark has surpassed its long-term average, indicating sustained corporate profitability. Analysts, according to FactSet, anticipate further margin expansion through Q2 2026, suggesting a positive outlook for aggregate corporate earnings.

Sector-level analysis reveals divergent trends in net profit margins year-over-year. Financials and Utilities demonstrated robust growth, with Financials rising to 19.9% from 18% and Utilities to 16.7% from 14.8%. Conversely, Communication Services experienced a decline from 14.8% to 13.8%, and Real Estate saw a notable decrease from 35.2% to 34.3%, highlighting sector-specific pressures despite the overall market strength.

Upcoming earnings reports present distinct opportunities and risks. Expedia Group (EXPE) is highlighted as a bullish prospect, projected to increase its EPS by over $4, following Booking Holdings' (BKNG) recent beat of $99.50 EPS which led to a 1.7% stock increase. Conversely, Warner Bros. Discovery (WBD) faces negative EPS projections for the current quarter, signaling potential downward stock movement, irrespective of its ongoing review for separating its Warner Bros. and Discovery Global businesses.

Key Decisions for Investors

• Investors should monitor the S&P 500's sustained net profit margin strength and analyst projections for continued growth, which may support broader market valuations.
• Consider re-evaluating sector allocations, potentially favoring Financials and Utilities given their year-over-year margin increases, while exercising caution in Communication Services and Real Estate.
• Investors interested in the travel sector could consider Expedia Group (EXPE) for potential upside post-earnings, mirroring Booking Holdings' (BKNG) recent performance, but should exercise caution with Warner Bros. Discovery (WBD) due to negative EPS projections.