These 5 stocks reporting earnings next week have momentum on their side

The third-quarter earnings season commences next week, with major banks and S&P 500 constituents reporting. CNBC Pro analysis highlights Progressive and Charles Schwab as potential post-earnings outperformers, driven by substantial upward revisions in analyst estimates. Progressive has seen 52 upward revisions in three months, with Bank of America raising its price target to $350, citing underestimated earnings power, while Charles Schwab, with 33 upward revisions, received an outperform rating from BMO Capital Markets due to its robust wealth management model.

Analysis

The Q3 earnings season commences next week, with 34 S&P 500 companies, including major banks, reporting. CNBC Pro identified potential outperformers based on stringent criteria: significant upward earnings estimate revisions (at least 10 up, 10 or fewer down in three months, plus 5% up over three/six months), indicating robust pre-earnings analyst sentiment. This methodology targets companies with strengthening analyst outlooks.

Progressive (PGR) exhibits "strongly positive" sentiment (0.8) and 52 upward earnings estimate revisions in three months. Bank of America raised its price objective to $350 from $343, projecting a 44% upside, with analyst Shanker increasing his FY2026 EPS forecast to $20.40, 23% above consensus, citing underestimated earnings power. Charles Schwab (SCHW) also shows strong positive sentiment (0.7), with 33 upward earnings revisions and a 27% YTD stock increase, prompting BMO Capital Markets to initiate an outperform rating due to its robust wealth management model.

The overall market sentiment for this earnings season is "strongly positive" (0.75) and "bullish," suggesting optimism for companies meeting the screening criteria, particularly PGR and SCHW. JPMorgan Chase (JPM), Travelers (TRV), and Interactive Brokers Group (IBKR) are also noted for potential post-earnings lifts, though with lower individual sentiment scores.

Key Decisions for Investors

• Investors should closely monitor the upcoming Q3 earnings reports for Progressive (PGR) and Charles Schwab (SCHW), given their strong pre-earnings analyst sentiment and significant upward estimate revisions.
• Consider potential upside in PGR, as Bank of America's raised price target suggests substantial undervaluation based on analyst Shanker's higher EPS forecasts.
• Evaluate SCHW's performance, particularly its wealth management segment, which analysts view favorably for its growth profile and low capital intensity, despite BMO's price target being slightly below current levels.
• Maintain a bullish stance on the broader market for companies meeting similar positive screening criteria, while acknowledging that JPM, TRV, and IBKR also present potential, albeit with lower individual sentiment.