Nvidia, Micron and Super Micro among companies that shine in Wall Street's 'beat-and-raise' game
By Philip van Doorn
Rising earnings estimates can support higher stock prices over time
Quarterly earnings season can be routine for many companies, with sales and profits typically coming in ahead of analysts' expectations. But the results can also drive a "beat-and-raise" pattern that leads to share prices rising over time, aligning with consensus estimates.
Now that about 80% of companies in the S&P 500 SPX have reported their quarterly results, this is a good time to list the ones whose earnings estimates have increased the most. And since an earnings-per-share figure can be distorted for any one quarter or fiscal year from one-time events, we have looked at consensus estimates for calendar 2025, to see which companies have had their profit expectations lifted the most.
A different deep dive: Here's how Wall Street analysts' favorite stock picks performed over the past 5 years
Forward P/E ratios
A commonly used valuation metric for a stock is the forward price-to-earnings ratio, which is the current price divided by the consensus earnings-per-share estimate for that company over the next 12 months.
On that basis, the S&P 500 appears to be expensive, because its weighted forward P/E has increased to 20.5 from 18.2 a year ago, according to FactSet. That 20.5 P/E compares with a five-year average P/E of 19.5 for the index and a 10-year average of 18.1.
For an individual stock, possible distortions to bottom-line results from one-time events, including noncash write-downs, can make for some wild swings in P/E ratios based on 12-month estimates. This is why the table below includes P/E calculated using current share prices and consensus 2025 EPS estimates.
The S&P 500 trades for 18.9 times the weighted consensus 2025 EPS estimate.
Stock screen for increases in consensus 2025 EPS estimates
For this screen of the S&P 500, we looked at current consensus estimates for calendar 2025 earnings per share and those as of Feb. 15 to see which ones had increased the most.
We excluded real-estate-investment trusts from the group, because of this industry's tax advantage for passing 90% of its earnings to shareholders through dividends. Within the REIT industry, funds from operations (FFO) is generally considered a useful figure to measure dividend-paying ability. FFO adds depreciation and amortization (noncash figures) back to earnings, while netting out gains on the sale of property. We can take the idea further by looking at adjusted funds from operations (AFFO), which nets out costs to maintain properties that REITs rent out.
It turns out that among the 30 REITs in the S&P 500, none of them has seen an increase of 10% or more for consensus 2025 AFFO estimates since Feb. 15.
Among the rest of the S&P 500, consensus EPS estimates for calendar 2025 have increased by 10% or more for 17 companies since Feb. 15. Please see the notes below the table for more details about the data.
Company Ticker Increase in 2025 EPS estimate since Feb. 15 Est. 2025 EPS Estimated 2025 EPS as of Feb. 15 Price/ 2025 EPS estimate Forward P/E (NTM) Forward P/E (NTM) one year ago
Western Digital Corp. WDC 30.1% $7.58 $5.83 9.5 10.7 N/A
Micron Technology Inc. MU 26.5% $8.56 $6.77 13.9 21.3 N/A
Super Micro Computer Inc. SMCI 25.7% $38.54 $30.66 21.3 25.3 12.5
Constellation Energy Corp. CEG 21.7% $8.33 $6.85 25.0 26.2 17.5
Nvidia Corp. NVDA 20.3% $30.35 $25.23 29.8 33.7 58.7
Seagate Technology Holdings PLC STX 19.9% $6.87 $5.73 13.1 18.1 26.8
Marathon Petroleum Corp. MPC 18.9% $17.29 $14.54 10.5 10.0 6.5
Steel Dynamics Inc. STLD 17.1% $10.29 $8.78 12.7 11.3 7.5
Insulet Corp. PODD 15.1% $3.88 $3.37 45.3 52.6 188.9
Universal Health Services Inc. Class B UHS 14.8% $15.03 $13.10 11.3 12.1 13.6
Valero Energy Corp. VLO 14.7% $14.47 $12.62 10.9 9.6 5.4
Newmont Corp. NEM 14.5% $2.88 $2.51 14.4 16.4 20.1
MGM Resorts International MGM 14.1% $3.18 $2.78 12.6 14.0 19.9
Progressive Corp. PGR 12.6% $11.78 $10.45 18.3 19.1 21.6
Hess Corp. HES 12.2% $11.33 $10.10 13.9 15.8 20.6
Royal Caribbean Group RCL 10.4% $12.59 $11.40 11.2 12.3 15.1
GE Aerospace GE 10.2% $5.25 $4.76 32.2 37.3 37.2
Source: FactSet
The table includes forward price-to-earnings ratios based on the consensus 2025 EPS estimates, but it also includes the usual forward P/E based on consensus estimates for the next 12 months. These are marked "NTM" and are also shown as of a year ago for comparison. For Western Digital Corp. (WDC) and Micron Technology Inc. (MU) the year-earlier forward P/E numbers are marked "N/A" because, at that time, the rolling 12-month EPS estimates were negative.
We used calendar-year estimates for 2025 EPS for a uniform set of data because many companies' fiscal years don't match the calendar.
All 17 companies had reported results for fiscal quarters ended Feb. 29 or later through Wednesday, except for three:
Constellation Energy Corp. CEG reported its first-quarter results Thursday morning, with $6.16 billion in revenue coming in 7% below the consensus estimate of $6.62 billion among analysts polled by FactSet. But quarterly EPS of $2.78 were more than double the consensus EPS estimate of $1.30. Any change to analysts' estimates resulting from this earnings announcement aren't reflected in the table.Insulet Corp. PODD is scheduled to report its first-quarter results after the close on Thursday.Nvidia Corp. NVDA is scheduled to announce results for the first quarter of its fiscal 2025 after the close on May 22.
Leaving the companies in the same order, here are year-to-date total returns for the stocks (with dividends reinvested), along with a summary of analysts' opinions:
Company Ticker Share "buy" ratings Share neutral ratings Share "sell" ratings May 8 price Consensus price target Implied 12-month upside potential Western Digital Corp. WDC 76% 20% 4% $72.04 $89.21 24% Micron Technology Inc. MU 87% 5% 8% $119.32 $135.00 13% Super Micro Computer Inc. SMCI 65% 30% 5% $822.64 $999.62 22% Constellation Energy Corp. CEG 67% 33% 0% $208.00 $199.00 -4% Nvidia Corp. NVDA 88% 12% 0% $904.12 $999.01 10% Seagate Technology Holdings PLC STX 50% 37% 13% $90.05 $97.90 9%
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