Earnings season has now kicked off and countless ASX shares are getting ready to hand in their report cards.
Goldman Sachs has been running the rule over the market and has picked out a number of ASX shares as having the potential for positive and negative earnings surprises.
Among its positive surprise candidates are the ASX shares listed below. Let's check them out.
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Which ASX shares could positively surprise?
There are total of nine ASX shares that the broker has tipped to positively surprise. They are:
- Capitol Health Ltd (ASX: CAJ)
- Data#3 Limited (ASX: DTL)
- Endeavour Group Ltd (ASX: EDV)
- Judo Capital Holdings Ltd (ASX: JDO)
- Megaport Ltd (ASX: MP1)
- QBE Insurance Group Ltd (ASX: QBE)
- Santos Ltd (ASX: STO)
- Qantas Airways Limited (ASX: QAN)
- Woolworths Group Ltd (ASX: WOW)
Let's narrow things down and focus on a few of these ASX shares to see why Goldman is so positive.
For Qantas, the broker is expecting strong travel demand to underpin a stellar result. It believes this will leave Qantas with debt levels notably lower than its targets. As a result, the broker suspects that an $800 million share buyback could be coming.
In respect to Santos, the broker expects "momentum to build on recent oil prices rises."
For Woolworths, the broker believes the company's margins will be stronger than expected "compared to key competitor COL."
Finally, for Endeavour, the broker feels the market is being too negative on its performance. It said:
We expect Q4 retails sales to grow +1.8% compared to 0.2% in Q3 as pass through of part of Alcohol excise increase takes affect. We expect Dan Murphy's will achieve market share above market expectation as consumers have become more price conscious and favour price leaders such as Dan Murphy's.
Time will tell if Goldman has made the right calls.
