Earnings playbook: Beware of these stocks reporting soon where analysts are slashing their earnings expectations

Published Wed, May 1 20243:00 PM EDTUpdated Wed, May 1 20243:16 PM EDT

While this earnings season is shaping up to be a strong one, the sell-offs for companies falling short of expectations have been particularly brutal. To help investors avoid this scenario, CNBC Pro has identified stocks that investors should beware of due to estimates being significantly lowered ahead of the reports. More than 60% of S & P 500 -listed corporations have already posted financial results as of Wednesday afternoon, according to FactSet. Of those that are done reporting, more than 3 out of every 4 have exceeded Wall Street's expectations. Still, investors should be watchful of specific names as higher interest rates pinch corporate profits and weigh on consumer habits. To find these stocks, CNBC Pro searched S & P 500 companies reporting next week that have seen the biggest drops to the value of the average analyst earnings estimate over the past three months. CNBC Pro also included data on the six-month change to estimates, as well as any moves to the average price target over the past three months, for awareness. Here are the 10 that have seen per-share earnings predictions ratcheted down the most: Analysts have grown bearish on NRG Energy . The energy company has seen some of the biggest cuts to its average earnings per share estimates from analysts, down about 50% from three months ago. That is a worrisome sign after a period of strong performance. NRG has run up about 40% this year, and is sitting within 2% of the average price target from analysts. This is especially notable given that the average analyst target has risen nearly 75% over the past six months. NRG YTD mountain NRG, year to date Since the stock is hovering near where Wall Street expects it to trade at in 12 months, that can mean it is a bad time to add exposure. The typical analyst also has a hold rating on the stock, according to FactSet. The recent rally can be tied to excitement around the need for electricity from NRG and other companies to power the artificial intelligence revolution , Gordon Haskett's Don Bilson told clients last month. But Bilson noted the Texas-based business has yet to name a new chief executive, creating some uncertainty that could be amplified if the stock is not performing so well. "So long as the stock continues to work, investors can't really fault the company for easing into this important decision," Bilson wrote to clients, adding that the search was given a "leisurely timetable." Match Group also made the list, with the average analyst earnings per share estimate falling more than 16% over the past three months. Unlike NRG, the Tinder and Hinge parent has dropped more than 13% in 2024. The average analyst price target for Match has fallen almost 18% over the past six months given that sell-off. But that average price target still implies upside of around 40%, per FactSet, which underscores the magnitude of its recent slide. Despite that underperformance, the average analyst polled by FactSet has a buy rating.