Headlines are pessimistic right now, but the real story in the markets is more bullish.

 

Yes, the government shutdown and interest rate uncertainty have been an overhang on the markets. But this earnings season has quietly delivered some of the strongest results we’ve seen in years. 📈

 

91% of companies reported, and 82% have beaten expectations.

Revenues are up 8.3% year-over-year.

And the 12-month, bottom-up price target for the S&P 500 is 7,837.

 

Don’t forget to focus on fundamentals. Watch Lizzie’s full Fox interview with Charles Payne for stocks we like.

 

Transcript:

My next guest has also been really positive on the banks, especially Goldman Sachs. I’m going to bring in now Evans May Wealth managing partner Elizabeth Evans. And Elizabeth, you gave our audience also Citi.

But I just got to ask you, this Goldman move is phenomenal. It broke out. Are you still holding? Is it still a buy?

It is. It’s still a buy. And, I think to Dan’s point, you can’t just monolithically look at the sector but look at the individual companies. So, we like Goldman. We like Citi, really, in the financials because it’s trading below book value. So, compared to some of its peers like Bank of America and JPMorgan, it’s still less than one on tangible book.

They’ve announced a $20 billion share buyback plan over multiple years. That happened in January. So, we think that there’s continued upside here. But you have to be selective in the names that you own.

 

All right. So, you talk about being selective. Dan was talking about things in relative performance. In other words, if this market takes a hit, yeah, you may be in certain things that go down less than others.

Are you as pessimistic about where this market may go for the next few months?

Well, I thought his comments on interest rate outlook and the pace of interest rate cuts were certainly interesting. But if we take a step back, let’s talk about earnings, Charles. So, you know, as of last Friday, 91% of companies in the S&P 500 had reported.

And of those reporting, 82% beat expectations. So, that has been completely overshadowed by the government shutdown and interest rate concerns. But that is the largest number of cuts we’ve seen in the last four years. And it’s not just earnings. Companies are also executing on revenue. Revenue growth was up 8.3%. Margins are expanding to the tune of 13%.

So, companies are really hitting across all fronts. So now, if you look at the bottoms-up price target on the S&P for the next 12 months, we’re at 7,836. So, that implies another 14.5% upside from here. So, I do think we’ll have volatility as we see more fed governor speak, perhaps the labor market. But longer term, I still believe we’re in a secular bull market with continued upside.

 

And for the record, I’m with you as well. But I feel like the Hawks are, I don’t know, they’re on a mission every day. The Hawks are out there. They’re out there, they’re out there. I’m not sure. I feel like it’s political, but that’s something different. Listen, we’re running out of time. I want to give you props.

Last time you were here, Google, Palo Alto Network. Lilly through the roof. You also gave us this Huntington Ingalls (HII). And you still, you said you still like it? It’s well above the 50-day, it’s broken out. But you think people can still buy it here?

I do, so Huntington Ingalls, or HII, is a great way to play defense and national security.

So, HII and General Dynamics really have a duopoly in Navy shipbuilding. They are building both nuclear and non-nuclear ships, submarines, all 31 aircraft carriers. And they have been doing this for the Navy since 1933. So, they’re improving operations, they’re expanding margins. And I think that this tailwind continues, given they’ve got $56 billion in revenue backlog, and you have strong government spending behind them.

So, while I think when we talked in September, it’s outperformed the broader market 6 to 1, there’s still upside from here.

VTR is another name you like. We’ve got 30 seconds. But I want to hear the story on this because it’s already made a parabolic move.

Yeah. So, Ventas is healthcare REIT, senior living, healthcare-related properties.

They acquire, own, and then operate them. So, if you look at their net operating income, 71% of that is senior living. And we expect net operating income growth to be in the double digits over the next several years. So, if you look at just, Charles, at the demographics of our country that need senior living, and it’s expected that baby boomers will spend four times more than the national average per capita on healthcare.

So, this is a company that’s still trading from a PE standpoint below 20, has a dividend yield of 2.5%. So, still relative to its peers, there’s upside here. You’ve been hot, Elizabeth. Thanks a lot. We needed you today. Appreciate you. Thank you, Charles. Alright, see you soon.