Stocks with earnings at risk from UBS
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In the midst of earnings season it can pay to look at the differential between earnings per share and operating cash flow, according to UBS.
"Earnings have typically moved closely with operating cash flow, but earnings have risen by much more than OCF the last year outside of Fins/Ener as firms have accrued less on the expense side and working capital has risen," strategist Keith Parker wrote in a note. "Reconnecting with operating cash flow, an arguably more reliable measure of profitability, would point to earnings downside of ~15% for S&P (SP500) (NYSEARCA:SPY) (VOO) (SPLG) ex Fins (XLF)/Ener (XLE)."
"With the median accrual (earnings-OCF dif) at an all time high pointing to broad EPS risk, the high vs low accrual spread is also near the wides making accruals a critical factor to identify relative earnings risk or resilience across stocks."
"Our 'at risk earnings' screen uses the reverse criteria of high accruals in the top 15%ile and P/E increase/weaker revisions," Parker said.
The screen covers S&P 1500 (SPTM) stocks, sector neutral with a market cap of at least $3B and excluding Financials and Energy.
The earnings-at-risk stocks are:

Dish Network (DISH)
Paramount Global (PARA)
Fox Factory (FOXF)
PulteGroup (PHM)
KB Home (KBH)
Meritage Homes (MTH)
Newell Brands (NWL)
D.R. Horton (DHI)
Pool Corp. (POOL)
Lithia Motors (LAD)
McCormick (MKC)
Tyson Foods (TSN)
Pilgrim's Pride (PPC)
Halliburton (HAL)
SLB (SLB)
NOV (NOV)
Masimo (MASI)
Penumbra (PEN)
Azenta (AZTA)
Zoetis (ZTS)
Organon (OGN)
Moderna (MRNA)
Terex (TEX)
Stanley Black & Decker (SWK)
Lennox International (LII)
EnerSys (ENS)
Generac Holdings (GNRC)
Pentair (PNR)
Univar Solutions (UNVR)
ITT (ITT)
Qualcomm (QCOM)
Teradyne (TER)
Lam Research (LRCX)
Silicon Labs (SLAB)
Monolithic Power Systems (MPWR)
National Instruments (NATI)
Arrow Electronics (ARW)
Vontier (VNT)
Cabot (CBT)
Reliance Steel & Aluminum (RS)
Ball Corp. (BALL)
UGI (UGI)
OGE Energy (OGE)
Spire (SR)
Allete (ALE)

See the stocks de-risked from earnings.