ASX stocks that have delivered pleasant surprises during the reporting season have been outperforming the S&P/ASX 200 Index (Index:^AXJO).
Some recent examples include the GPT Group (ASX: GPT) share price, Aurizon Holdings Ltd (ASX: AZJ) share price and James Hardie Industries plc (ASX: JHX) share price.
Here are two other ASX 200 stocks that may beat expectations when they hand in their earnings report card next week.
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Earnings surprise on strong tailwinds
One possible reporting season hero is the AMCOR PLC/IDR UNRESTR (ASX: AMC) share price. Macquarie Group Ltd (ASX: MQG) noted that other packaging companies like Berry, Sealed Air and Huhtamaki have all reported results that exceeded consensus forecasts.
It's also worth noting that the COVID-19 crisis triggered a surge in demand for a range of consumer goods that Amcor is exposed to. More than 95% of the group's sales are linked to food, beverages, healthcare and personal care.
Double-digit growth
Macquarie is forecasting Amcor to deliver earnings per share (EPS) growth of between 10% and 11% for FY20, and a further 9% in the current financial year.
Not many companies can boast of having double digit growth in the past year and if the positive tailwinds continue into 2021, the broker's 9% forecast for FY21 may look conservative.
Amcor will report its results on 18 August. Macquarie is recommending Amcor as "outperform" (or a "buy") with a price target of $16.81.
Cream rises to the top
Another stock that looks poised to beat the street is the A2 Milk Company Ltd (ASX: A2M) share price.
UBS believes the infant formula (IF) company will post a FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) that is around 4% above consensus.
The broker came to this conclusion by compiling the sales data of A2's products across different channels and analysed its operating expenses. The market is underestimating A2's profit margins.
Positive FY21 outlook expected
"Our revenue growth indicator is in line with market consensus with strong IF growth via CBEC [cross border e-commerce] countering headwinds in small daigou and MBS [Mother and Baby Stores]," said UBS.
"Our analysis suggests A2M enters FY21 with a record CBEC market share in July and MBS sales ahead of pre-COVID-19 helped by a larger store footprint.
"Plus channel checks point to wholesale price increase of ~5% phased in over 1HFY21."
However, Australian distributors may be holding excess stock and weak gift store demand could offset some of these positives.
Nonetheless, UBS is recommending investors buy the ASX and New Zealand listed stocks. It's price target on A2M is NZ$22 a share.
A2 Milk is expected to report its results next Wednesday.
