Zacks analysts reviewed Q3 earnings season results showing 38 S&P 500 companies with +48.7% earnings growth (boosted by Micron) and 84.2% EPS beat rate. Featured stocks include NVIDIA benefiting from AI infrastructure demand, Philip Morris transitioning to smoke-free products, Home Depot facing housing affordability headwinds but investing in digital initiatives, and microcap CPI Aerostructures showing strong defense revenue growth despite liquidity concerns.

Q3 earnings season shows mixed results with 38 S&P 500 companies reporting 48.7% earnings growth (boosted by Micron) and 84.2% EPS beats. Key stocks analyzed include NVIDIA benefiting from AI infrastructure demand, Philip Morris transitioning to smoke-free products with strong pricing power, and Home Depot facing discretionary spending headwinds but investing in digital and Pro segments. Additional coverage includes CPI Aerostructures, Flex, Suncor Energy, and Honda.

Philip Morris International is expected to report Q3 2026 revenue growth of 5.3% to $11.42 billion and EPS growth of 3.1% to $2.31, driven by strong demand for IQOS heated tobacco, ZYN nicotine pouches, and VEEV e-vapor products. However, headwinds including higher input costs, currency headwinds, excise-driven price increases in Japan, and increased competition in the U.S. nicotine pouch market may constrain profitability.

Philip Morris is expected to report Q3 2026 earnings of $2.31 per share (up 3.1% YoY) and revenues of $11.42 billion (up 5.3% YoY) on October 20. However, with an Earnings ESP of 0% and a Zacks Rank #3 (Hold), the stock is not considered a compelling earnings-beat candidate. While the company has beaten consensus estimates in all four of the last quarters, recent estimate revisions have been slightly negative, making it difficult to predict whether actual results will exceed expectations.

Zacks presents its investment research tools including Thematic Investment Screens and Style Scores (Value, Growth, Momentum, and VGM) designed to complement the Zacks Rank stock-rating system. The Zacks Rank #1 stocks have historically delivered +23.86% average annual returns since 1988, more than double the S&P 500. Philip Morris International (PM) is highlighted as a stock to watch with a #2 Buy rank and B VGM Score, benefiting from its expansion into reduced-risk products.

As consumer sentiment drops to a four-month low amid rising inflation and interest rate hike concerns, Zacks recommends four defensive consumer staples stocks: Coca-Cola, Philip Morris International, Mondelez International, and Dole plc. All four stocks carry Zacks Rank #2 (Buy) ratings with low beta values and solid dividend yields.

Altria and Philip Morris take divergent approaches to the tobacco industry's transition. Altria relies heavily on U.S. cigarette dominance with Marlboro commanding 59.6% premium market share, while gradually expanding smoke-free products. Philip Morris pursues global diversification with smoke-free products representing 42% of revenues across 109 markets. Philip Morris shows stronger growth prospects with 11.1% projected 2026 EPS growth versus Altria's 4.6%, earning a Zacks Rank #2 (Buy) compared to Altria's #3 (Hold).

McCormick & Company is expected to report Q3 2026 revenues rising 14.7% to ~$2 billion, but earnings may fall 11.8% to 75 cents per share. Growth drivers include the Flavor Solutions segment, pricing actions, and CCI productivity savings, while headwinds include consumer price sensitivity, competitive pressures, and inflationary expenses. The company carries a Zacks Rank #4 (Sell) with a negative Earnings ESP of -1.97%, suggesting limited likelihood of an earnings beat.

With consumer sentiment dropping to a 4-month low amid inflation concerns and potential interest rate hikes, Zacks recommends four defensive consumer staples stocks: Coca-Cola, Philip Morris International, Mondelez International, and Dole plc. All four stocks feature low betas and are positioned to weather economic uncertainty while offering dividend yields and earnings growth.

Zacks equity research analysts featured five stocks in their daily blog on September 18, 2026. Applied Materials benefits from AI-driven semiconductor demand with an Outperform rating. Philip Morris shows strong pricing power and smoke-free product growth despite declining cigarette volumes. Valero Energy outperforms its industry with favorable refining dynamics. Crimson Wine faces headwinds from weak direct-to-consumer demand and distributor bankruptcy risks. Global Self Storage maintains focus on secondary markets but faces operating cost pressures.

Altria Group is focusing on its premium cigarette segment, which generates 85% of profitability, as consumers shift toward discount offerings. Marlboro maintained its 59.6% premium segment share but saw overall cigarette market share decline 1.5 points to 39.5%. The company is expanding its discount brand Basic to capture trade-down demand while protecting Marlboro pricing power, with smokeable adjusted OCI rising 2.4% to $3.02 billion.

Altria Group has outperformed the S&P 500 in 2026 with 24% total returns, driven by better-than-expected earnings and renewed confidence in the tobacco industry's smokefree pivot. However, the stock has pulled back to the mid-$60s following Q2 earnings that showed slowing revenue growth and declining earnings. While trading at a cheap valuation with a 6.4% dividend yield, the company faces long-term risks if its smokeless product strategy fails to offset declining cigarette consumption.