CWS Market Review – May 8, 2026

“We suffer more in our imagination than in reality.” – Seneca

It’s hard to not be impressed by this latest market surge. As you know, I’m not one for predicting bubbles, but things are getting a bit unreal.

Since March 30, the S&P 500 has gained 15% while the Nasdaq is up more than 24%. Over that time span, the S&P 500 Tech ETF is up by 33% while the non-tech part of the index is up a scant 9%.

It’s an odd market when you’re up by 9% in a little over a month and yet feel that you’ve badly underperformed the market.

Crude oil fell recently on the hopes that some deal can be reached between Iran and the U.S. regarding the Strait of Hormuz. Consumers are feeling stretched. Shares of Whirlpool got clocked on Thursday after the appliance maker said that its business has run into a brick wall.

The New York Fed released a report this week that said that lower-income folks are feeling the pinch of higher gasoline prices.

So far, this has been a good earnings season for our Buy List. Except for American Water Works and Stryker, every stock either beat or met earnings.

Last Friday, IES Holdings had a blowout earnings report and the shares rallied to a 52-week high. Allison Transmission beat earnings by more than 20%. Henry Schein beat earnings and reaffirmed guidance. McKesson beat earnings and offered strong guidance.

FactSet gave us a nice dividend hike. This is the 27th year in a row that FDS has raised its dividend. Cencora beat earnings and raised guidance, but it lowered its sales forecast. I’ll go over the details in a bit. But first, let’s look at our final Earnings Calendar for Q1.

Q1 Earnings Calendar

Here’s our complete earnings calendar for the first quarter of 2026:

Five Buy List Earnings Reports

Last Friday, shortly after I sent you last week’s issue, IES Holdings (IESC) reported its fiscal Q2 earnings. For the quarter, the company made $4.16 per share. That’s up 26% over last year’s Q2. Not enough analysts follow IESC for us to say there’s an earnings consensus.

The numbers were pretty good. Quarterly revenue rose 17% to $974 million. Operating income was up 21% to $112.3 million. As of March 31, IES had a backlog of approximately $3.9 billion. That’s a good sign for future business. The company’s business is divided into four divisions: Communications, Residential, Infrastructure Solutions and Commercial & Industrial.

Management said that while the other divisions were doing well, their Residential division “faced continued pressure from weak housing starts and unfavorable weather.” The company also said that it’s started “to see growth in our multi-family backlog.”

IESC said it “ended the quarter with $49.5 million of cash, $35.0 million debt, and $214.0 million of marketable securities.” During the quarter, the company bought back 4,112 shares for $1.7 million, or an average price of $418.31 per share. IESC ended the quarter with $166.2 million left in the current buyback authorization.

IESC is a large and multifaceted business. If you want to learn more about the details of IESC, you can check out this Investors presentation from earlier this year. This week, I’m raising our Buy Below on IESC to $700 per share.

After the close on Monday, Allison Transmission (ALSN) reported very good earnings for its fiscal Q1. This is good to see because Allison missed its Q4 earnings but offered reassuring guidance.

For Q1, Allison made $2.57 per share compared with estimates of $2.10 per share. Net sales were up 84% to $1.4 billion, but that figure includes Allison’s Off-Highway which was added at the start of this year.

Allison ended Q1 with $311 million of cash and cash equivalents, and $845 million of available borrowing capacity under its revolving credit facility.

For this year, Allison expects consolidated net sales of $5,575 to $5,925 million, and net income in the range of $600 to $750 million. Both of those are unchanged from the previous guidance. The guidance works out to 2026 earnings of about $2.50 per share.

Allison is turning into a nice winner for us this year. We’re sitting on a 26% YTD gain. Allison remains a buy up to $130 per share.

On Tuesday afternoon, Henry Schein (HSIC) reported Q1 earnings of $1.32 per share. That’s up 15% over last year’s Q1 and it topped Wall Street’s consensus by 10 cents per share.

If you’re not familiar with Henry Schein, it’s a one-stop shop for healthcare products with a focus on dental supplies and veterinary products.

This was a good quarter for HSIC. CEO Fred Lowery said, “I am pleased with our strong first quarter results that reflect continuing momentum from the second half of last year as we grow market share and expand gross margins.”

Total net sales were up 6.3% to $3.4 billion. Adjusted EBITDA for the quarter was $289 million, up from $259 million for last year.

During Q1, HSIC bought back $1.6 million shares at an average price of $77.64 per share for a total of $125 million. They’re not done. The company has another $655 million authorized to buy back more shares.

The company also stood by its guidance for this year. HSIC expects earnings to range between $5.23 and $5.47 per share. It also sees sales growth of 3% to 5%. This week, I’m dropping our Buy Below on Henry Schein to $80 per share.

On Wednesday, before the opening, Cencora (COR) said it had Q2 sales of $78.4 billion. That’s up 3.8% over last year but it was below Wall Street’s expectations. Cencora also lowered its full-year sales guidance to growth of 4% to 6%. The previous guidance had been for sales growth of 7% to 9%.

Cencora blamed the lower guidance on “lower expectations for revenue growth in the U.S. Healthcare Solutions segment.” Traders punished the stock on Wednesday’s trading. By the closing bell, Cencora had lost 17%.

Still, the company had a decent Q2, plus it raised its earnings guidance. Cencora’s Q2 earnings rose 7.5% to $4.75 per share. That beat the Street by two cents per share. Cencora raised its full-year guidance range to $17.65 to $17.90 per share. The previous guidance was $17.45 to $17.75 per share.

Cencora recently bought the equity it didn’t already own in OneOncology, a leading management-services organization for oncology practices.

CEO Robert P. Mauch said, “As we move into the second half of our fiscal year, we are pleased to have made progress on debt paydown and to be in a position to resume opportunistic share repurchases.” Cencora said it’s aiming to buy back $1 billion in shares this year.

I know this was a tough week for Cencora, but I still like the stock. It’s been a nice winner for us. This week, I’m dropping our Buy Below on Cencora to $275 per share.

On Thursday, McKesson (MCK) reported fiscal Q4 sales of $96.3 billion. That’s an increase of 6%. Earnings rose 16% to $11.69 per share which was 12 cents more than estimates.

McKesson started a $2.25 billion accelerated share buyback program. The board also approved a $5 billion increase to the current buyback program. That brings the total authorization to $7.7 billion.

For the entire fiscal year, McKesson increased its revenues by 12% to $403.4 billion. Earnings increased 18% to $39.11 per share. Cash flow from operations was $6.2 billion and free-cash flow was $5.4 billion. Last year, McKesson returned $5.1 billion to shareholders through $4.8 billion of stock repurchases and $381 million of dividends.

For the new fiscal year, McKesson expects earnings of $43.80 to $44.60 per share. That’s an increase of 12% to 14%. The company targets a long-term growth of 13% to 16%.

I’m impressed by these numbers. McKesson is a buy up to $1,000 per share.

Buy List Updates

FactSet (FDS) announced that it’s raising its quarterly dividend from $1.10 to $1.16 per share. This is the 27th consecutive year that FactSet has increased its dividend. The new dividend will be paid on June 18 to holders of record at the close of business on May 29.

A few weeks ago, FactSet reported very good earnings. For its fiscal Q2, FactSet made $4.46 per share which was eight cents better than Wall Street’s forecast. The company also increased its full-year guidance range to between $17.25 and $17.75 per share. The Q3 earnings report will be sometime in mid-June. FactSet is a buy up to $220 per share.

That’s all for now. No more earnings next week. However, we’ll soon be upon our off-cycle stocks. That means will soon get earnings reports from stocks like Heico and Intuit. The big econ report to look out for will be Tuesday’s CPI report. We know Americans are paying more for gasoline, but has that spilled over into other areas? On Thursday, we’ll get the retail sales report. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Posted by on May 8th, 2026 at 7:08 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.