Morgan Stanley sees upside surprises from Western Digital, Citi, RTX in Q1 2026

MarketMoodz Analysis

For investors, the MS call highlights three names with the highest odds of beating street forecasts in Q1 2026, potentially influencing sector rotations and hedging during earnings season. The Earnings Surprise Composite combines earnings-forecast signals, parity, and forecast dynamics to rank candidates, offering a data-driven edge in a crowded period for results.

Western Digital’s last reported quarter beat estimates, but the stock slid more than 10% the next day and then recovered about 16% over the subsequent two sessions, underscoring the volatility around memory names and the need to watch guidance and demand signals closely. RTX has faced a geopolitically influenced path since the U.S.–Iran developments, with its shares modestly lower versus late February, a dynamic investors should monitor as the cycle unfolds.

Citigroup’s expected $2.67 per-share on roughly $23.34 billion in revenue, and RTX’s $1.50 EPS on about $21.39 billion in revenue set the bar for consensus in Q1, providing a benchmark for the MS framework’s forecast-driven upside bets. The trio spans tech hardware, financials, and defense/industrial tech, illustrating how macro dynamics, guidance, and sector exposure shape earnings optimism.