According to Trivariate Research founder Adam Parker, a screening of stocks indicates that some well-known companies are projected to experience gross margin contractions of at least 1% in the upcoming fiscal year.
This trend is concerning as firms that have previously seen over 100 basis points of margin contraction have underperformed their industry averages by more than 15% over the past year, marking the worst performance for this group in approximately 25 years. Among the companies identified, Apple is expected to see a 1.4% decline in margins, coinciding with CEO Tim Cook's departure after 15 years.
Despite a 16% rise in Apple's shares in 2026, analysts suggest limited upside potential of less than 2% over the next year. Oracle is projected to face a more severe margin decline of over 6%, with its shares down more than 23% this year, potentially ending a three-year winning streak.
However, analysts remain optimistic about Oracle's recovery, with a buy rating and a price target implying around 70% upside. Additionally, Altria Group is expected to experience a margin shrinkage of over 14%, although its stock has risen nearly 20% this year, with analysts anticipating only a modest 2% increase in the next year.
The findings highlight the importance for management teams to communicate clear strategies for margin expansion to investors