05 Feb The Earnings Beat: Five Stocks To Watch For the Coming Week
Football fans will be glued to their TVs on Sunday evening as defending champions New England Patriots take on the Philadelphia Eagles in Super Bowl LII. Indeed, Sunday’s Big Game will be the main attraction. But investors are hoping that Monday brings a big recovery in the stock market, which got rocked on Friday.
The Dow plunged nearly 700 points, despite what has been broadly positive earnings results from several Wall Street bellwethers, particularly consumer-driven names like Amazon (AMZN) and Apple (AAPL). When it was all said and done, the Dow sunk 665 points Friday, which, along with the 60-point decline in the S&P 500, marks their biggest weekly declines in two years.
Why? According to some analysts, equities were punished due to a combination of higher interest rates and accelerating bond yields. But is it really time to panic? There are still tons off positive events to suggests that this decline will be (or should be) short-lived. Friday’s jobs report not only showed continued strength job growth, but also the increased buying power of consumers as average hourly wages rose 2.9%.
From my vantage point, the sharp selloff on Friday presented a solid buying opportunity for stocks that are due to report earnings this coming week and beyond. As such, here are a few stocks that will make headlines this week for you to keep on your radar.
Chipotle (CMG) – Reports after the close, Tuesday, Feb. 6.
Wall Street expects EPS of $1.32 per share on revenue of $1.12 billion, compared to the year-ago quarter of 55 cents per share on $1.03 billion in revenue.
What to Watch: UBS analyst Dennis Geiger last week downgraded CMG shares on fears that consensus estimates for this year and 2019 are too high. “Online review trends have continued to trend downward and have now dropped below pre-food safety crisis lows,” noted Geiger.
Disney (DIS) – Reports after the close, Tuesday, Feb. 6.
Wall Street expects EPS of $1.61 per share on revenue of $15.46 billion, compared to the year-ago quarter of $1.55 per share on $14.78 billion in revenue.
What to Watch: Last quarter CEO Bob Iger revealed plans to roll out the company’s ESPN Plus streaming platform, slated for early spring. There are reports that Disney may seek to undercut Netflix (NFLX) by pricing the service at a significant discount.
Tesla (TSLA) – Reports after the close, Wednesday, Feb. 7.
Wall Street expects a per-share loss of $3.10 on revenue of $3.28 billion, compared to the year-ago quarter of a loss of 69 cents per share on $2.28 billion in revenue.
What to Watch: It’s all about Model 3 deliveries. According to InsideEv, which tracks electric vehicle sales, Tesla in January delivered some 1,875 Model 3s in December, which is more than 800 vehicles nigher than December level of 1,060 units. But the publication noted that the figure was “not as high as projected or expected.” Will Wall Street agree?
Activision (ATVI) – Reports after the close, Thursday, Feb. 8.
Wall Street expects EPS of 93 cents per share on revenue of $2.54 billion, compared to the year-ago quarter of 92 cents per share on $2.45 billion in revenue.
What to Watch: Thanks to positive results from Electronic Arts (EA), which surged more than 7% on last week’s earnings, Activision rose to all-time highs. Citing strong holiday sales for hits such as Call of Duty: WWII, analyst Robinson Humphrey of SunTrust lifted his Q4 estimates for Activision to a price target to $77 from $72, implying 11% premium from current levels.
Nvidia (NVDA) – Reports after the close, Thursday, Feb. 8.
Wall Street expects EPS of $1.16 on revenue of $2.67 billion, compared to the year-ago quarter of 99 cents per share on $2.17 billion in revenue.
What to Watch: NVDA shares have been under pressure as the cryptocurrency market have pulled back. Though its chips have grown due to crypto-mining, gaming is still the company’s main revenue driver, accounting for 60% of last quarter’s $2.2 billion in sales. That segment is growing at a healthy rate of 51%.
Investors of these five stocks, as well as the barrage of earnings slated to report this week, should feel good about the direction of corporate profits amid the tax overhaul that should support wage increases and business investments. As such, I’ll be rooting heavily for the market to recover on Monday from Friday’s decline as much as I’ll be rooting the Eagles on Sunday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.