Until the beginning of the season earnings were a mixed bag. The numbers overall were relatively solid, with statements said that 70% of companies have exceeded consensus expectations of earnings in the beginning.
That was enough to move the S&P 500 index and approximately 5% from the end of March. But after a couple survived the period of active sales at the end of the week, major market indices remain largely flat this year. And I hope many of the Bulls that higher incomes will allow to overcome external pressure, as rising yields of Treasury and trade issues of the war seem to be a bit optimistic — at least for now.
But I still believe the US stock market has potential for significant growth in year out. And there’s plenty of time for earnings to inspire the confidence necessary to drive these gains. Three key earnings reports next week can go a long way in this.
The tech giant markets in their own way. For a long time the income of the favorite will try to get out of a longstanding rut. And fallen angel in the room will try and prove that there is still growth left, that was tough sector lately. All three releases are particularly important for reporting companies, as well as providing a potential spark to the market as a whole.
3 earnings reports to watch: the alphabet (numbers)
Income report date: April 23, after market close
Investors in the tech space will be closely watching first quarter report from the alphabet Inc (USA:stock markets,Nasdaq:good) on Monday Afternoon. Like the market overall, GOOGLЬ seen choppy trading over the last couple of months. And like the market overall,. there is room for considerable growth, if he can restore investor confidence.
Fundamentally, the alphabet looks able to do it. On the street looking for 20% growth in earnings per share on an annual basis. On 26х p/e multiple does not seem to enable this type of growth, especially considering the approximately $ 100 per share in net cash on the primers. But from the point of view of sentiment, the control of the alphabet needs to answer some tough questions at his press conference on Monday. Google potential risk to data privacy issues raised by the scandals on Facebook, ink. (Nasdaq:FB) is, without a doubt, will be a key theme.
And so trading stock markets on Monday, it seems that the benchmark for the rest of the market. If investors are really ready to start focusing on the good news from earnings, alphabet shares should rise. But if the market is still more concerned about the potential risks goes through, the numbers are likely to remain in the current range.
3 earnings reports to watch: Verizon (VZ)
Source: Via Flickr
Income report date: April 24 before the market opens
It is probably too much to ask for the first quarter will lead to a big step for Verizon communications Inc.at (NYSE:VZ). Shares of VZ have not moved for five years. Saturation and intense competition in the U.S. wireless space have the pressure of growth – and investors.
But a strong report could at least step in the right direction – and maybe gather some interest from investors. VZ stock looks cheap, barely 10x 2019 consensus EPS. Dividend yield of around 5% looks very attractive, even with the yield on Treasury bonds rising by 3%. If Verizon can convince investors it has any potential for sustainable growth, there is reason for long-term growth here.
After several years of stagnation in trade, one report will not be enough. But rumors are again swirling around the merger of Sprint Corp (symbol NYSE:From) And T-mobile USA, Inc. (US:TB), Verizon has an opening to return the favor with the market. Sprint-T-Mobile phones in theory will reduce competition and price pressure. EOI at the moment is the pricing of basically zero growth.
If Verizon could show some force with both subscribers and pricing, shares of VZ may be able to grow if more good news should be released on Tuesday.
3 earnings reports to watch: Chipotle (CMG)
Income report date: April 25, after market close
In this market, I would be very careful with the chipotle Mexican Grill, Inc. (NYSE:CMG) ahead of the afternoon Wednesday report. Shares of cmg has refueled after each of the last two earnings reports. The company and the stock is still not fully recovered from the outbreak of intestinal infection E. coli. Still, investors suggested Chipotle shares up to 34% with a five-year low touched in February.
That low was followed by a disappointing Q4 profit. But investors shrugged off the miss, thanks to the optimism about the new CEO Steve Ellis and hope for improvement.
The problem for CMG stock on Wednesday is that the optimism will be true. Ellis did not have yet time to make any real changes. The turn was stalled for several quarters in a row, no signs of improvement in the second half of 2017. And cmg now trades at 31 times the size of EPS estimates for 2019.
In other words, on Wednesday, the stock rose hope – but the report on Wednesday will show the conditions on the ground. If there were changes to some of the Bulls did not expect, CMG could easily be the third consecutive post-earnings plunge. The risk of inflated expectations meeting middling performance here is particularly high.
However, if Chipotle can show some progress, that would be great news for the stock CMG and the industry in General. Restaurant stocks, with rare exceptions, is not particularly good, despite a strong economy. If Chipotle is showing the way to improvement, it can brighten up the prospects for the entire industry. That seems like a lot to ask, however, and this is not the outcome that I would put ahead of Wednesday.
Hilary Kramer editor, GameChangers, breakout stocks, high octane trader, absolute capital return and cost on. She is experienced in investment and market strategist with more than 25 years of experience in portfolio management, market analysis, shares, trade and risk management. She has extensive experience in global financial management, asset allocation, investment banking and direct investment businesses, and is regularly called on to provide its analysis on Bloomberg, CNBC, Fox Business network and other media.