We are in the midst of earnings season, with companies like Morgan Stanley (MS) and Goldman Sachs (GS) trying to lead the bulls for the coming week. Laggards like Alcoa (AA) and Intel (INTC) have also reported in the past two weeks, and the market seems mixed about the reaction that it's going to give on earnings thus far as a whole. Alcoa has since rebounded almost 12% and Intel has given a nod on Friday to cutting 5% of its workforce to reduce expenses.
Only 57% of the 53 S&P companies have beaten expectations - not exactly a sign of massive confidence for the quarter.
As we head into the short trading week, the larger markets are likely to be fueled not only by the usual economic data, but by the earnings from the bigger companies in the coming week that are likely to catalyze the major indices. Additionally, since there are plenty of large names reporting next week, it's likely that the "average" diversified investors will be paying attention to stocks that he/she holds through the week.
Here's 12 companies to watch in the coming week:
(All analyst estimates used are products of Yahoo! Finance)
Monday, January 20
Markets are closed in observance of Martin Luther King day.
Tuesday, January 21
Advanced Micro Devices (AMD)
- AMD stock is up 18.4% in the last three months and 69.9% in the last twelve months.
- AMD, which competes with Intel (INTC), is just going to be looking for positive earnings per share, as the company continues to try and "right" itself.
- Analyst estimates for the quarter are $0.06. Revenue estimate is $1.54 billion.
- Analysts have upgraded AMD projections for 2014 over the last few months.
- The company received a boost from having its chips used for the new PlayStation and Xbox consoles.
- Cautious bears have an eye on margins and market share versus Intel.
Delta Airlines (DAL)
- Delta stock has been up 24.2% in the last three months, and 128.3% in the last twelve months.
- Delta competes with United Continental (UAL), American Airlines (AAL), and other major air travel companies.
- The airline industry has been, sector wide, showing strength into 2014.
- Analyst estimates are for $0.63 EPS and revenue of $9.03 billion - growth of 125% and 5%, respectively.
- Delta is coming off of a strong third quarter report, which showed a 6% revenue beat and a 29% EPS beat.
- Delta's sector wide advantage comes from stronger profit margins than other airliners.
- Verizon stock is down 3.3% in the last three months, but up 13.7% for the last twelve months.
- Verizon competes with mobile carries like AT&T (T) and T-Mobile (TMUS); but also with cable conglomerates like Comcast (CMCSA) and Time Warner (TWC).
- Analyst estimates are for EPS of $0.65, up 44% YOY; and revenue of $31.04 billion, up 3.3% YOY.
- Verizon is also coming off a strong third quarter report, which has catalyzed the stock movement in the past few months.
- Verizon hopes to be able to monetize the results of the end of the net neutrality bill.
Wednesday, January 22
- eBay stock has waned, holding steady after the past twelve months.
- eBay is coming out of a holiday season where the focus has been on online retailers taking physical customers out of retail stores like Best Buy (BBY).
- PayPal new accounts, which generally track the growth of online shopping general, will be the important metric for eBay.
- eBay is considering growth in international markets like China.
- eBay earnings are drawing in bearish options bets, with puts outnumbering calls by a 6 to 1 clip.
- Firms & analysts have generally been cautious to bearish on eBay over the past few months - although the stock doesn't show it.
- Netflix stock has been a battleground moving into 2014, with Carl Icahn famously taking profits during last year.
- Netflix has a knack for making massive moves on earnings, and could be primed for some type of options spread that takes volatility either way into account.
- All eyes will be on subscriber growth (analysts looking for more than 2 million new users), and plans on Netflix's expansion internationally.
- Margins are expected to increase as a product of original content.
- Analysts are expecting $0.66 EPS, compared to $0.13 a year prior and revenue of $1.17 billion.
- SanDisk stock has traded up 7% in the last three months and 52.1% in the last twelve months. The company is trading near 52 week highs of $74 and has a $16.6 billion market cap.
- Analysts are expecting $1.57 EPS, compared to $1.05 a year prior. Analysts are also expecting $1.7 billion in revenue, compared to $1.54 billion the year prior.
- This earnings is on the heels of insider selling pointed out during Q4 2013.
- Zack's recently downgraded SanDisk to neutral, citing continued declines in PC sales and potential rising expenses that could negatively effect business.
Thursday, January 23
Fifth Third Bankcorp (FITB)
- Fifth Third stock has been up 37% in the last twelve months of trading - and in the midst of a sector-wide banking recovery.
- The financial services company is expected to report EPS of $0.42 on revenue of $1.52 billion.
- Fifth Third is part of a consortium of regional banks like KeyCorp (KEY), First Niagara, and SunTrust that are going to help to shape up the state of the banking industry under the surface of the big companies' earnings.
- McDonald's has traded with some stagnancy over the last year, up only 5% in the last twelve months.
- McDonald's is expected to report EPS of $1.39 on revenues of $7.11 billion.
- Competitor Wendy's impressed the street on earnings two weeks ago.
- Analysts polled by Reuters are expecting to see flat earnings for the quarter, decreasing by a percent or less.
- Investors will be looking for color on the effect of promoting new menu items, like its McWraps, and the limited return of the McRib.
- Jim Cramer thinks that McDonald's is fighting a battle against healthier eating.
- Although off 5.6% in the last three months, Starbucks has shown strength to the tune of 36.7% in the last twelve months.
- The coffee company is expected to report EPS of $0.69 on revenues of $4.30 billion.
- Could potentially be negatively effected by the decline in mall traffic, although many mall sales are also made up of mall employees.
- The company is targeting 10% revenue growth for 2014 and 1,500 new stores.
- Most analysts that cover Starbucks are expecting $2.68/share earnings for 2014 - well over the $2.55-$2.65 guidance offered by the company.
Other: Existing home sales report, housing price index.
Friday, January 24
Proctor & Gamble (PG)
- P&G has yielded a "safe" 14.2% over the last twelve months for investors in the consumer goods company.
- It is expected to report FY 2014 second-quarter EPS of $1.19 a share on revenue of $22.35 billion.
- Some analysts are forecasting slower than usual dividend growth for the company.
- Analysts continue to call for 10% growth for the company's stock heading through 2014, with a continued growing dividend. Bears are focused on in-store promotion costs and the company being "too big to implement" large changes if necessary.
- Xerox stock had an impressive 2013; up 11.8% in the last three months and 59.7% in the last twelve months. It's currently trading at $12.20.
- Xerox is expected to report FY 2013 fourth-quarter EPS of 25 cents on revenue of $5.65 billion.
- Despite coming up short on the top line in the last couple of quarters, Xerox has met or exceeded bottom line expectations in 2013 and looks to continue to "manufacture" profits in 2014.
First Niagara Bank (FNFG)
- First Niagara looks to keep strong momentum with the banks moving.
- First Niagara stock has gained 26.1% in the last twelve months.
- The bank is expected to report an FY 2013 fourth-quarter EPS of 20 cents on revenue of $363.46 million, compared with a profit of 15 cents a share on revenue of $344.11 million in the year-ago period.
- The company is currently working through, and expected to comment on, a restructuring where it is cutting 170 retail administrative jobs.