Weekly Market Preview: Five Stocks To Watch For the Coming Week (HPE, MRVL, LULU, DOCU, AVGO)
Have the bulls finally regained control of this market?
Equities ended higher Friday, thanks to optimism that the U.S. and China could settle their trade differences following a meeting between President Donald Trump and Chinese leader Xi Jinping at the G-20 summit in Argentina. China could resume buying U.S. farm and energy products if the U.S. defer a scheduled increase in tariffs on Chinese products, according to The Wall Street Journal.
The upbeat comments help the S&P 500 index (up 22.41 points, or 0.8%) and the Nasdaq Composite (up 57.45 points, or 0.8%) to log their best week since 2011. Meanwhile, despite being down by as much as 72 points at the open, the Dow Jones Industrial Average rebounded 199.62 points, or 0.8%, to close at 25,538.46. For the week, the Dow climbed 5.2%, while the S&P 500 index rose 4.9%. The Nasdaq was the biggest gainer, advancing 5.6% as techs rallied from recent lows.
Friday’s gains and investors’ appetite for equities were also buoyed by commentary by Federal Reserve President John Williams who suggested that the Fed was undergoing a “review” of its interest-rate policy. The likelihood the Fed could tolerate higher inflation rates than it is current 2% target may remove the danger of the Fed being too aggressive with interest rate increases, which would bode well for stocks.
This would be music to the ears of investors, who have celebrated record earnings and profits and affirming the bulls are, in fact, back in control of the market. Finally, as the third the quarter earnings season fades, here are five stocks to keep an eye on for this coming week.
Hewlett-Packard Enterprise (HPE) – Reports after the close, Tuesday, Dec. 4
Wall Street expects the company to earn 43 cents per share on revenue of $7.84 billion. This compares to the year-ago quarter when earnings came to 31 cents per share on revenue of $7.66 billion.
What to Watch: HPE shares have disappointed investors, falling some 10% over the past six months. While the company has beaten Wall Street’s consensus earnings estimates in five of the previous six quarters, the numbers themselves have been less-than stellar. During that span, revenue growth has come by an average decline of double digits. On Tuesday Wall Street will want to see not only better numbers for this quarter, but also guidance that suggests HPE’s Cloud market share can grow amid the dominance of Amazon (AMZN), Microsoft (MSFT) and Salesforce (CRM).
Marvell (MRVL) – Reports after the close, Tuesday, Dec. 4
Wall Street expects Marvell to earn 32 cents per share on revenue of $844.82 million. This compares to the year-ago quarter when earnings came to 34 cents per share on revenue of $616.3 million.
What to Watch: Semiconductor company Marvell hasn’t had the type of year investors had hoped for, especially amid the recent chip selloff, during which the stock has plunged 22% in three months. But this company does have a growing presence in areas like solid-state drives, where it competes with the likes of Micron (MU). Meanwhile, its network processing segment, which is much improved, has helped Marvell emerge as a formidable competitor to the likes of Cisco (CSCO). As such, the company on Tuesday must deliver a top- and bottom-line beat and impressive guidance for these fundamental improvements to reverse the decline in the stock.
Lululemon (LULU) – Reports after the close, Wednesday, Dec. 5
Wall Street expects the company to earn 69 cents per share on revenue of $735.93 million. This compares to the year-ago quarter when earnings came to 56 cents per share on revenue of $619.02 million.
What to Watch: Where other retailers have failed, yoga powerhouse Lululemon — currently on a streak of seven straight earnings beats — has managed to thrive. And it’s not out of the question to expect another beat-and-raise quarter on Wednesday. Thanks to a strong Q2 report, during which revenues grew 25% and total comparable sales were up 20%, Lululemon has seen its stock surge 70% year to date, including rising 10% just in the past five days. Despite the popularity in the shares (currently at $132), Lululemon’s momentum is such that the stock could end the year at all-time highs, trading north of $165.
DocuSign (DOCU) – Reports after the close, Thursday, Dec. 6
Wall Street expects the company to lose 2 cents per share on revenue of $173.55 million. This compares to the previous quarter when earnings were 3 cents per share on revenue of $167.05 million.
What to Watch: Investors who have waited from a good entry point in DocuSign shares have gotten their chance as the stock has plunged some 33% over the past three months. The decline has come as DocuSign — which provides individuals and businesses the ability to digitize an agreement process — has shown decelerated revenue growth in its previous two quarters. Q2 revenue rose 33%, or four percentage points slower than the 37% year-over-year revenue growth posted in Q1. One of the most successful IPOs of the year, DocuSign on Thursday show not only a re-acceleration of the top line, but also outline its path towards profitability.
Broadcom (AVGO) – Reports after the close, Thursday, Dec. 6
Wall Street expects the company to earn $5.55 per share on revenue of $5.4 billion. This compares to the year-ago quarter when earnings came came to $4.59 per share on revenue of $5.67 billion.
What to Watch: Unlike the rest of the chip sector, Broadcom shares have show a revival over the past three months, rising more than 8%, while Philadelphia Semiconductor Index lower by about 11% during that same span. The company in July announced plans to acquire CA Technologies (CA) for $18.9 billion in cash. While the rationale for this deal remains a tough sell, the company has put itself in a win-win situation. On the one had, if the deal gets blocked, Broadcom will likely use the cash for buybacks, dividends and paying down debt. If it gets approved, the company — which has a strong track record of M&A integration — will be given time to extract value from synergies.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.
Go to Appearance > Customize > Subscribe Pop-up to set this up.
Wealth Empire Newsletter
Register now for free updates and alerts
Note: I have the ability to revoke this permission at any time and ask for the removal of my personal data collected by contacting us or simply clicking Unsubscribe.