Weekly Market Preview: Four Stocks To Watch For the Coming Week (JD, CPB, TGT, LOW)
The thought of a near-term resolution to the trade war between the U.S. and China sparked a mini rally as equities closed mostly higher Friday, lead by a 123-point rise in the Dow Jones Industrial Average which closed at 25,413.22.
After some encouraging words from President Trump, who told reporters it would be unnecessary to impose new tariffs on Chinese imports or raise existing ones, investors looked for value in a market that — at one point last week — had seen its 2018 gains wiped out. The president said he doesn’t want to “put China in a bad position.” The S&P 500 also rose after Trump’s comments, adding 6.07 points, or 0.2%, to close at 2,736.27, while the Nasdaq Composite Index bounced off intraday lows to close at 7,247.87.
It remains to be seen if the positive trend and optimism will continue in the coming week as the Thanksgiving holiday approaches, during which a flurry of retail chains will announce their financial results. While there’s still some prevailing uncertainty regarding the direction of interest rates, there are still reasons to love this market.
Of the 90% or some S&P 500 companies that have reported so far, year-over-year earnings per share growth has averaged some 27%, while revenues growth has been 12%, according to Goldman Sachs equity strategy chief David Kostin. More earnings results are on tap this week. Here are four stocks to keep an eye on.
JD.com (JD) – Reports before the open, Monday, Nov. 19
Wall Street expects JD to earn 11 cents per share on revenue of $15.24 billion. This compares to the year-ago quarter when earnings came to 22 cents per share on revenue of $12.07 billion.
What to Watch: While the Chinese e-commerce giant has made a name for itself by selling electronics, appliances and other consumer items, which accounts for some 50% of its revenues, the company wants to emerge as a leader in the realm of technology and logistics — something reminiscent of Amazon (AMZN). Add in the growth of JD Mall, combined with its investments in real estate — aimed at building out its logistics capabilities — there are still several growth catalysts to be excited about.
Campbell Soup (CPB) – Reports before the open, Tuesday, Nov. 20
Wall Street expects Campbell Soup to earn 71 cents per share on revenue of $2.64 billion. This compares to the year-ago quarter when earnings came to 92 cents per share on revenue of $2.16 billion.
What to Watch: With Campbell stock own 20% year to date, profits for the packaged food giant has become a major concern for investors. And it doesn’t appear as if things will get better. Since the start of the just ended quarter, Campbell’s first-quarter 2019 earnings estimates have declined from 83 cents to 71 cents, while full-year estimates have fallen by 30 cents from $2.73 to $2.43. These revisions suggest respective year-over-year declines of 23% and 15%. The downbeat forecast highlights the struggles the company is expected to face in an industry struggling to adjust to the changing eating habits of consumers. Will Campbell’s margins rebound on Tuesday?
Target (TGT) – Reports before the open, Tuesday, Nov. 20
Wall Street expects Target to earn $1.12 per share on revenue of $17.8 billion. This compares to the year-ago quarter when earnings came to 91 cents per share on revenue of $16.67 billion.
What to Watch: Big box retail is not dead, as evidenced by the strong earnings results and forecasts just delivered from Walmart (WMT). Aside from the impressive bottom line beat, Walmart raised its full-year same-store sales forecast in the U.S., affirming the level of confidence it has as it enters the all-important holiday shopping season. Can Target keep up the pace? The company has seen its share price rise 22% this year, crushing the S&P 500’s 2% climb. Target’s strong performance has been driven by its e-commerce investments, including its last year’s acquisition of grocery delivery startup Shipt. Will Tuesday’s results affirm investors’ confidence in the stock price?
Lowe’s (LOW) – Reports before the open, Tuesday, Nov. 20
Wall Street expects Lowe’s to earn 98 cents per share on revenue of $17.34 billion. This compares to the year-ago quarter when earnings came to $1.05 per share on revenue of $16.77 billion.
What to Watch: With better-than-expected earnings results from rival Home Depot (HD) and other retailers such as Walmart, there’s optimism about what Lowe’s will reveal Tuesday. There were concerns that the housing market was on the decline. Despite looming evidence of a softening housing climate, investors will look to see if Lowe’s can keep up with Home Depot’s pace, particularly in an economic environment that’s still producing strong job and wage growth. For Lowe’s, the company’s merchandising initiatives and the management’s efforts to enhance its online capabilities will be closely watched on Tuesday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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