The earnings season is quickly coming to a close, but there are still plenty of big-name stocks left to report.
It has been a good earnings season thus far, and the positive results have helped the broader market erase its losses from the December correction. There is optimism over the earnings season as well as renewed optimism over trade negotiations between the U.S. and China. Both have brought strength back into the market.
However, there remains a lot of uncertainty in the market. Rising interest rates remain a concern, as does slowing corporate earnings growth. While the market is optimistic over U.S./China trade negotiations any signs that talks are not progressing would quickly push the entire market lower.
Given all the uncertainty, this earnings season carries a lot of weight. Results have been generally positive, and these stocks will look to continue that trend with their quarterly reports this week.
Avis Budget (CAR)
Avis Budget Group (CAR) will report is Q4 numbers after the market close Wednesday. The company is expected to report earnings of $0.31 per share on revenue of $2.06 billion. Both numbers are down from the same period last year when it earned $0.45 on revenue of $2 billion. CAR has been weak over the last year and remains in the lower end of its 52-week range. The stock’s valuation is very low with a forward P/E of just 7.5, so the downside is somewhat limited, but shares are vulnerable to another selloff if results disappoint as they did last quarter. Looking ahead analysts expect annual earnings growth of 15% for the next five years, and with the low valuation and so much negativity already priced into the stock there is a lot of upside as long as the company is able to hit its estimates moving forward. CAR is trading at $28.69 and analysts have a $40.80 price target on the stock.
Baidu (BIDU) reports fourth-quarter results Thursday. The Chinese internet company will report after the market close and analysts expect to see earnings of $1.79 per share and revenue $3.88 billion During the same period last year the company earned $2.29 per share and had sales of $3.62 billion. There is a lot of concern on Wall Street over China’s economic slowdown, and those fears have been reflected in BIDU’s weak performance over the last year. BIDU is trading in the very low end of its 52-week range, and the company will need a blowout quarter to bring enthusiasm back into the stock. BIDU is likely to remain under pressure until China and U.S. reach a trade deal which would help all Chinese stocks in the market. The market is looking for a solid quarter with a whisper number of $1.85, and given the stock recent weakness we could see a nice bounce if results do wind up topping estimates. BIDU trades at $170.06 with an average price target of $216.64 on the stock.
Fast food chain Wendy’s (WEN) will report its quarterly numbers before the market opens Thursday. WEN shares have rallied to start the year, and the stock is currently trading just shy of its 52-week high. Analysts expect Wendy’s to post earnings of 15 cents per share and show revenue of $400 million. Last year the company earned 11 cents on sales of $309.2 million. WEN trades at less than 8 times earnings so there remains value in the stock as it nears its 52-week high. Last quarter Wendy’s posted mixed results with earnings topping estimates and revenues disappointing, and the market is looking for another bottom-line beat this quarter with a whisper number of 16 cents for the quarter. WEN trades at $18.00 with an average price target of $19.43.
CVS Health (CVS)
Drug store chain CVS Health (CVS) reports fourth-quarter numbers this week. The company will report before the market open Wednesday with the consensus calling for earnings of $2.07 and revenue of $53.71 billion. During the same period last year the company earned $1.92 on sales of $48.4 billion. The stock sold off in December with the overall market and has yet to make a meaningful recovery as the overall market firmed in 2019. CVS has a very low forward P/E of just 9.3, so there is value in the stock with analysts expecting per annum earnings growth of 12.3% for the next five years. CVS has posted positive surprises on both the top and bottom line the last two quarters, and the company has an 11-quarter streak of earnings beats. The street expects another earnings beat with a whisper number of $2.11, which should breathe some life into the stock. CVS trades at $69.53 with an average price target of $89.05.
Garmin (GRMN) has been a standout stock over the last year, and shares are currently just pennies below their 52-week high. The navigation device company will report Q4 numbers before the market open Wednesday with the consensus calling for earnings of $0.79 on revenue of $889.72 million. During the same period last year the company had earnings of $0.79 on revenue of $888 million, so neither number is expected to show much year over year change. Garmin does have a track record of posting big earnings beats and the is looking for another beat this quarter with a whisper number of $0.83. Revenues have also been much higher than the street expected 12 quarters, and the numbers have helped drive the stock higher. GRMN has been in a strong upward trend since the start of 2016, the stock is currently trading at $71.62 and analysts have an average price target of $68.75. If the company is able to deliver another strong set of numbers analysts will likely adjust their targets higher to reflect the beat.