The markets are selling off sharply to kick off the week as fears over the spreading coronavirus have spooked investors and pulled the major indexes down over 3% on Monday.
The selloff comes on the heels of news of an unexpected spike in confirmed infections in both South Korea and Italy. The rise in confirmed cases indicates that coronavirus could turn into a full-blown pandemic which could have a material impact on economies around the globe.
It remains unclear how big the contagion is, or how big it will ultimately become, and the unknown is spooking investors and driving the major indexes lower.
While there is definitely a real threat from the virus, there is also a good chance that the virus will come under control and the market will start to quickly recover from the current sell-off.
The real question is whether or not to buy into the current dip, or if this dip is a precursor for another big sell-off. If you want to keep your money at work, you want to pay special attention to the current earnings season and keep your money at work in companies that are reporting strong quarterly numbers as they will have the best chance of a big rebound if and when the overall market starts to recover.
Here are a few big-name stocks set to report their quarterly numbers this week.
TJX Companies (TJX)
Off-priced retailer TJX Companies (TJX) will report its fourth-quarter numbers on Wednesday. The company is expected to report its quarterly numbers before the market opens, with the consensus calling for earnings of $0.77 per share. During the same period, last year TJX earned $0.68. Last quarter TJX posted better than expected numbers for both the top and bottom line, and this quarter the street expects another positive earnings surprise with a whisper number of $0.79. Discount retail has been strong in the bull market, and TJX stock has traded steadily higher over the recent year. The stock is currently trading at 21 times future earnings which are forecast to rise at an annual rate of 8.6% over the next five years. TJX is at $ 61.54 with an average price target of $64.76.
Best Buy (BBY)
Electronics retailer Best Buy (BBY) is scheduled to report its Q4 numbers on Thursday. Best Buy will release its quarterly numbers before the market opens with the consensus calling for earnings of $2.76 per share, up from $2.72 during the same period last year. The retailer has a strong earnings track record with better than expected profits in the last seven quarters. The street expects another earnings beat this quarter with a whisper number of $2.83. Best Buy has done a great job growing profits at an annual rate of 24% per annum over the last five years, and looking ahead analysts expect profits to rise at an annual rate of 8% over the next five years. The stock is trading at 15 times earnings at $85.91 and analysts have an average price target of $87.82.
Beyond Meat (BYND)
Beyond Meat (BYND) is expected to report fourth-quarter numbers Thursday. The company is scheduled to release its quarterly numbers after the market close with the consensus calling for a break-even quarter. Beyond Meat has only reported three times since going public in 2019 and has posted better than expected earnings two out of three quarters while sales have outpaced estimates all three quarters. This quarter the street expects to see another positive earnings surprise with a whisper number of two cents for the quarter. BYND shares have traded sideways over the last six months and are currently priced at $112.44 with an average price target of $111.45. Beyond Meat has struggled to remain profitable, and the company will need to start consistently showing quarterly profits for Wall Street to push shares higher. BYND is trading at a very high multiple with shares at 271 times future earnings which put a lot of pressure on each quarterly report. Wall Street is willing to buy into the stock at the current price as earnings are forecast to rise 347% next year, but shares are currently priced for perfection and any sign of weakness in the quarterly report will result in a big drop in the stock's price.
