Hewlett Packard Enterprise Tops Earnings Forecasts, Ups Full-Year Guidance

Hewlett Packard Enterprise Company (HPE) traded mostly unchanged in Tuesday’s extended-hours session despite the enterprise-computing hardware company surpassing Wall Street expectations and raising its full-year forecast.

The company posted a fiscal Q1 profit of 52 cents per share while analysts had expected earnings of 40 cents a share. Moreover, the bottom line grew 18% from a year earlier. Sales of $6.83 billion also came in ahead of Street forecasts but were down from revenues of $6.95 billion reported in the same quarter last year.

Looking ahead, management now expects FY 2021 earnings to range between $1.77 and $1.80 a share, up from its previous forecasts of $1.60 to $1.78. CEO Antonio Neri told Barron’s that the company saw a recovery in enterprise IT spending throughout the quarter, adding that he anticipates demand gradually resuming this year.

As of March 3, 2021, Hewlett Packard has a market value of $18.86 billion, issues a healthy 3.29% dividend yield, and trades 22.36% higher year to date (YTD). Over the past 12 months, the shares have gained 12.5%. Valuation wise, the stock trades at nearly nine times projected earnings, slightly below its five-year average multiple of 9.65 times.

Wall Street View

In January, JPMorgan analyst Paul Coster upgraded HP Enterprise to ‘Overweight’ and lifted his price target to $16 from $13. Coster told investors the stock was a good “contrarian long trade,” given the company’s move into the SD-WAN space, its ongoing cost-cutting initiatives, and the expected recovery in enterprise IT spending.

Most other analysts have a wait-and-see view on the stock. It receives 13 ‘Hold’ ratings, 5 ‘Buy’ ratings, and 1 ‘Sell’ rating. Twelve-month price targets range from a Street-high $18 to a low of $10. The median target sits at $14 – 3.4% below Tuesday’s closing price of $14.50.

Technical Outlook and Trading Tactics

Since bottoming out around $8 a share in late October, the share price has trended sharply higher. More recently, traders have booked profits ahead of the company’s quarterly earnings. This provides a “buy the dip” opportunity for active traders.

Look for entry points at the $14 level, where the price finds support from a four-month uptrend line. In terms of trade management, consider placing a stop-loss order beneath the 50-day simple moving average (SMA). Think about booking profits on a retest of pre-pandemic high at $17.59.

For a look at today’s earnings schedule, check out our earnings calendar.

Foot Locker Runs Into Sellers as Sales Miss Forecasts

Shares in Foot Locker, Inc. (FL) plunged 8.8% Friday after the shoe seller posted mixed quarterly results wherein sales fell short of Wall Street expectations.

The mall-based retailer disclosed fourth quarter (Q4) revenues of $2.22 billion, with the figure missing analysts’ expectations by 0.71% and coming in below year-ago sales of $2.27 billion. Investors were also troubled by the company’s comparable store sales, which slumped 2.7% during the quarter versus expectations of a 4.9% increase. Foot Locker still has around 10% of its stores closed due to the pandemic.

In better news, the company’s bottom line grew 4.5% from a year earlier, helped by a 44% jump in online sales and improved margins. “Our digital business remained the catalyst through the quarter, delivering impressive double-digit growth overall with strengths across the board. In regions most heavily impacted by store closures, digital growth was up triple-digits. In fact, in Europe, COVID-related restrictions have been an accelerator for digital capability and growth,” CEO Dick Johnson told investors, per Yahoo! Finance.

Through Friday’s close, Foot Locker stock has a market capitalization of $5 billion, offers a 1.66% dividend yield, and trades up 18.92% on the year. Over the past 12 months, the shares have gained over 40%.

Wall Street View

Last month, Cowen analyst John Kernan upped the investment firm’s price target on the stock to $66 from $55 while keeping his ‘Outperform’ recommendation. Kernan believes expectations are too low and valuation appears too cheap given ongoing government stimulus measures designed to encourage consumer spending.

Brokerage coverage elsewhere also remains mostly bullish. The stock receives 14 ‘Buy’ ratings, 7 ‘Hold’ ratings, and just 1 ‘Sell’ rating. As of March 1, the stock trades at a 15% discount to Wall Street’s 12-month median price target of $55.50.

Technical Outlook and Trading Tactics

Foot Locker shares have remained in a steady uptrend since bottoming out at the height of the March 2020 pandemic sell-off. Furthermore, a cross of the 50-day simple moving average (SMA) above the 200-day SMA in late September – referred to as a “golden cross” – confirmed the bullish price action.

Active traders should view the current earnings-driven weakness as a buying opportunity. Look to enter near $46, where the price finds a confluence of support from a multi-year trendline and the 50-day SMA. Those who take a trade should consider placing a stop-loss order under the January swing low at $42.69 and targeting a move to crucial overhead resistance at $64.

For a look at today’s earnings schedule, check out our earnings calendar.

Booking Holdings Trades Flat After Earnings, Revenues Top Forecasts

Booking Holdings Inc. (BKNG) shares traded mostly unchanged in Wednesday’s extended-hours session after the travel booking company reported quarterly financial results that came in ahead of Wall Street expectations but revealed ongoing industry weakness as reimposed travel restrictions in many parts of the world continue to present challenges.

The $100 billion-dollar company behind popular travel sites, such as Priceline.com, Booking.com, Agoda, OpenTable, and Kayak, posted a Q4 loss of 57 cents per share, much narrower than the $5.08 earnings per share (EPS) loss analysts had forecast. However, the metric plunged significantly from earnings of $23.30 in the year-ago quarter. Likewise, revenues of $1.24 billion came in ahead of the consensus mark but declined from sales of $3.34 billion in the December 2019 quarter.

CEO Glenn Fogel told investors during the earnings call that lockdowns – particularly in the United Kingdom – had continued to weigh on the company, but things had started to turn around in the current quarter.

“The travel environment continued to be challenging through the fourth quarter of 2020 and into January 2021 as COVID-19 case counts remained very high and travel restrictions were reimposed in many parts of the world. However, in recent weeks, we have started to see some improvements in booking trends that we will continue to monitor,” Fogel said, per Bloomberg.

Despite the headwinds facing the travel giant, its stock has gained 18.40% over the past three months as of Feb. 25, 2021. Year to date (YTD), the share price has added nearly 10%.

Wall Street View

This week, Credit Suisse analyst Stephen Ju lifted the investment bank’s price target on the stock to $2,430 from $2,170 while reiterating his ‘Overweight’ rating. Ju sees long-term profit potential, given the company’s substantial exposure to leisure travel.

Other brokerage coverage also remains bullish, with many analysts looking for a recovery in travel demand as the year progresses. The stock receives 10 ‘Buy’ ratings, 19 ‘Hold’ ratings, and 1 ‘Underweight’ rating. Wednesday’s $2,443.50 close represents an 8.6% premium to Wall Street’s 12-month median price target of $2,250.

Technical Outlook and Trading Tactics

After a retracement in between the 50-day and 200-day simple moving averages (SMAs), the Booking Holdings share price surged to a new all-time high (ATH) this week on increasing volume as investors positioned for a better-than-expected earnings report.

After the recent gains and the RSI indicator pointing to overbought conditions, active traders should look to open long positions between $2,090 and $2,290, where the price finds a zone of support from an 18-month horizontal trendline and the early January swing high.

For a look at today’s earnings schedule, check out our earnings calendar.

Royal Caribbean Sails Toward 12-Month High as Earnings Top Forecasts

Royal Caribbean Group (RCL) rose to a near one-year high Monday, gaining 9.33% after the cruise line operator beat Wall Street’s bottom-line expectations.

The Miami-based leisure company reported a large fourth quarter (Q4) loss of $1.1 billion, or $5.02 per share, while analysts had anticipated a loss of $5.04 a share. However, the figure plunged from the $1.42 earnings per share (EPS) profit reported in the year-ago quarter amid ongoing cruise cancellations. Meanwhile, revenues for the period sank to $34.1 million, down from $2.5 billion in the December 2019 quarter.

Management reiterated during the earnings call that it expects the company’s monthly cash burn to remain in the $250- to $290 million range during the suspension of operations. In its latest update on Feb. 18, the company said via its website that it had extended the suspension of its global fleet through April 30, 2021, except for select voyages departing from Singapore and China.

CEO Richard Fain provided a glimmer of hope, telling CNBC’s Seema Mody that early bookings data for the current quarter – particularly for older customers – indicates a surprisingly positive post-Covid recovery. “Some of the things we thought were going to happen aren’t happening. They’re better than we thought,” he said.

Through Monday’s close, Royal Caribbean stock has a market capitalization of $20.47 billion and trades 15.45% higher since the start of the year. Over the past 12 months, the shares trade underwater by around 19%.

Wall Street View

Last month, Deutsche Bank analyst Chris Woronka bumped the investment firm’s price target on the stock to $62 from $46 while maintaining his ‘Hold’ rating. Woronka sees uncertainty remaining for the first half of 2021, with more sailings resuming in the second half of the year.

Elsewhere, most other broker coverage recommends sitting on the sidelines for now. The stock receives 7 ‘Hold’ ratings, 3 ‘Buy’ ratings, 2 ‘Underweight’ ratings, and 1 ‘Sell’ rating. Price targets range from a Street-high $100 to $48 low, with the median target pegged at $61. Look for re-ratings in the coming weeks as analysts get a better understanding of the cruise operator’s short- to mid-term outlook.

Technical Outlook and Trading Tactics

Royal Caribbean’s better-than-expected earnings helped its share price break above a multi-month horizontal trendline to reach its highest level in almost a year. The move occurred on above-average volume, increasing the probability of follow-through buying in subsequent trading sessions.

Those who buy the breakout should set a take-profit order at the pre-pandemic double top around $135, where the price may encounter overhead resistance. Protected against a reversal with a stop placed somewhere below the 50-day simple moving average (SMA).

For a look at today’s earnings schedule, check out our earnings calendar.

3 Silver Stocks with a Shiny Outlook

Silver often plays second fiddle to its glittering counterpart gold. However, the grey metal offers investors an attractive alternative in the year ahead, with the commodity well positioned to benefit from its store of value characteristics and improving industrial demand. “Investors are already starting to see that inflation is out there, and that’s why I like hard-assets so much,” said Crescat Capital partner Tavi Costa, per Kitco.com. “Gold looks really cheap. Silver looks really, really cheap,” he added.

Below, we take a closer look at three silver mining stocks and use technical analysis to identify important trading levels worth watching.

Pan American Silver Corp.

Vancouver-based Pan American Silver Corp. (PAAS) operates silver mines in Canada, Mexico, Peru, Argentina, and Bolivia. In its latest quarter, the silver mining giant posted earnings of 57 cents per share on revenues of $430.46 million. Both metrics came in ahead of Wall Street forecasts and grew 73% and 6.4% YoY, respectively. As of Feb. 18, 2021, Pan American Silver Corp. stock has a market capitalization of $6.73 billion, and trades nearly 8% lower on the year. Investors also receive a 0.86% dividend yield.

Chart-wise, the stock price trades within a seven-month range. Pullbacks to the pattern’s lower trendline provide high probability entry points.

Fortuna Silver Mines Inc.

With a market value exceeding $1.4 billion, Fortuna Silver Mines Inc. (FSM) is a Canadian-based precious metals producer with significant silver mining assets in Peru and Mexico. The company, which does not currently issue a dividend, grew its bottom line 350% in the third-quarter (Q3) from a year earlier, posting earnings per share (EPS) of 9 cents during the period. Through Wednesday’s close, Fortuna Silver Mines stock trades 7.77% lower year to date (YTD). However, it has gained over 100% in the past 12 months.

From a technical perspective, the price has formed a multi-month broadening wedge. Traders should look for retracement entries to the pattern’s lower trendline that finds a confluence of support from the 200-day SMA.

Endeavour Silver Corp.

Endeavour Silver Corp. (EXK) conducts silver mining operations through three high-grade, underground, silver-gold mines in Mexico. Analysts expect the Canadian-based silver miner to disclose a profit of 6 cents per share in the current quarter and 19 cents a share for full-year 2021. Moreover, brokerage coverage remains mostly favorable, with the shares receiving 4 ‘Buy’ ratings and 6 ‘Hold’ ratings. Endeavor Silver Corp. stock has a market cap of $921.21 million and trades 16% higher YTD.

From a charting standpoint, traders should watch for “buy the dip” opportunities near a long-term uptrend line that extends back to the March 2020 pandemic-induced low.

For a look at today’s earnings schedule, check out our earnings calendar.

Illumina Rockets After Topping Q4 Earnings

Illumina, Inc. (ILMN) shares surged nearly 12% Friday after the diagnostics company disclosed a better-than-expected quarterly report on the back of robust growth in its sequencing consumable business.

The healthcare giant reported a fourth-quarter (Q4) profit of $1.22 per share, surpassing analysts’ forecasts of $1.11 a share. However, the bottom line declined almost 30% from a year earlier. Meanwhile, revenues of $953 million during the period grew 20% sequentially and came in comfortably ahead of the $898 million consensus mark. Sales in the company’s sequencing consumable segment rose to $599 million, up 4.7% from the year-ago quarter, driven by a near-record number of NovaSeq orders and HiSeq conversions.

Looking ahead, Illumina expects full-year 2021 adjusted earnings per share (EPS) of $5.10 to $5.35 on revenues of between $3.79 billion and $3.89 billion. “Our business delivered strong sequential growth in the second half of 2020, and we expect continued recovery from the pandemic in 2021,” CEO Francis deSouza told investors during the conference call, per Business Wire.

As of Feb. 15, 2021, Illumina stock has a market capitalization of $73.7 billion and trades nearly 40% higher over the past month. Over the past year, the shares have gained 73%. From a valuation standpoint, the stock trades at 76 times forward earnings, 55% above its five-year average multiple of 49 times.

Wall Street View

Last week, Canaccord’s Max Masucci maintained the firm’s ‘Neutral’ rating on the stock while raising his price target to $410 from $350. The analyst believes the company’s acquisition of cancer screening startup Grail has the potential to dilute earnings in upcoming quarters but still provides investors with a long-term buying opportunity, especially if purchased during periods of share price weakness.

Elsewhere, the Street consensus remains split. The shares receive 5 ‘Buy’ ratings, 1 ‘Overweight’ rating, 8 ‘Hold’ ratings, 2 ‘Underweight’ ratings, and 3 ‘Sell’ recommendations. Through Friday’s close, the stock currently trades at an 18.6% premium to analysts’ 12-month median price target of $425.50.

Technical Outlook and Trading Tactics

Illumina shares have trended steadily higher since late November, accelerating to a new all-time high (ATH) on above-average volume Friday after the company’s upbeat earnings. Furthermore, last month’s golden cross of the 50-day simple moving average (SMA) above the 200-day SMA indicates the start of a new uptrend.

However, given the relative strength index (RSI) sits in extreme overbought territory, investors should consider waiting to enter on retracements to a multi-month trendline that finds a confluence of support from the rising 50-day SMA.

For a look at today’s earnings schedule, check out our earnings calendar.

Mastercard Joins Tesla, PayPal in Crypto Revolution

Payments giant Mastercard Incorporated (MA) announced Wednesday via a company blog that it plans to start supporting select cryptocurrencies directly on its network later this year. The decision comes three months after rival PayPal Holdings, Inc. (PYPL) said it would add select cryptocurrencies to its platform and several days after electric car maker Tesla, Inc. (TSLA) announced in an SEC filing that it has invested $1.5 billion into Bitcoin and plans to accept the pioneer crypto as payment.

Although Mastercard did not disclose which digital currencies it will support, a source familiar with the matter told CoinDesk that digital currency payments would settle in cryptocurrency at participating merchants. Mastercard already has existing partnerships with prominent crypto payment firms Wirex and BitPay but currently requires a conversion of digital currency payments back to fiat currencies on its network.

“Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases,” wrote Raj Dhamodharan, the company’s executive vice president of digital asset and blockchain products.

Through Wednesday’s close, Mastercard stock has a market capitalization of $332 billion, issues a modest 0.53% dividend yield, and trades 6.37% lower since the start of the year.

Wall Street View

Last month, Jefferies analyst Trevor Williams upgraded the stock to ‘Buy’ from ‘Hold’ and raised the firm’s price target to $415 from $315. Williams argues that the company’s cross-border payments division, which accounts for around 25% of total revenues, sits well-positioned to benefit from a recovery in travel after the vaccine rollout.

Mastercard also racks up positive coverage elsewhere on Wall Street. It receives 29 ‘Buy’ ratings, 4 ‘Overweight’ ratings, and 9 ‘Hold’ ratings. Currently, no analysts recommend selling the shares. Look for further brokerage research in the weeks ahead after the company’s latest pledge to brining digital currencies to its platform.

Technical Outlook and Trading Tactics

Mastercard shares have formed a short-term inverse head and shoulders over the past two months, with the pattern’s head finding a confluence of support from the 200-day simple moving average (SMA) and a horizontal trendline. Furthermore, the relative strength index (RSI) sits just above 50, giving the price ample room to test higher prices before consolidating.

Those who buy here should consider setting a take-profit order near the stock’s all-time high (ATH) at $367.25 while managing risk with a stop placed beneath the pattern’s right shoulder at $330.

For a look at today’s earnings schedule, check out our earnings calendar.

Take-Two Interactive Dives Despite Crushing Earnings Estimates

Take-Two Interactive Software, Inc. (TTWO) shares plunged 5.25% in extended-hours trade Monday despite the video games publisher delivering an upbeat quarterly report and surprising Wall Street with its full-year forecast.

The company behind “Grand Theft Auto,” “Red Dead Redemption,” and “NBA 2K” posted a fiscal Q3 adjusted profit of $1.25 per share, smashing expectations of 95 cents a share. Although revenues of $860.9 million declined from $930.1 million in the year-ago quarter, the metric came in ahead of the $757.5 million figure analysts had expected. For the year ahead, management expects earnings of between $4.08 and $4.18 a share on sales of $3.24 billion to $3.29 billion, comfortably ahead of Wall Street forecasts of $3.69 a share on revenue of $3.29 billion.

Video game stocks have been big winners during the pandemic as cooped up consumers look for ways to stay entertained while at home. Consequently, Take-Two has surpassed bottom-line forecasts in the past four consecutive quarters, prompting investors to expect impressive earnings beats.

A sell-off in after-hours trade appears to be an example of “buy the rumor, sell the news,” given that the stock has gained 26% since it last reported earnings back on Nov. 5. By comparison, the S&P 500 has added 11.5% over the same period. Moreover, the stock looks to be overvalued from a historical perspective. It currently trades at 36 times projected earnings, 17% above its five-year average earnings multiple of 30.78 times.

Wall Street View

Last month, UBS analyst Eric Sheridan downgraded Take-Two to ‘Neutral’ from ‘Buy’ while maintaining the investment bank’s $200 price target. Sheridan said he sees a “more balanced risk/reward” after a 37% run-up in the stock price over the past six months. Longer-term, the analyst believes the video game publisher sits well-positioned to capitalize on growth within the video game industry.

Elsewhere, the stock continues to rack up ‘Hold’ recommendations after its recent gains. Three months ago, four analysts issued a ‘Hold’ rating, compared to nine analysts currently suggesting holding the shares. Tuesday’s after-hours quote of $202.15 represents a 4% discount to Wall Street’s 12-month median price target of $210.

Technical Outlook and Trading Tactics

After consolidating for the past six weeks, the stock broke out to a new all-time high (ATH) on above-average volume Monday as investors anticipated better-than-expected earnings. However, as the price reached a new high, the relative strength index (RS) made a relatively shallower high to form a bearish divergence, indicating waning buy-side momentum and a possible bull trap.

Active traders who take a short position if the price reverses today should look to cover at $180, where the stock finds support from a previous line of resistance. Protect capital with a stop placed either above today’s or yesterday’s high.

For a look at today’s earnings schedule, check out our earnings calendar.

Amazon Trades Flat After Blowout Quarterly Earnings as Investors Digest Bezos Departure

Shares in Amazon.com, Inc. (AMZN) were little changed during Tuesday’s extended-hours trading session, despite the Seattle-based e-commerce giant reporting better-than-expected quarterly results. During the earnings call, the company’s founder and CEO Jeff Bezos surprised investors by announcing that he will step down later this year.

The tech titan posted record sales of $125.56 billion in the 2020 holiday quarter, significantly above the $119.7 billion Wall Street had expected. Importantly, it marked the first time the company has generated over $100 billion in revenue in a three-month period. Meanwhile, earnings came in at $14.09 per share, almost double analysts’ forecast of $7.23 a share. The figure also grew 118% from a year earlier.

Management credited the outstanding quarter to record-breaking holiday season e-commerce demand that saw the company deliver over one billion products. It also said a pandemic-delayed Prime Day helped fuel quarterly sales. Looking ahead, the company projects Q1 revenue of between $100 billion and $106 billion, with operating income of between $3 billion and $5.5 billion.

Through Tuesday close, Amazon stock has a $1.7 trillion market cap and trades 68% higher over the past twelve months. Since the start of the year, the shares have gained nearly 4%.

Bezos Departs

In a move few investors saw coming, Bezos announced that Web Services CEO Andy Jassy would replace him in the top job this fall, adding that he will become executive chairman. Bezos, the world’s second-richest person, said he plans to focus on “new products and early initiatives” in his new role, as well as devoting more time to his philanthropic funds and other business interests.

Wall Street View

Last month, JPMorgan analyst Doug Anmuth bumped the firm’s price target on Amazon stock to $4,155 from $4,100 while maintaining an ‘Overweight’ recommendation. Anmuth sees the company’s “strong” e-commerce and public cloud trends continuing in the quarters ahead.

Sentiment remains just as upbeat elsewhere. The stock receives 41 ‘Buy’ ratings, 4 ‘Overweight’ ratings, and 3 ‘Hold’ ratings. Currently, no brokerage firm recommends selling the shares. As of Feb. 3, 2021, Amazon stock trades 12% below the median 12-month Wall Street consensus price target of $3,800.

Technical Outlook and Trading Tactics

Amazon shares staged a pre-earning breakout above a multi-month symmetrical triangle on heavy volume Tuesday as traders bet on a bullish quarterly report. Providing the price holds above the triangle pattern’s top trendline, look for further upside continuation in today’s session.

Those who take a trade should consider using the measured move technique to set a profit target. To do this, measure the initial high to low of the pattern in dollars, and add that amount to the breakout point. For example, add $747 (pattern’s distance) to $3,320 (breakout point) for a profit target of $4,067.

For a look at today’s earnings schedule, check out our earnings calendar.

3 Gold Stocks Ready to Glitter

After a record runup in gold prices during the first half of 2020, demand for the precious metal has eased in recent months amid a shift to risk-on plays and institutional investors diversifying into other inflationary-hedge assets, such as Bitcoin.

However, with central banks pumping enormous amounts of stimulus into the financial system, many analysts think the yellow metal will regain its luster as the greenback decreases in value.

“With record global debt and MMT in place, there is more certainty that it is about time that gold will reprice itself to account for dollar debasement. When faith in the modern monetary system is shaken, there is a tendency to shift towards hard assets, probably justifying why central banks across the globe have been net buyers of gold bullions since the Global Financial Crisis,” Edelweiss chief market strategist Sahil Kapoor told investors, per Kitco.

Let’s take a closer look at three large-cap gold mining stocks that closely track the commodity’s price. We’ll also use technical analysis to identify important trading levels.

Newmont Corporation

With a market capitalization nearing $50 billion, Newmont Corporation (NEM) is the world’s largest gold producer, with an annual consolidated output of around 6.39 million ounces. The gold miner, which has extensive operations in the Americas, Australia, and Africa, offers a 2.68% dividend yield and trades 32.53% higher over the past year but has eased 5% since early November.

From a charting perspective, look for entry points near support at $58.30 while targeting moves to overhead resistance at $68.50.

Barrick Gold Corporation

Toronto-based Barrick Gold Corporation (GOLD) has major mining operations in North America, South America, Australia, and Africa, with its assets significantly boosted in 2018 after its acquisition of Randgold. Last year, the company said it was on track to reach its annual gold production target of between 4.6 and 6 million ounces. The $39.56 billion Canadian-based gold miner yields 1.61% and has gained 21.31% over the past 12 months. Year to date (YTD), the shares have edged 1.8% lower.

Chart wise, look to buy the stock at current levels if support holds at the crucial $22.50 area. Consider booking profits on a move to technical resistance at $28.45.

Kinross Gold Corporation

Yielding 1.72%, Kinross Gold Corporation (KGC) explores for and produces gold in Canada, the United States, Russia, Brazil, Chile, Ghana, and Mauritania. The mining giant, which generates annual gold equivalent production of around 2.5 million ounces, received an upgrade from Barclays last month based on the company’s valuation relative to more diversified mining firms. Though Monday’s close, the gold miner currently trades at around eight times forward earnings, placing it at a significant discount to its historical earnings multiple of 37 times. Although the company’s stock has slipped nearly 5% YTD, it has jumped 40% over the last year.

From a technical standpoint, look for entries near key support at $7 while booking profits on retests of horizontal resistance at $9.30.

For a look at today’s earnings schedule, check out our earnings calendar.

Starbucks Q1 Earnings Remain Lukewarm as Covid Weighs on Sales

Shares in Seattle-based coffee chain Starbucks Corporation (SBUX) remain relatively unchanged in extended-hours trading Tuesday after the company reported a mixed quarterly report.

The beverages giant posted a fiscal first quarter (Q1) profit of 61 cents per share, topping analysts’ consensus of 55 cents a share. Meanwhile, revenues for the period tallied $6.75 billion, falling shy of the $6.93 billion figure Wall Street had expected. The company saw a 5% slump in global same-store sales, although comparable store sales in China jumped 5% as the world’s second-largest economy continued to claw back from the health crisis. On a year-over-year (YoY) basis, the firm saw its top- and bottom-line shrink 5% and 23%, respectively.

Despite the company recording 19% fewer transactions during the quarter, the average ticket spend jumped 17%. Additionally, active customers in the past three months grew by 15%, while mobile orders remained comfortably above pre-pandemic levels.

As of Jan. 27, 2021, Starbucks stock has a market capitalization of $123.25 billion, offers a 1.74% dividend yield, and trades 2% lower since the start of the year. However, in the past three months, the shares have gained around 16%. From a valuation standpoint, the stock trades at 36 times 2021 projected earnings, above its average five-year multiple of 27 times.

Wall Street View

This month, Goldman Sachs initiated coverage of the stock with a ‘Buy’ rating and set a $115 price target – indicating a 9.8% premium from Tuesday’s close of $104.69. The bank’s analyst Jared Garber says the coffee chain sits well-positioned to benefit from the economic re-opening in 2021 as consumers revert to urban centers for work and study. The Starbucks verdict is out among other research analysts. The stock receives 14 ‘Buy’ ratings, 2 ‘Overweight’ ratings, and 18 ‘Hold’ recommendations. Traders shouldn’t expect a significant change in brokerage coverage until the outlook becomes clearer later this year.

Technical Outlook and Trading Tactics

Starbucks’ shares climbed above their previous all-time in early December but have traded mostly sideways since. Providing price continues to hold above the July 2019 high, look for the stock to grind higher as investors factor in demand picking up after the vaccine rollout. Active traders who buy here should protect capital with a stop-loss order placed somewhere below the psychological $100 support level. Consider using the measured move technique to set a profit target. To do this, measure the most recent leg higher in dollars and add that amount to the breakout level. For example, add $22.60 to $100 for a profit target of $122.60.

For a look at today’s earnings schedule, check out our earnings calendar.

Schlumberger Shares Gain as Earnings Top Estimates

Shares in Schlumberger Limited (SLB) bucked broader weakness in the energy sector Friday, gaining nearly 1% after the oilfield services provider delivered a better-than-expected fourth-quarter report.

The Houston-based company reported quarterly earnings of 22 cents per share, comfortably above the 17 cent figure analysts had expected. Meanwhile, revenues of $5.5 billion topped estimates by $300 million. Notably, sequential sales rose across all four of the company’s business divisions during the period, indicating recovering economic activity. On a year-over-year (YoY) basis, top-and bottom-line growth declined 33% and 44%, respectively. Management credited increasing contributions from digital solutions and growing multiclient seismic license sales for the encouraging results.

Cash flow also improved during the quarter, coming in at $554 million despite shelling out $144 million in severance payments. Moreover, the company sees the trend continuing this year. “We are confident in our ability to further improve cash flow generation in 2021, which will allow for debt reduction,” CEO Olivier Le Peuch told investors during the earnings call, per the company’s website.

Through Friday’s close, Schlumberger shares have a market capitalization nearing $34 billion, offer a 2.05% dividend yield, and trade 33% lower over the past 12 months. However, since the start of the year, the stock has gained almost 12%. From a valuation standpoint, the shares have a forward-earnings multiple of 25.7 times, 25% below their five-year average multiple of 34.5 times.

Wall Street View

Citigroup analyst Scott Gruber remains bullish on the stock. “Schlumberger remains our top pick in oilfield services given their leverage to recovery abroad, margin expansion prospects, and free cash flow generative business model,” he wrote in a client note cited by Barron’s.

Other sell-side firms overwhelmingly share Gruber’s view. The stock receives 21 ‘Buy’ ratings, 2 ‘Overweight’ ratings, and 8 ‘Hold’ ratings. Just one analyst currently recommends selling the shares. Twelve-month price targets range widely from a Street-high $37 to a low of $17, with the median sitting at $27.

Technical Outlook and Trading Tactics

Schlumberger shares initially sold off after releasing results but staged an impressive intraday turnaround to complete a piercing line bullish reversal pattern. As added confluence, the bounce occurred at the $24 level, where price finds crucial support from the June and December swing highs. Furthermore, the 50-day simple moving average (SMA) crossed back above the 200-day SMA in early December to form a “golden cross” – a technical signal often marking the start of a new uptrend.

Active traders who enter here should consider placing a stop-loss order slightly beneath Friday’s low at $23.45 and target a move up to longer-term resistance at $31.

For a look at today’s earnings schedule, check out our earnings calendar.

Netflix Rockets After New Subscribers Fuel Blockbuster Q4 Sales

Netflix, Inc. (NFLX) shares surged over 12% in extended-hours trade Tuesday after the streaming content provider reported better than expected fourth-quarter sales on the back of robust subscriber growth. The company also said it is considering returning free cash flow to shareholders through buybacks.

Revenues for the fourth quarter (Q4) came in at $6.64 billion, slightly above the $6.63 billion consensus mark analysts had forecast. Moreover, the top line grew 20% from a year earlier, thanks to a boost of 8.5 million paid subscribers during the period. The company disclosed quarterly earnings per share (EPS) of $1.19, with the figure falling shy of Wall Street estimates of $1.30 a share and contracting 8% on a year-over-year (YoY) basis.

As of Jan. 20, 2021, Netflix stock has a market value of $221.68 billion and trades 7.21% lower on the year. However, the shares have gained nearly 50% over the past 12 months as investors piled into names that benefited from consumers spending more time at home during the pandemic.

Returning Free Cash Flow to Investors

CFO Spencer Neumann raised the prospect of returning excess free cash flow to investors while remaining on the lookout for strategic investments. “We put a premium on balance sheet flexibility, so we’re going to continue to invest aggressively into the growth opportunities that we see, and that’s always going to come first,” he said, per CNBC. “But beyond that, if we have excess cash, we’ll return it to shareholders through a share buyback program,” Neumann added. He also told investors that the company would no longer need to raise external financing for its daily operations.

Wall Street View

Citi’s Jason Bazinet maintained his ‘Neutral’ rating on Netflix shares earlier this month but raised his price target to $580 from $450. The analyst cautioned price hikes might limit new subscribers in coming quarters, resulting in a loss of market share to Disney’s streaming service, Disney+.

Elsewhere, the Street sentiment remains mostly bullish. The shares receive 21 ‘Buy’ ratings, 4 ‘Overweight’ ratings, and 12 ‘Hold’ ratings. Just one sell-side firm currently recommends selling the shares. Price targets range from as high as $700 to as low as $235, with the median pegged at $580.60. Watch for a flurry of additional upgrades over the next few weeks after yesterday’s upbeat quarterly update.

Technical Outlook and Trading Tactics

Since climbing to a new all-time high in mid-July, Netflix shares have remained stuck in a 110-point trading range. Premarket data indicates the stock will open around $565 today, placing the price toward the range’s upper trendline.

Those looking to play a breakout should plan entries above key resistance at $575 while managing risk with a stop-loss order placed around $20 below the execution price. Consider using a measured move to set a profit target. For example, add the trading range distance, as measured in points, to the breakout level. ($105 + $575 = $680 profit target)

For a look at today’s earnings schedule, check out our earnings calendar.

Tesla Stuck in Neutral after Delivering First China-made Model Y Crossover

Shares in electric vehicle (EV) pioneer Tesla, Inc. (TSLA) failed to gain traction Monday, despite the company tweeting that it has commenced deliveries of its first Shanghai-produced Model Y Crossovers in China.

The development marks an important milestone for the Californian-based carmaker that wants to ramp up its vehicle sales in the world’s largest auto market from around 500,000 in 2020 to 20 million by the end of the decade.

The Model Y rolls off the production line just 12 months after Tesla made its first delivery of the hugely popular Chinese-made Model 3 – a vehicle that claimed the mantle of China’s bestselling EV in 2020, with sales of almost 140,000 sedans. Manufacturing cars locally boost the company’s profit margins by reducing delivery costs. “The cost of vehicles produced in Shanghai in Q1 is already lower than the cost to produce the Model 3 in Fremont,” CFO Zachary Kirkhorn told investors last year, per Barron’s.

Through Monday’s close, Tesla stock has a market value nearing $800 billion and trades up a massive 704% YTD. Since the start of the year, the shares have climbed an impressive 17%.

Wall Street View

Earlier this month, Wedbush analyst Daniel Ives raised his target on the stock to $950 while maintaining his ‘Neutral’ rating. Ives believes that China will make up 40% of Tesla’s global deliveries by 2022. He sees EVs accounting for 5% of global auto sales by the end of 2021 and 10% by 2025.

Understandably, most other sell-side analysts sit on the fence, given Tesla’s surging share price over the past 12 months. The stock receives 8 ‘Buy’ ratings, 13 ‘Hold’ ratings, and 12 ‘Sell’ recommendations. All eyes will be on the company’s financial results next week, where Wall Street expects the EV carmaker to report a full-year profit for the first time.

Technical Outlook and Trading Tactics

Since plunging to the 200-day simple moving average (SMA) during the pandemic-induced sell-off, Tesla shares have trended sharply higher. More recently, price appears to be losing momentum, with the relative strength index (RSI) dropping below the overbought threshold.

Therefore, active traders should focus on buying retracements to the $660 level, where the stock finds support from a multi-month uptrend line and the 50-day SMA. Given there’s limited overhead resistance, consider targeting a move to the psychological $1,000 mark. Protect against a sudden reversal by placing a stop-loss order somewhere below the trendline.

For a look at today’s earnings schedule, check out our earnings calendar.

3 Utilities Stocks Ready to Power Ahead

Utility stocks, known for their stable cash flow and high-paying dividends, have been out of favor over the past year as investors prioritized leading consumer cyclical and technology names that benefited from people spending more time at home during the pandemic.

However, the group may see renewed buying interest this year as the lure of predictable earnings and above-average yields in an unpredictable environment may draw in those looking for lower-risk investment options.

Below, we review three utilities stocks that appear ready to move higher in the months ahead.

Consolidated Edison, Inc.

With a market capitalization of $23.31 billion, Consolidated Edison, Inc. (ED) provides steam, natural gas, and electricity to customers on the U.S. East Coast. The utility also has a renewable energy segment generating gas and electric transmission. Edison has grown its dividend by an average of 3.5% each year for 45 consecutive years. The stock currently issues a 4.51% yield and has slipped 3.68% year to date (YTD).

Charts wise, the stock temporarily broke below crucial support at $69.50 but closed above that level Wednesday, increasing the possibility of a possible head-fake trade. Traders should look for a test of key resistance at $83.

Duke Energy Corporation

Duke Energy Corporation (DUK) provides regulated utility services to more than 7 million customers in the midwestern and southern USA. The 15-year-old energy giant, which trades flat on the year, operates through three divisions: gas utilities and infrastructure; and commercial renewables. Duke has increased its dividend for the past 14 consecutive years by an average of around 3%, currently offering investors a yield of 4.34%.

From a technical standpoint, the company’s share price has traded within a falling wedge pattern since early November but broke above the pattern’s top trendline in Wednesday’s session. Further upside momentum could see price test significant resistance levels at $99 and $104.

WEC Energy Group, Inc.

Milwaukee-based WEC Energy Group, Inc. (WEC) distributes gas and electricity to customers in Illinois, Michigan, Minnesota, and Wisconsin. Barclays analyst Eric Beaumont upgraded the company’s stock to ‘Equal-Weight’ from ‘Underweight’ this week, saying it has an above-average growth trajectory, similar to comparable industry peers. Beaumont maintained his 12-month price target on the shares at $107, indicating a 22% premium to Wednesday’s $87.86 close. The company pays a 3.18% dividend yield and trades 4.53% lower since the start of the year.

The stock rallied yesterday from the lower trendline of a two-month falling wedge pattern that finds support from the May and June swing lows around $84.50. A move higher from this area could see bulls test major resistance at  $105.50.

For a look at today’s earnings schedule, check out our earnings calendar.

Eli Lilly Jumps After Alzheimer’s Drug Shows Positive Results

Eli Lilly and Company (LLY) shares rocketed 11.74% Monday after the Indianapolis-based drug manufacturer said its experimental Alzheimer’s drug significantly slowed the rate of decline in patients.

The treatment, called donanemab, showed effectiveness at slowing the decline of patients’ ability to think by 32% relative to a placebo in a mid-stage clinical study of 272 people conducted over two years. The drug works by removing a form of plaque known as beta-amyloid in an Alzheimer’s patient’s brain.

“This unique mechanism and antibody for clearing plaques, discovered at Lilly, has the potential to provide high levels of durable amyloid plaque clearance after limited dosing,” the company’s Chief Scientific Officer Daniel Skovronsky wrote in a statement, per Investor’s Business Daily. The company said it will undertake further studies in a 500-patient trial to gain additional insight into the drug’s effectiveness.

Through Monday’s close, Eli Lilly stock has a market capitalization of $177.87 billion and trades 10% higher on the year. Over the past month, the shares have gained 16.18%. From a valuation standpoint, the stock trades at around 20 times forward earnings, roughly in-line with its five-year earnings multiple.

Wall Street View

Cantor Fitzgerald’s Louise Chen said that the successful study was great news for the drugmaker. She added that the results pave the way for an application for regulatory approval. Elsewhere, sell-side research firms remain mostly bullish on the stock. It receives 11 ‘Buy’ ratings and 7 ‘Hold’ ratings. At this time, no analyst recommends selling the shares.

Price targets range from a Street-high $209 to a low of $149. The median 12-month price target of $190 represents a modest 2% premium to yesterday’s $185.94 close. Watch for additional re-ratings in the months ahead as further details emerge about the drug’s effectiveness and commercial application.

Technical Outlook and Trading Tactics

After breaking above an inverse head and shoulders pattern in December, the price formed a flag over the holiday season. However, yesterday’s news-driven breakout propelled the stock through key overhead resistance to a new all-time high (ATH) on heavy volume. Moreover, the 50-day simple moving average (SMA) recently crossed above the 200-day SMA to indicate a new uptrend is in place.

Given the relative strength index (RSI) sits in overbought territory, active traders should consider waiting for a retracement entry to the $170 level, where previous resistance now provides support. Those who take a long position in this area should protect capital with a stop-loss order placed beneath the flag pattern at $161.78. Book profits by using a target that is at least twice the amount of the stop used. For instance, target a $20 move if using a $10 stop.

For a look at today’s earnings schedule, check out our earnings calendar.

Goldman Sachs Surges After Surprise Fed Decision

Shares in Goldman Sachs Group, Inc. (GS) gained over 6% Monday, leading banking stocks higher after the Federal Reserve gave bank buybacks the greenlight from as early as next month after major players in the group passed a range of specifically designed coronavirus stress tests. The surprise decision reverses the central bank’s halt on buybacks that has been in place since June to ensure lenders had sufficient balance sheet strength to survive the pandemic ravaged economy.

Under the Fed’s new rule, banks’ total capital distribution, which includes buybacks and dividends, will be limited to 100% of average quarterly net income over the four most recent quarters. After the announcement, Goldman said it plans to recommence its share repurchase program in the first quarter of 2021. This year, the New York-based investment bank has bought back $1.93 billion of its shares, compared to buying back $5.34 billion in 2019.

Through Monday’s close, Goldman Sachs stock has a market capitalization of $88.42 billion, offers a 2.1% dividend yield, and trades 15.06% higher over the last month. Year to date (YTD), the shares have added around 12%. From a valuation standpoint, the stock trades at just over 10 times projected earnings, roughly in-line with its five-year average multiple.

Wall Street View

Morgan Stanley analyst Betsy Graseck believes Goldman has the most to gain from the Fed’s buyback reversal decision due to the substantial revenue it has generated from trading in the trailing four quarters.

Even before yesterday’s announcement, other sell-side firms on the Street were mostly bullish about the bank’s prospects. It receives 16 ‘Buy’ ratings, 9 ‘Hold’ ratings, and just 1 ‘Sell’ recommendation. Price targets range from as high as $407 to as low as $200. Monday’s $256.98 close sits 6.5% below Wall Street’s 12-month median price target of $273.75.

Technical Outlook and Trading Tactics

Goldman shares broke out to a multiyear high on above-average volume Monday, which may lead to further momentum-based buying in subsequent trading sessions. Furthermore, the bullish move received confirmation from a cross of the moving average convergence divergence (MACD) indicator back above its signal line.

Active traders could play the breakout by using a trailing bar stop to let profits run. To do this, remain in the position until the price closes beneath the current day’s low or the previous day’s low, whichever is lower. For example, place an initial stop-loss order under Friday’s low at $240.56.

For a look at today’s earnings schedule, check out our earnings calendar.

Roku Streams Higher After HBO Agreement

Roku, Inc. (ROKU) shares gained 4.37% in extended-hours trade Wednesday after the $41.36 billion digital media company announced it had reached an agreement with WarnerMedia to stream HBO Max content across its devices.

While Roku and WarnerMedia – a subsidiary of communications giant AT&T Inc. (T) – did not disclose specific details of the arrangement, both sides said that they were pleased to hash out a deal that had been on the table since May. The company hopes that the distribution of premium content on its platform will bolster its 46 million-strong active subscriber base and capture market share from Netflix, Walt Disney’s Disney+, and Comcast’s Peacock.

“We believe that all entertainment will be streamed, and we are thrilled to partner with HBO Max to bring their incredible library of iconic entertainment brands and blockbuster slate of direct to streaming theatrical releases to the Roku households with more than 100 million people that have made Roku the No. 1 TV streaming platform in America,” the company’s platform business manager Scott Rosenberg said, per Business Wire.

As of Dec. 17, 2020, Roku stock has surged 143.33% year to date (YTD), gaining around 40% in the past month alone. Like many streaming stocks, the company continues to benefit from people spending more time at home during the pandemic watching the latest blockbuster movies and hit television shows.

Wall Street View

Earlier this month, Citi’s Jason Bazinet bumped the investment bank’s price target on the stock to $375 from $220 while maintaining his ‘Buy’ recommendation. The analyst sees distribution agreements, such as the HBO Max deal, and expansion into international markets as a catalyst for further growth. Moreover, Bazinet places an enterprise value per active Roku account at $619, based on platform margins. Most other brokerages on the Street also have a bullish outlook on the stock. It receives 16 ‘Buy’ ratings, 9 ‘Hold’ rating, 1 ‘Underweight’ rating, and 1 ‘Sell’ rating.

Although several sell-side analysts had factored in an HBO Max carriage agreement, the stock may attract additional upgrades in the coming weeks due to the deal’s timing ahead of highly anticipated content like “Wonder Woman 1984,” which debuts on HBO Max and theaters Christmas Day.

Technical Outlook and Trading Tactics

After bouncing from support at $196 in early November, Roku shares have trended sharply higher. Although the stock is susceptible to a short-term correction, active traders should focus on playing upside momentum, remembering the old Wall Street adage – “the trend is your friend.” To deploy this strategy, consider using a fast period moving average, such as the 15-day SMA, as a trailing stop to let profits run. Simply exit the trade when the price closes below the indicator.

For a look at today’s earnings schedule, check out our earnings calendar.

3 Semiconductor Stocks Testing Their All-Time High

Semiconductor stocks have outpaced the S&P 500 by around 25% so far this year as investors bet on insatiable demand, driven by 5G smartphones, artificial intelligence (AI) devices, and a rebound in auto and industrial end markets. Evercore ISI analyst C.J. Muse recently told clients he sees the group growing for the next six to eight quarters, with revenues jumping 14% in 2021 to $500 billion.

Below, we take a look at three leading chip stocks trading near their all-time high (ATH) and point out crucial technical levels worth watching.

Advanced Micro Devices, Inc.

Advanced Micro Devices, Inc. (AMD) designs and manufactures microprocessors for the computer and consumer electronics industries. The Santa Clara company entered its foray into supercomputing in May 2019, announcing that its chips would power Frontier – an exascale system designed to innovate in areas such as AI, machine learning, and data analytics. Analysts expect the chipmaker to post 40% sales growth for fiscal 2021, followed by another 26% in fiscal 2022.

Chart watchers should look for a breakout above a five-month trading range that has established clear resistance around the ATH at $96.37. Look for the bullish momentum to continue on a move through this level.

Analog Devices, Inc.

Massachusetts-based Analog Devices, Inc. (ADI) produces analog, mixed-signal, and digital signal processing chips. The company, which generates about 70% of sales from industrial and automotive end markets, forecasts first-quarter fiscal EPS to come in at $1.30 on revenues of $1.5 billion. This indicates respective top- and bottom-line line growth of 15% and 26% from a year earlier.

Chart wise, the shares broke out from an inverse head and shoulders pattern in early November, suggesting further upside. More recently, the price has remained above the 20-day SMA after reaching its ATH at $146.31 on Dec. 8.

Xilinx, Inc.

Xilinx, Inc. (XLNX) processes and designs integrated circuits for use in communications, data processing, industrial, consumer, and automotive industries. The computer chipmaker has made inroads into the data center market by designing programmable processors that speed up compressing videos and providing digital encryption. In October, Advanced Micro Devices announced that it has agreed to purchase Xilinx in a $35 billion all-stock deal.

After climbing to a new ATH at $151.54 earlier this month, the shares retraced to the April 2019 high, where previous resistance now acts as support. A push higher from this level in recent trading sessions indicates further momentum-based buying.

For a look at today’s earnings schedule, check out our earnings calendar.

Starbucks Perks Up on Positive 2021 Outlook

Starbucks Corporation (SBUX) shares gained 3.69% in extended-hours trade Wednesday after the Seattle-based coffee retailer said it sees more favorable conditions returning in 2021.

The company told investors at its biennial investor day that it anticipates a significant rebound next year, along with a continued recovery from the impacts of the coronavirus pandemic. “The recent disruption of the global pandemic has accelerated certain shifts in consumer behavior, and Starbucks has quickly adapted its business for the short- and long-term implications,” management said, per MarketWatch.

CFO Pat Grismer reiterated the company’s fiscal 2021outlook, forecasting an earnings guidance range of between $2.70 and $2.90 per share. Wall Street expects earning per share (EPS) of $2.81. Looking further ahead, the coffee chain expects outsized earnings growth of 20% for fiscal 2022, followed by low double-digit bottom-line growth in both 2023 and 2024 – up from its previous forecast of 10% for the two latter years. The company also updated investors about its long-term growth strategy, such as rolling out artificial intelligence (AI) in its drive-thrus, offering a new range of cold beverages, and tweaking new store formats.

Through Wednesday’s close, Starbucks stock offers a 1.78% dividend yield and trades 16.11% higher on the year. Over the past month, the shares have added 5.18%, outperforming the industry average by around 3%. From a valuation standpoint, the stock trades 32% above its five-year forward earnings multiple of 27 times.

Wall Street View

This month, Oppenheimer’s Brian Bittner raised the investment firm’s price target on the stock to $112 from $101. The analyst believes that margin upside and positive earnings revisions can accompany a full post-pandemic sales recovery.

Sentiment also remains mostly optimistic elsewhere on the Street. The stock receives 14 ‘Buy’ ratings, 1 ‘Overweight’ rating, and 18 ‘Hold’ ratings. No sell-side analysts recommend selling the shares at this time. Price targets range from a high of $113 to a low of $85. The shares currently trade roughly in-line with Wall Street’s 12-month median target of $99.50. Look for further upgrades in the coming weeks as analysts factor in the company’s upbeat guidance.

Technical Outlook and Trading Tactics

Starbuck shares have continued trending high after the 50-day SMA crossed back above the 200-day SMA to generate a “golden cross” buy signal in mid-September. More recently, the stock has consolidated above the July 2019 high, indicating the bullish price action is likely to continue.

Those who wish to play the upside momentum should consider using a trailing stop to bank profits. To do this, traders could remain in their long position until the price closes below a shorter period moving average. For example, exiting on the first close below the 15-day SMA. This allows profits to run until stopped out by the market.

For a look at today’s earnings schedule, check out our earnings calendar.