The Earnings Season Begins
The first quarter earnings season is set to begin this week. No major companies will report their earnings but there are several interesting reports that may help traders and investors evaluate the potential results of the bigger players.
Levi Strauss will provide its earnings report on April 7 after the market close. The fashion industry is hit hard by the current coronavirus crisis as consumers lose jobs and sit at home, so it is very interesting to see how the beginning of virus containment measures impacted the financial results of the company.
PriceSmart will provide its earnings report on April 8 after the market close. PriceSmart operates membership shopping warhouse clubs in Central America, Colombia and the Carribean, so its results are not necessarily indicative of what the U.S. retailers would report. However, the shopping fever boosted by virus containment measures was seen all over the world, so investors in Costco should certainly take notice of PriceSmart’s results.
Airlines Continue To Struggle
Airlines have been hit hard during the current crisis as air travel almost stopped completely in many parts of the world. While airline stocks have lost a lot of ground, they could still have more room to fall in case the situation continues to deteriorate.
Delta Airlines, which expects a 90% decline in second-quarter revenues, still has a $14.5 billion market capitalization after losing 60% of stock value since the beginning of the year.
Southwest Airlines is down roughly 45% year-to-date and has a $16.3 billion market capitalization. Clearly, the current valuation implies that things will get better for the airline industry in a reasonable timeframe.
The stocks of other companies like United Airlines or Spirit Airlines got an even bigger hit since they are more leveraged. These stocks will be very volatile in the upcoming weeks since they need a timely resolution of the current crisis.
Boeing In Spotlight After Major Moves
March was very eventful for Boeing shares after the stock dropped from $280 to below $100 and then rebounded to $180, only to fall again in early April.
The company’s previous problems with MAX aircraft were intensified by the current problems of airlines whose planes do not fly, and who will not need additional planes from Boeing in the near-to-medium turn.
The stock is set to have plenty of volatility this week as investors and traders will try to guess when Boeing’s clients, airlines, will have the resources to take Boeing’s production.