Wall Street Week Ahead Earnings: Goldman Sachs, Procter & Gamble, United Airlines, and Netflix in focus

The following is a list of earnings slated for release January 17-21, along with a few previews. A number of big companies will report earnings in the week ahead, including Goldman Sachs and Bank of America, Procter & Gamble, Netflix, and a number of transportation companies. Investors will carefully monitor the latest news on the rapidly spreading Omicron coronavirus variant to see how it affects earnings in 2022.

Earnings Calendar For The Week Of January 17

Monday (January 17)

No major earnings are scheduled for release. The stock market in the U.S. will be closed in observance of Martin Luther King, Jr. Day.

Tuesday (January 18)

IN THE SPOTLIGHT: GOLDMAN SACHS

The New York-based leading global investment bank Goldman Sachs is expected to report its fourth-quarter earnings of $11.89 per share, which represents a year-over-year decline of about 2% from $12.08 per share seen in the same period a year ago.

The world’s leading investment manager would see a decline in revenue of nearly 1% to $11.65 billion from a year ago. It is worth noting that in the last two years, Goldman Sachs has surpassed market consensus expectations for profit and revenue most of the time.

“We expect Goldman Sachs to report mixed results, with revenues outperforming the consensus estimates and earnings missing the expected figure. The investment bank reported better than expected results in the last quarter, with the top-line increasing 26% y-o-y. This was driven by significant growth in the investment banking business, followed by higher global markets and consumer & wealth management revenues,” noted analysts at TREFIS.

“While investment banking grew on the back of growth in mergers &acquisitions (M&A) and equity underwriting deal volumes, global markets benefited from higher equity trading revenues. Similarly, the consumer & wealth management segment gained from an increase in outstanding loan balances. That said, the top-line was partially offset by negative growth in the asset management division, primarily due to lower equity investment revenues. We expect the same trend to continue in the fourth quarter. We estimate Goldman Sachs’ valuation to be around $447 per share which is 14% above the current market price.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 18

TICKER COMPANY EPS FORECAST
BAC Bank of America $0.78
SCHW Charles Schwab $0.83
CNXC Concentrix $2.54
HWC Hancock Whitney $1.33
IBKR Interactive Brokers $0.74
JBHT J.B. Hunt Transport Services $2.0
MBWM Mercantile Bank $0.85
ONB Old National Bancorp $0.38
PNFP Pinnacle Financial Partners $1.56
PNC PNC Financial Services $3.62
PRGS Progress Software $0.62
SBNY Signature Bank $3.92
TFC Truist Financial $1.27
UCBI United Community Banks $0.63

 

Wednesday (January 19)

IN THE SPOTLIGHT: PROCTER & GAMBLE, UNITED AIRLINES

PROCTER & GAMBLE: The world’s largest maker of consumer-packaged goods, is expected to report its fiscal second-quarter earnings of $1.66 per share, which represents year-on-year growth of just over 1% from $1.64 per share seen in the same period a year ago.

The Cincinnati, Ohio-based consumer goods corporation would post revenue growth of over 3% to $20.4 billion from a year ago. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

“We believe strategy changes can sustain Procter & Gamble (PG) LT topline growth in the 4% range. In the US, a strong breadth of performance and share gains give us confidence that market share momentum is sustainable and supports LT topline growth above HPC peers. While near-term pressures from commodity/freight inflation will impact margins, we believe PG has stronger pricing power than peers, particularly with share gains,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

PG trades at ~22.5x CY22e EPS, an HSD% discount to HPC peers CLX, CL and CHD, and looks compelling given our call for higher LT PG growth.”

UNITED AIRLINES: The major U.S. airline company is expected to report a loss for the eight-consecutive time of $-2.12 in the holiday quarter as the aviation service provider continues to be negatively impacted by the ongoing COVID-19 pandemic and travel restrictions.

However, that would represent a year-over-year improvement of about 70% from -$7.0 per share seen in the same period a year ago. The Chicago, Illinois-based airlines would post revenue growth of over 130% to $7.94 billion.

“Despite some headwinds around staffing issues, we expect United Airlines (UAL) to guide to a continued sequential improvement with capacity guided to be down in the 17-18% range in Q1, which incorporates domestic capacity down in the 1% range, while international capacity remains down 27%,” noted Sheila Kahyaoglu, equity analyst at Jefferies.

“Remaining in a Net Loss Position into Q1. We expect a continued sequential decline in CASM-ex to 11.63¢, which reflect a 9% increase vs. 2019 levels, which compares to the 13% increase we expect in Q4. Nonetheless, UAL will remain in a net loss position in Q1, before turning positive in Q2.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 19

TICKER COMPANY EPS FORECAST
AA Alcoa $2.5
ASML ASML Holding $4.3
CFG Citizens Financial Group $1.16
CMA Comerica $1.6
DFS Discover Financial Services $3.48
FAST Fastenal $0.36
FUL H.B. Fuller $1.06
KMI Kinder Morgan $0.27
MS Morgan Stanley $1.83
PACW PacWest Bancorp $1.06
PG Procter & Gamble $1.66
STT State Street $1.93
USB U.S. Bancorp $1.13
UAL United Airlines $-2.12
WTFC Wintrust Financial $1.56

 

Thursday (January 20)

IN THE SPOTLIGHT: NETFLIX

The California-based global internet entertainment service company NetFlix is expected to report its fourth-quarter earnings of $0.82 per share, which represents a year-over-year decline of over 30% from $1.19 per share seen in the same period a year ago.

However, the streaming video pioneer would post revenue growth of over 16% to $7.71 billion. It is worth noting that the company has beaten earnings per share (EPS) estimates just thrice in the last two years.

“We believe share performance is highly dependent on increasing global membership scale. Proven success in the US and initial international markets provides a roadmap to success in emerging markets, and scale should allow Netflix (NFLX) to leverage content investments and drive margins,” noted Benjamin Swinburne, equity analyst at Morgan Stanley.

“Higher global broadband penetration should increase the Netflix (NFLX) addressable market, driving member growth and providing further opportunity given NFLX’s global presence. Longer-term, we see the ability to drive ARPU growth, particularly given increased original programming traction.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 20

TICKER COMPANY EPS FORECAST
AAL American Airlines $-1.72
CSX CSX $0.42
FITB Fifth Third $0.91
ISRG Intuitive Surgical $1.01
KEY KeyCorp $0.56
MTB M&T Bank $3.24
NTRS Northern Trust $1.82
OZK Bank OZK $0.98
PPBI Pacific Premier Bancorp $0.85
PPG PPG Industries $1.2
RF Regions Financial $0.49
SASR Sandy Spring Bancorp $1.1
SIVB SVB Financial $6.29
TRV Travelers $3.77
UNP Union Pacific $2.66
WBS Webster Financial $1.11

 

Friday (January 21)

TICKER COMPANY EPS FORECAST
ALLY Ally Financial $2.0
FHB First Hawaiian $0.47
HBAN Huntington Bancshares $0.37
INFO IHS Markit $0.71
SLB Schlumberger $0.39

 

Best ETFs For October 2021

Checking in on Big Money activity however, we see a tale of two markets.

Going to MAPsignals.com we can scan Big Money ETF Buys and Sells. We see ETF buying and selling activity is partly driving volatility. You’ll notice in 2020, there were clear patterns. Big selling (red bars) led markets lower followed by huge buying (blue bars) lifting markets. But this year is a washing-machine:

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Source: www.mapsignals.com

Long-term investors should look for ETFs (and their stocks), with great setups for the months ahead.

Remember: ETFs are just baskets of stocks so we need to look at them. MAPsignals specializes in scoring more than 6,000 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all strongest to weakest.

Let’s get to the 5 best ETF opportunities for October.

#1 SPDR S&P Regional Banking ETF (KRE)

Financials are hot. We see Big Money has been buying KRE earlier this year. We saw fresh buy signals recently too as possible interest rate hikes could benefit lenders:

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KRE holds solid stocks; one example is First Bancorp (FBP). Here are Big Money signals for FBP:

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#2 iShares Russell 1000 Growth ETF (IWF)

I’m looking for growth with a twist: Recently punished large-cap growth stocks should bounce at some point. IWF displayed lots of green signals this year. And when we see red selling on great ETFs (and their stocks) it can be a great opportunity.

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One great stock that IWF holds is Intuitive Surgical, Inc. (ISRG). It’s a long-time outlier with awesome fundamentals, recently announcing a 3-for-1 split. The multi-year chart below shows when red appears on great stocks, it’s usually an opportunity:

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#3 Invesco QQQ Trust (QQQ)

We all know QQQ – the NASDAQ 100 Index tracker. It’s like the Dow Jones of the 1920s. After some solid green, it’s pulled back substantially and should eventually bounce.

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One big winner inside of QQQ is Microsoft Corporation (MSFT). It’s an outlier stock:

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#4 Materials Select Sector SPDR Fund (XLB)

The first three ETFs were from the strong part of my ranked list. Now we look for bargains by identifying weaker ETFs holding stocks with strong fundamentals. The Materials sector faced pressure recently. Many companies face supply-chain headwinds. These are temporary. Long-term investors should see opportunity in temporary dislocations.

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It holds great stocks. One such winner is Sherwin-Williams Company (SHW). Big Money loves it. The multi-year chart says don’t bet against it:

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#5 iShares NASDAQ Biotechnology ETF (IBB)

Biotech pulled back substantially. News of Merck’s pill reducing hospitalizations and deaths by 50% hit the sector. I think it will recover nicely. The pullback offers a nice entry for a long-term investment:

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Great stocks in IBB are seeing reaction selling to the Merck news. One is Moderna, Inc. (MRNA). Vaccines will still get manufactured and sold. I believe stocks like these will recover and thrive:

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Here’s a Bog Money recap:

  • When Big Money buying pours in, stocks tend to go up
  • Red selling on great quality can be a great opportunity
  • Repeated buying usually means outsized gains

Let’s summarize here:

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KRE, IWF, and QQQ rank high. XLB and IBB however, rank lower on our list, due to weaker technicals. That’s why I think these weaker ETFs represent great potential bargains.

The Bottom Line

KRE, IWF, QQQ, XLB and IBB are my top ETFs for October 2021. Market volatility is hitting all stocks. They will eventually recover and thrive.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in KRE, FBP, ISRG, QQQ, MSFT, XLB, SHW, IBB or MRNA but holds long positions in IWF in managed accounts at the time of publication.

Investment Research Disclaimer

Best Stocks to Buy Now September 2021

The hard part is finding them.

At MAPsignals, that’s where we focus.

And this month we look at my best stocks to buy now for September 2021. Keep in mind, I like to use a lot of data in my process and this isn’t personalized advice.

But let’s touch on the market first. The big indexes are chugging higher but are largely being propped up by a handful of the biggest stocks. The data under the surface is deteriorating quickly. The Big Money Index is falling rapidly indicating more sellers than buyers. It’s often a leading indicator, so recent weakness isn’t surprising.

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Pullbacks are part of the game. In fact, that’s an opportunity for long-term investors. Patience is the key to investing.

For MAPsignals, we focus on Big Money buying the best stocks. We find that oftentimes how a stock trades can alert you to the forward fundamental picture more than just looking at a company’s financials. I like the odds in my favor when looking for the highest quality stocks.

Up first is Thermo Fisher Scientific Inc. (TMO), which is a leading medical devices company. They have been trucking higher for years.

When we decide on the strongest candidate for long-term growth, we consider many fundamental and technical considerations.

Here we see great 1 and 3-year sales and earnings growth. We also see a hefty profit margin. Just for fun, juice is good, so-so is ok, and not ideal is underwhelming:

Source: MAPsignals, FactSet

To see if Big Money is plowing in, we can look at the MAPsignals Top 20 charts. Below are all the top buy signals TMO has made the past few years. Blue bars are showing that Thermo Fischer was likely being bought by a Big Money player according to MAPsignals.

When we see a lot of blue signals, we call it the stairway to heaven:

Source: MAPsignals.com

Next up is Intuitive Surgical, Inc. (ISRG), which is a leading surgical robotics maker. Imagine being a surgeon in one country operating in a patient in another! This company makes it theoretically possible.

Let’s take a peek under the hood:

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Source: MAPsignals, FactSet

While the stock has outperformed recently, look at the long-term picture. These are the top buy signals ISRG has made since 2015. Clearly the Big Money has been into it for years:

Source: MAPsignals.com

Another growth name to consider is Activision Blizzard, Inc. (ATVI). The video game maker has seen negative press regarding work culture and other assorted stories. But it doesn’t change the monster business they do.

Looking at the fundamental picture we see a strong history of 1 and 3-year sales and earnings growth and a chunky profit margin:

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Source: MAPsignals, FactSet

Below are the big money signals Activision has made since 2015. This stock has been a magnet for Big Money with one notable rough patch. Clearly, they turned it around and have been in a strong long-term uptrend:

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Source: MAPsignals.com

Number 4 on the list is Generac Holdings Inc. (GNRC), which is an industrials leader making electrical products such as their popular home generators. The shares have been in juice-mode for years.

Check out the fundamental picture. For GNRC we see growing sales and earnings:

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Source: MAPsignals, FactSet

Below are the big money signals that GNRC has made since 2015. Notice that it’s only recently come to Big Money attention in late 2019:

Source: MAPsignals.com

Our last growth powerhouse is PayPal Holdings Inc (PYPL), which is a specialty finance company focusing on digital payments.

This company boasts strong fundamentals with great 1 and 3-year sales and earnings growth. A gross profit margin of 55% is awesome.

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Source: MAPsignals, FactSet

Below are the big money signals PayPal has made since 2016. You can see how powerful the performance has been:

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Source: MAPsignals.com

The Bottom Line

TMO, ISRG, ATVI, GNRC, & PYPL represent my best stocks to buy now for September 2021. Given the strong historical revenue & earnings growth, and multiple big money buy signals, these stocks could be worth extra attention, especially if they pull back with a likely pending sell-off in the market.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in PYPL in personal and managed accounts. He holds no positions in TMO, ISRG, GNRC, or ATVI at the time of publication.

Investment Research Disclaimer