Here’s your weekly Investing Action Plan: what you need to know as an investor for the coming week.
XAutoplay: On | OffNvidia (NVDA) leads another rush of highly rated chip companies reporting results, while top Chinese companies like Sina (SINA) and Weibo (WB) will follow Alibaba‘s (BABA) strong numbers, and Disney (DIS) will weigh in as fresh concerns of subscriber losses roil the media sector again. Department stores will report ahead of what could be their most challenging holiday season since the Great Recession.
Stocks To Watch
With a bullish quarterly report from consumer tech giant Apple (AAPL), your stocks to watch this week are five iPhone plays: Broadcom (AVGO), Skyworks Solutions (SWKS), Texas Instruments (TXN), Applied Materials (AMAT) and Qorvo (QRVO).
After a wild session Thursday, Broadcom is trading back above a 259.46 buy point initially cleared on Oct. 30. Friday’s 4% gain, amid reports that it wants to buy Qualcomm (QCOM), puts shares at a new all-time high, with the stock still trading within the 5% buy range.
Skyworks cleared a cup buy point of 110.71 on Oct. 30, and is looking to hold within the buy range. Skyworks, which issues its quarterly results Monday, seems to be hitting some resistance around the 114 price level.
Chip and display-equipment company Applied Materials broke out of a cup-with-handle base with a 47.69 buy point in September, and is now extended some 18% from that level. When a stock becomes 20% extended from a buy point, that’s usually a good time to take at least partial profits. Meanwhile, Texas Instruments is extended 15% from a cup-with-handle buy point of 84.34. The stock has been on a steady climb since clearing that level in heavy volume on Sept. 15.
Qorvo tried to clear a 76.57 buy point from a sloppy cup-with-handle base this past week, but was unable to hold above that level. Now, on the heels of earnings, Qorvo is testing support at the key 50-day moving average.
Nvidia Seen Taking A Breather
After three quarters of triple-digit growth in earnings per share, Nvidia is seen posting more modest returns in its Q3. The graphics-chip maker is scheduled to report after the market close on Thursday. Analysts expect the Santa Clara, Calif.-based company to earn 94 cents a share, up 13%, on sales of $2.36 billion, up 18%, in the quarter ended Oct. 29. RBC Capital Markets recently raised its price target on Nvidia to 230 from 220, citing data center growth, sustained positive gaming trends, and another lift from cryptocurrencies. Nvidia’s chips are used to process Bitcoin transactions. Shares are near profit-taking sell territory after breaking out in September.
Microchip, Skyworks Earnings On Tap
More chipmakers are scheduled to report quarterly results in the week ahead. Skyworks Solutions, ON Semiconductor (ON) and Microchip Technology (MCHP) report late Monday. Analysts expect Skyworks to earn $1.75 a share, up 19%, on sales of $980.3 million, up 17%. ON Semi is seen earning 40 cents a share, up 67%, on sales of $1.37 billion, up 44%. Microchip is expected to earn $1.35 a share, up 44%, on sales of $1 billion, up 15%. TowerJazz (TSEM) is set to post results late Tuesday and is expected to earn 52 cents a share, up 16%, on sales of $355.2 million, up 9%. Microsemi (MSCC) reports late Thursday and is seen earning $1.08 a share, up 19%, on sales of $475 million, up 6%.
Roku Set For First Earnings Release Post-IPO
Streaming video platform Roku (ROKU) is scheduled to report Q3 results after the market close on Wednesday. It will be the company’s first quarterly report as a publicly traded company. Analysts are modeling for Roku to lose $1.40 a share on sales of $110.5 million. Roku makes hardware and software for streaming internet video services such as Hulu and Netflix (NFLX).
Chinese Stock Leaders
Sina, a leading internet portal provider, reports early Tuesday, and the consensus estimates are for EPS of 73 cents, up 30%, on revenue of $410 million, up 49%. Sina, whose stock has nearly doubled this year owns a controlling stake in Weibo, which reports early Tuesday. The consensus on Weibo, known as the Twitter (TWTR) of China, is for EPS of 46 cents, up 92%, on revenue of $300 million, up 69%. Weibo shares have more than doubled this year.
Also coming early Tuesday is Autohome (ATHM), an online provider of auto information. The consensus is for EPS of 56 cents, up 47%, on revenue of $226.8 million, up 3%. Shares have more than doubled this year
Can Disney Pull Away?
The media and entertainment conglomerate reports late Thursday, and analysts project a 2% fiscal Q4 EPS gain to $1.12 on a 0.1% revenue uptick to $13.15 billion. CEO Bob Iger had already warned on earnings, citing Hurricane Irma, higher costs for NBA rights and the investment in BAMTech. Meanwhile, Disney is also reportedly cutting about 300 jobs at Disney/ABC Television, and ESPN figures remain a near-constant worry. Analysts will also look for updates on the company’s streaming plans. The report will follow Discovery Communications‘ (DISCA) latest subscriber losses and CBS‘ (CBS) weak quarterly ad sales. Fellow media giant 21st Century Fox (FOXA) reports Wednesday, and EPS is seen dropping 4% to 49 cents on 6% sales growth to $6.87 billion. While media stocks have sold off hard lately, Disney has held up better.
Mobile Payment Hotshot
Square (SQ) reports Q3 results late Wednesday, and analysts expect EPS of 5 cents, swinging from a year-ago loss of 9 cents a share, with revenue rising 30% to $574 million. Best known for processing credit card payments for small businesses, Square has created a stickier business by offering payroll and lending services to customers that already rely on it to process payments. Shares have nearly tripled this year and are in profit-taking sell territory after breaking out in September.
Buy Love, Sell High
Match Group (MTCH) reports Q3 earnings late Tuesday, and the provider of online dating services is expected to report EPS of 22 cents, down a penny from a year earlier, with revenue rising 4.3% to $330 million. While mobile app Tinder is a big growth driver, older dating websites are being revamped. Match has named a new CEO as of Jan. 1. Shares have shot up into profit-taking sell territory after breaking out in late August.
Parent IAC/Interactive (IAC) reports Q3 earnings Wednesday after the market close. EPS is expected to grow 15% to 84 cents, with revenue rising 6% to $810.2 million. IAC also consolidates the results of Angi Homeservices (ANGI).
Monster In Buy Zone Ahead Of Q3
Monster Beverage (MNST) is expected to report a 21% jump in EPS to 40 cents and a 14.3% increase in revenue to $901 million when it reports Q3 results Wednesday. The energy drink maker has a global distribution partnership with Coca-Cola (KO) so international sales have become a bigger focus. Soft drink sales have declined over the last decade while energy drink demand continues to grow, leading some analysts to speculate that Coke, which has a 16.7% equity stake in Monster, could buy the rest of the company. Monster shares are in buy range ahead of earnings after breaking out of a flat base with a 57.35 entry point on Oct. 31.
Top-Rated Drug Stock’s 2nd Chance
Supernus Pharmaceuticals (SUPN) is expected late Monday to report EPS of 27 cents, down 77%, on sales of $78 million, up 37%. On its call, management is likely to shine more light on recent Phase 3 trials of a drug to treat impulsive aggression in children with attention deficit hyperactivity disorder. Shares broke out of a flat base in August but tanked a month later. Supernus is forming a base now with a 50.14 entry.
Another Loss Ahead For Snap
Snapchat-owner Snap (SNAP) will report Q3 results after the market close Tuesday, and the consensus sees a loss of 14 cents a share on revenue of $236 million. The struggling social media platform has been hurt by Facebook (FB)-owned Instagram, which has copied all of Snapchat’s most popular features. Snap came public in March with shares priced at 17. The stock hit a record high of 29.44 the following day but now trades near 14.50.
Winter Is Coming For Department Stores
Macy’s (M), Nordstrom (JWN) and Kohl’s (KSS) report third-quarter earnings on Thursday. Shares of all three have already been submerged since JCPenney (JCP) last month warned of a deeper-than-anticipated Q3 loss. Meanwhile, a Morgan Stanley analyst recently predicted that holiday sales at traditional retailers could fall for the first time since 2008, as Apple’s $1,000 iPhone, Amazon.com (AMZN) and higher gas prices suck up more consumer spending.
Macy’s EPS is seen up 12% to 19 cents; revenue is expected to fall 5% to $5.325 billion. Nordstrom is expected to report EPS of 63 cents, a 25% drop, as revenue pushes 2% higher to $3.602 billion. Kohl’s EPS is forecast to slide 11% to 71 cents. Revenue is expected to dip 0.6% to $4.301 billion.
CVS Health Seeks Amazon Vaccine Shot
The drugstore giant reports before the opening bell on Monday, with Wall Street eager for an update on its talks to buy Aetna (AET) and gird itself for the threat from Amazon, which is reportedly eyeing the pharmacy market. Analysts see EPS slipping 9% to $1.49, as revenue rises 3.5% to $46.17 billion. CVS Health (CVS) shares have been under pressure as it seeks to turn around front-end store sales, even as FDA efforts to expedite approval of generic medicines is cutting into prescription sales.
Other Earnings To Watch
- Digital advertising platform Trade Desk (TTD) releases results Thursday after the close, and EPS is seen down 16% to 20 cents, despite a 45% increase in revenue to $77 million. The company has been trumpeting growth plans in China, where it has a pact with Baidu (BIDU), as well as ambitions to take on Alphabet (GOOGL) and Facebook (FB).
- Gym operator Planet Fitness (PLNT) is expected to log flat EPS of 16 cents on 8% revenue growth to $94 million when it reports Tuesday after the close. Shares have risen over 30% this year, but higher-end gym rivals have grown fast.
- Online travel booking site Priceline (PCLN) reports results Monday. Analysts expect EPS to climb 11% to $34.31 with revenue climbing 18% to $4.35 billion.
- Hotel operator Marriott (MAR) is on tap for Tuesday. Analysts see EPS rising 7.7% to 98 cents with revenue jumping 36.3% to $4.98 billion.
- Home-security cloud company Alarm.com (ALRM) reports Wednesday, and analysts expect EPS to climb 6% to 17 cents as revenue grows 22% to $83 million.
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