Earnings Preview: Chevron Corporation, American Airlines Group Inc, and Mastercard Inc

Chevron Corporation (CVX), American Airlines Group Inc (AAL), and Mastercard Inc (MA) will report earnings tomorrow

by Andrea Kramer

Published on Jan 28, 2016 at 1:47 PM
Updated on Jun 24, 2020 at 10:16 AM

Earnings season is in full swing, with Wall Street today digesting results from social media giant Facebook Inc (NASDAQ:FB) and Dow component Caterpillar Inc. (NYSE:CAT). Looking ahead, fellow blue chip Chevron Corporation (NYSE:CVX) will report tomorrow morning, as will airline issue American Airlines Group Inc (NASDAQ:AAL) and credit card concern Mastercard Inc (NYSE:MA). Below, we'll take a pre-earnings look at CVX, AAL, and MA.

  • CVX is 2.4% higher at $85.25, thanks to rebounding oil prices. The stock has made progress since touching a five-year low of $69.58 in late August, but is staring up at its 10-month moving average -- which hasn't been toppled on a monthly closing basis since August 2014. Following its last eight turns in the earnings confessional, Chevron Corporation has averaged a one-day move of 2%. This time, the options market is pricing in a much bigger single-session move of 4.1%. Recent option buyers have been betting bearishly, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.71 stands higher than nearly three-quarters of all readings from the past year.
  • A rebound in oil has translated into selling pressure for fuel-dependent AAL, which is down 3.9% at $38.11. The shares have given up roughly 10% so far in 2016, and have been battling recent resistance at their formerly supportive 20-week moving average. American Airlines Group Inc has averaged a one-day swing of 3.9% following its last eight earnings reports, but options traders are pricing in a bigger move of 7.6% this time. Despite AAL's struggles, speculators on the ISE, CBOE, and PHLX have bought to open 2.3 calls for every put during the past two weeks, hinting at a bullish bias.
  • MA is 0.7% lower at $84.22, bringing its 2016 deficit to 13.5%. The shares have been in a long-term uptrend for years, but are poised to close beneath their 20-month moving average for the first time since August 2010. Unlike sector peer Visa Inc (NYSE:V) -- which reports tonight -- MA speculators have been scooping up long calls. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.02 is higher than two-thirds of all other readings from the past 12 months. Traders are pricing in a one-day post-earnings move of 6.2% for Mastercard Inc -- more than double the stock's average swing of 2.6% over the past eight quarters.

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