Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jan 14, 2021 at 9:25 AM
Updated on Jan 14, 2021 at 11:50 AM
  • Opening View
 
Published on Jan 13, 2021 at 12:27 PM
Updated on Jan 14, 2021 at 11:38 AM
  • Midday Market Check

Stocks are trading on both sides of the aisle this afternoon, as investors digest yet another spike in Covid-19 cases, higher interest rates, and political tension. Also in focus is the latest round of inflation data, which was in line with Wall Street's expectations. As a result, the Dow Jones Industrial Average (DJI) was last seen trading just below breakeven, while the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are both trading modestly higher. 

Elsewhere, Vice President Mike Pence said he would not invoke the 25th Amendment to remove President Donald Trump from office, and the House of Representatives will vote to impeach the president once more later today. Meanwhile, Johns Hopkins University data showed the U.S. is registering more than 240,000 coronavirus infections a day.

Continue reading for more on today's market, including:

  • American Tower stock slips following billion-dollar deal.
  • GOOGL rises after suspending Trump's YouTube channel.
  • Plus, Intel appoints new CEO; videogame stock surges on investor deal; and Party City stock plummets on downbeat sales forecast.

MMC 0113

One stock seeing notable options activity today is Intel Corporation (NASDAQ: INTC), last seen up 7.9% to trade at $57.45, after the tech concern appointed VMware's (VMW) Pat Gelsinger as its new CEO. In response, the security earned a price-target hike from Evercore to $68 from $55. So far, 343,000 calls 141,000 puts have already crossed the tape, which is four times the intraday average. Most popular by far  is the January 2021 60-strike call, followed by the 65-strike call in the same series, with positions being opened at the latter. The security has had a rough run on the charts since its late-July bear gap, but today's pop helped it break through overhead pressure at the 200-day moving average, which has rejected several rally attempts since October. Year-over-year, INTC is down 3.3%.

Near the top of the New York Stock Exchange (NYSE) today is videogame concern  GameStop Corp. (NYSE:GME), up 70.8% at $34.08 at last check, after hitting a five-year high of $38.65. The impressive bull gap came after the company signed a deal with investor Ryan Cohen's RC Ventures LLC, and appointed the Chewy.com (CHWY) co-founder as well as other two e-commerce experts to its board. The security started picking up steam in late August -- with support from the 40-day moving average -- after dropping to an April 3, all-time-low of $2.57. Year-over-year, GME is up an astounding 587.7%.  

Near the bottom of the NYSE today is Party City Holdco Inc (NYSE:PRTY), last seen down 11.2% to trade at $7.17, after the company posted a dismal fourth-quarter sales forecast due to the rapid surge of COVID-19 cases. Shares had been steadily climbing up the charts since November to hit a Jan. 8, two-year high of $8.40, with support from the 20-day moving average. In the last nine months alone, PRTY added over 1,619%.

PRTY 20 Day

Published on Jan 14, 2021 at 11:02 AM
  • Buzz Stocks
Today's options pits are seeing a flurry of activity from both sides of the aisle. Already, 126,000 calls and 67,000 puts have exchanged hands -- four times the intraday average and volume pacing in the 99th percentile of its annual range.
Published on Jan 14, 2021 at 11:01 AM
  • Analyst Update
 
Published on Jan 14, 2021 at 10:27 AM
Updated on Jan 14, 2021 at 10:34 AM
  • Analyst Update
 
Published on Jan 14, 2021 at 10:31 AM
  • Buzz Stocks

The shares of Nordstrom, Inc. (NYSE:JWN) are taking a tumble today, off 5.1% at last check, following the retailer's nine-week holiday period sales report. Nordstrom experienced a 22% net sales decline, which fell in line with expectations. Meanwhile, the company's digital sales grew 23% year-over-year, and made up 54% of total sales. 

Analysts are brushing off the drop with bull notes. In fact, no fewer than six members of the brokerage bunch lifted their price targets, the highest coming from Evercore ISI to $45. Sentiment surrounding the stock is still cautious, though. Just two covering JWN consider it a "strong buy," compared to 11 calling it a "hold" or worse. Meanwhile, the 12-month consensus price target of $25.83, coming into today, represents a 27.8% discount to last night's close. 

Today's correction may have already been in the cards for JWN, per the stock's 14-day Relative Strength Index (RSI) of 77, indicating that the stock is well into "overbought" territory. The equity certainly has been a hot commodity in recent weeks, and the seven-day win streak is nothing short of impressive. Nordstrom stock hit its highest level since early March during yesterday's trading, and still sports a nine-month lead of 109%. 

Meanwhile, bulls are running the show in the options pits. In the first hour of trading, 8,197 calls and 3,565 puts have exchanged hands. The weekly 2/5 36.50-strike call is the most popular, followed by the 30-strike put in the same series. 

Published on Jan 14, 2021 at 9:50 AM
  • Buzz Stocks

Checking in with Bandwidth Stock After a Big Year

by Schaeffer's Digital Content Team

Bandwidth Inc. (NASDAQ:BAND) is a software company focused that operates as a cloud-based communications platform service provider. Bandwidth provides software application programming interfaces (or APIs) for voice and messaging to companies like Alphabet (GOOGL), Microsoft (MSFT), Cisco Systems (CSCO), and Zoom Communications (ZM).

Bandwidth stock is a ways off its Oct. 13 record high of $198.60. However, the pullbacks BAND has encountered in November and currently this month have been contained by the shares' 160-day moving average. Year-over-year, the equity is up 123%. 

BAND Stock Chart

A short squeeze could help BAND return to those October highs. Short interest increased by almost 8% in the most recent reporting period and the 8.40 million shares sold short accounts for a healthy 26% of the stock's total available float. At BAND's average pace of trading, it would take more than eight days for shorts to buy back their bearish bets.

Despite its $3.9 billion market cap, Bandwidth is still in its early growing stages. Although the company is growing revenue consistently, the growth rate isn’t sufficient enough at the moment to warrant its current valuation. BAND generated revenue of about $250 million over the past 12 months, and has only grown its net profit by $95 million over the past four years. Nonetheless, Bandwidth stock is demonstrating an overall upward trajectory and positive figures, including a balance sheet with nearly twice their total debt amount in cash and cash equivalents.

Published on Jan 14, 2021 at 8:19 AM
  • Buzz Stocks
  • Earnings Preview

Consumer lending and bank stock Ally Financial Inc. (NYSE:ALLY) is fresh off a Jan. 13 record high of $41.99. This comes a day after Ally announced a common stock repurchase plan of up to $1.6 billion in 2021. In the company’s press release, Ally Financial stated that it would begin repurchasing shares during the first quarter of this year. ALLY won't fade from the spotlight, either, with the financial giant set to report earnings before the open on Friday, Jan. 22.

Ally Financial stock outperformed expectations on three of past four earnings reports. For the fourth quarter of 2019, ALLY beat expectations by a margin of $0.02 and reported an earnings per share (EPS) of $0.95. For the first quarter of 2020, ALLY significantly missed Wall Street's earnings expectations by a margin of $1.14. Ally Financial reported a major earnings comeback for the second quarter of 2020, reporting an EPS of $0.61 and beat expectations by a margin of $0.33. Finally, in the most recently reported quarter, Ally Financial reported earnings of $1.25 per share, beating analysts' expectation by a margin of $0.57. For its upcoming earnings report due out next week, ALLY is anticipated to report an EPS of $1.03.

ALLY declared a quarterly cash dividend of $0.19 per share of the company's common stock, payable on Feb. 12, to stockholders of record on Feb. 1. Ally Financial also has a forward dividend of $0.76 and a forward dividend yield of 2.03%. The company has paid dividends to stockholders since 2016.

ALLY has almost quadrupled since its March 18 record bottom near $10. It's been quite the V-shaped rally for the stock since then, with the channel of higher highs guided higher by its ascending 40-day moving average. Year-over-year, the equity is up 30%. 

Even with earnings looming, it's a prime time to buy premium on the ALLY's near-term options. The security's Schaeffer's Volatility Index (SVI) of 42% ranks in the 13th annual percentile, meaning short-term options are relatively cheap, from a historical volatility perspective. What's more, Ally stock has been a strong performer for premium buyers over the past year, based on its Schaeffer's Volatility Scorecard (SVS) of 96 out of 100. In other words, ALLY has shown a tendency to make bigger-than-expected moves during the past 12 months, relative to what its options have priced in.

ALLY Stock Chart

Published on Jan 14, 2021 at 7:27 AM
  • Buzz Stocks

Today's Stock Market News & Events: 1/14/2021

by Schaeffer's Digital Content Team

Stocks were, for the most part, able to shake off Wednesday's flat trading day to finish the day with solid gains, as investors were digesting news of sliding interest rates against surging pandemic numbers, along with the pending turmoil in Washington.  Making headlines was yesterday's vote to impeach President Donald Trump, which was passed by the House after market hours. 

The Dow Jones Industrial Average (DJI - 31,060.47) lost 8.2 points on Wednesday. The S&P 500 Index (SPX - 3,809.84) added 8.7 points and the Nasdaq Composite (IXIC - 13,128.52) added 56.5 points. The Cboe Volatility Index (VIX - 22.21) lost 4.8% during yesterday's trading session.

Today, investors can look forward to the release of initial and continuing jobless claims, while the import price index is on tap, too. Plus, there is a solid list of earnings reports being released, as earnings season is just heating up.

The following companies are slated to release quarterly earnings reports today, January 14:

Aphria, Inc. (NASDAQ:APHA -- $10.00) cultivates, processes, produces, markets, distributes, and sells medical cannabis. Aphria will report its second-quarter earnings before the bell today.

BlackRock, Inc. (NYSE:BLK -- $779.75) is a publicly owned investment manager. BlackRock will report its fourth-quarter earnings of 2020 before the bell today.

Delta Air Lines, Inc. (NYSE:DAL -- $40.45) provides scheduled air transportation for passengers and cargo. Delta Air Lines will report its fourth-quarter earnings of 2020 before the bell today.

First Republic Bank, Inc. (NYSE:FRC -- $161.25) provides private banking, private business banking, real estate lending, and wealth management services. First Republic Bank will report its fourth-quarter earnings of 2020 before the bell today.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM -- $119.56) manufactures and sells integrated circuits and semiconductors. Taiwan Semi will report its fourth-quarter earnings of 2020 before the bell today.

Progress Software Corporation (NASDAQ:PRGS -- $47.47) develops business applications. Progress Software will report its fourth-quarter earnings of 2020 after the market closes today.

Here is a quick recap of how Wednesday's earnings reports played out:

IHS Markit, Ltd. (NYSE:INFO -- $86.78) provides critical information, analytics, and solutions for various industries and markets worldwide. Earnings per share rose 10.77% over the past year to $0.72, which beat the estimate of $0.67. Revenue of $1,107,000,000 decreased by 1.16% year over year, which missed the estimate of $1,110,000,000.

Shaw Communications, Inc. (NYSE:SJR -- $17.75) operates as a connectivity company in North America. Earnings per share were unchanged year over year to $0.24, which beat the estimate of $0.22. Revenue of $1,040,000,000 declined by 2.35% year over year, which beat the estimate of $1,010,000,000.

Closing out this week, tomorrow is completely jam packed. Retail sales, industrial production, and capacity utilization data is all due out. In addition, the Empire state and producer price indexes latest data are slated to be reported. Lastly, preliminary consumer sentiment index data and business inventories reports are set to be released.

Please note that the U.S. stock market will be operating on a shortened schedule next week. The Nasdaq and New York Stock Exchange will both be closed on Monday, Jan. 18, in observance of Martin Luther King Jr. Day. A normal trading session will resume on Tuesday, Jan. 19, starting at 9:30 a.m. ET. 

All economic dates listed here are tentative and subject to change.

Published on Jan 13, 2021 at 4:38 PM
Updated on Jan 13, 2021 at 4:49 PM
  • Market Recap

With the exception of the Dow, stocks were mostly able to shake off Wednesday's static trading to finish the day with solid gains, as Wall Street weighed sliding interest rates against surging pandemic numbers, and the turmoil brewing in Washington. After days of sitting near its March highs, the benchmark 10-year note yield shed over 6 basis points to 1.1%, while the 30-year bond yield also dropped.

The Dow tried to come back near the end of the session, propped up on an unexpected surge from index-member Intel (INTC), following news of its CEO's resignation. The blue-chip index eventually pared these gains, however, to settle just south of breakeven. The headlines gave the tech-heavy Nasdaq Composite a boost as well, while the S&P 500 also finished the session with a win.

Also making headlines is this afternoon's vote to impeach President Donald Trump, which was passed by the House just before 4:30PM EST, making Trump the first ever president to be impeached twice. 

Continue reading for more on today's market, including:

  • The streaming stock to nab a lofty bull note from Nielsen.  
  • Urban Outfitter's dim holiday sales created a buzz among bears. 
  • Plus, why PTON could be a good resolution for bulls; Visa nabs slew of bull notes; and breaking down Lowe's new "Total Home" approach. 

The Dow Jones Industrial Average (DJI - 31,060.47) lost 8.2 points, or 0.03% on Wednesday. Intel (INTC) led the 15 gainers with a nearly 7% pop, while the 15 losers were paced by IBM (IBM), which fell 1.8%. 

Meanwhile, the S&P 500 Index (SPX - 3,809.84) closed up 8.7 points or 0.2%, and the Nasdaq Composite (IXIC - 13,128.52) tacked on 56.5 points, or 0.4%.

Lastly, the Cboe Volatility Index (VIX - 22.21) lost 1.2 point, or 4.8%.

Closing Summary 0113

NYSE 0113

  1. CVS Health (CVS) is set to hire thousands of pharmacists and pharmacy technicians, as it prepares for government approval to start administering the Covid-19 vaccination in its pharmacy locations across the U.S. (CNBC)
  2. Apple (AAPL) announced it plans on investing $100 million toward racial-justice goals, which will include a $25 million investment toward the launch of the Propel Center -- an organization that supports students and faculty at historically black universities. (MarketWatch) 
  3. Workout stock option bulls should resolve to buy in 2021.
  4. Visa enjoyed several analyst bull notes today, despite abandoned merger. 
  5. Here's what investors need to know about Lowe's new "Total Home" approach.  

Earnings 0113.

UVOL 0113

Oil Snaps Win Streak as Product Inventories Rise

Oil broke its six-day win streak on Wednesday. This drop came after the Energy Information Administration reported a slight drop in crude inventories, but an increase in gasoline inventories by 4.4 million barrels last week -- exceeding expectations. February-dated crude lost 30 cents, or 0.6%, to settle at $52.91 per barrel.

Gold, meanwhile, closed at a one-week high as political tumult and the latest inflation report gave investors a reason to turn back to the safe haven. February-dated gold added $10.70 or 0.6%, to settle at $1,854.90 an ounce.

Published on Jan 13, 2021 at 3:35 PM
Updated on Jan 13, 2021 at 3:38 PM
  • Quantitative Analysis

 

 
Published on Jan 13, 2021 at 2:36 PM
Updated on Jan 13, 2021 at 3:27 PM
  • Buzz Stocks
  • Analyst Update
 

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