Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Oct 16, 2020 at 7:53 AM
  • Buzz Stocks

Today's Stock Market News & Events: 10/16/2020

by Schaeffer's Digital Content Team

The Dow posted its third-straight loss on Thursday, despite a frantic scramble and brief foray into positive territory in the final hour of trading. The S&P 500 and Nasdaq both closed lower for their third-straight loss as well, while Wall Street's "fear gauge," the Cboe Volatility Index (VIX), scored its fourth-straight win. The Dow Jones Industrial Average (DJI - 28,494.20) dropped 0.7% yesterday. The S&P 500 Index (SPX - 3,483.34) fell0.2% for the day and the Nasdaq Composite (IXIC - 11,713.87) shed 0.5% during Thursday's trading session. Lastly, the Cboe Volatility Index (VIX - 26.97) added 2.2% for the day yesterday. After a pretty frantic day in the market yesterday, we're here to catch you up on some unique trading opportunities that you may have missed during the hysteria, all completely actionable for your convenience:


That's enough about yesterday. Focusing on today, investors will be digging into core retail sales and consumer sentiment data. And the earnings reports won't stop rolling, either!

For your convenience, we have rounded up the companies slated to release their earnings today, October 16:

  • Ally Financial, Inc. (NYSE:ALLY -- $27.87) provides various digital financial products and services in the United States and Canada. Last quarter, we reported that Ally cancel CardWorks acquisition and drove shares up nearly 15%.
    • Ally Financial will report its fiscal second-quarter earnings before the bell today.
  • Badger Meter, Inc. (NYSE:BMI -- $71.83) manufactures and markets flow measurement, control, and communication solutions.
    • Badger Meter will report its fiscal second-quarter earnings before the bell today.
  • The Bank of New York Mellon Corporation (NYSE:BK -- $37.23) provides a range of financial products and services in the United States and internationally. BK has remained essentially flat year-over-year.
    • BNY Mellon will report its fiscal second-quarter earnings before the bell today.
  • CIT Group, Inc. (NYSE: CIT -- $19.74) provides banking and related services to commercial and individual customers. CIT is currently up 4.4% year-over-year.
    • CIT Group will report its fiscal second-quarter earnings before the bell today.
  • Citizens Financial Group, Inc. (NYSE:CFG -- $27.90) provides retail and commercial banking products and services in the United States.
    • Citizens Financial will report its fiscal second-quarter earnings before the bell today.
  • J.B. Hunt Transport, Inc. (NASDAQ:JBHT -- $141.84) provides surface transportation and delivery services. JBHT stock shares soared to record highs after the company's last earnings beat.
    • J.B. Hunt will report its fiscal second-quarter earnings before the bell today.
  • Kansas City Southern (NYSE:KSU -- $184.01) provides domestic and international rail transportation services in North America.
    • Kansas City Southern will report its fiscal second-quarter earnings before the bell today.
  • Schlumberger Limited (NYSE:SLB -- $16.42) supplies technology for reservoir characterization, drilling, production, and processing to the oil and gas industry worldwide. SLB is down 38.4% year-to-date.
    • Schlumberger will report its fiscal second-quarter earnings before the bell today.
  • State Street Corporation (NYSE:STT -- $66.95) provides a range of financial products and services to institutional investors worldwide.
    • State Street will report its fiscal second-quarter earnings before the bell today. 
  • V.F. Corp (NYSE:VFC -- $77.74) engages in the design, production, procurement, marketing, and distribution of branded lifestyle apparel, footwear, and related products. VFC is down 18% year-to-date. VFC stock was upgraded earlier last quarter after reporting a growing demand as well as growth in web traffic.
    • V.F. Corp will report its fiscal first-quarter earnings of 2021 before the bell today.

 
We have also rounded up how the earnings confessional played out for all those quarterly reports released yesterday, October 15:

  • Aphria, Inc. (NASDAQ:APHA) cultivates, processes, produces, markets, distributes, and sells medical cannabis. We shared Aphria's latest news on their first certified European shipment of dried flower last week, along with a ton of other cannabis stock news. Aphria reported its fiscal fourth-quarter earnings before the bell yesterday.

APHA STOCK CHART

  • The Charles Schwab Corporation (NYSE:SCHW) provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. Charles Schwab reported its fiscal fourth-quarter earnings before the bell on Thursday.
    • Earnings per share decreased 31.08% year-over-year to $0.51, which beat the estimate of $0.46. Revenue of $2.45 billion decreased by 9.70% from the same period last year, which beat the estimate of $2.43 billion.

SCHW STOCK CHART

  • Commercial Metals Company (NYSE:CMC) manufactures, recycles, and markets steel and metal products, and related materials and services. Commercial Metals will released its third-quarter earnings before the bell yesterday.
    • Earnings per share were up 3.95% over the past year to $0.79, which beat the estimate of $0.60. Revenue of $1.41 billion decreased by 8.68% year-over-year, which beat the estimate of $1.37 billion.

CMC STOCK CHART

  • Home Bancshares, Inc. (NASDAQ:HOMB) operates as the bank holding company for Centennial Bank that provides commercial and retail banking, and related financial services. Home Bancshares reported its fiscal second-quarter earnings before the bell on Thursday.
    • Earnings per share were down 4.55% over the past year to $0.42, which beat the estimate of $0.39. Revenue of $176.09 million rose by 4.99% year-over-year, which beat the estimate of $172.87 million.

HOMB STOCK CHART

  • Morgan Stanley (NYSE:MS) provides various financial products and services to corporations, governments, financial institutions, and individuals. Amid news that Morgan Stanley is set to buy industry giant Eaton Vance (NYSE:EV), MS stock took a dip last week. Morgan Stanley reported its fiscal second-quarter earnings before the bell yesterday.
    • Earnings per share increased 31.40% year-over-year to $1.59, which beat the estimate of $1.28. Revenue of $11.66 billion rose by 16.20% year-over-year, which also beat the estimate of $10.64 billion.

MS STOCK CHART

  • Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells integrated circuits and semiconductors. TSM has gone up 21.6% year-to-date. We took a look behind the scenes at Taiwan Semi earlier last quarter. Taiwan Semi reported its fiscal second-quarter earnings before the bell on Thursday.
    • Earnings per share were up 45.16% over the past year to $0.90, which beat the estimate of $0.77. Revenue of $12.14 billion rose by 29.20% year-over-year, which beat the estimate of $11.51 billion.

TSM STOCK CHART

  • Truist Financial Corporation (NYSE:TFC) provides banking and trust services in the Southeastern and Mid-Atlantic United States. TFC has increased by a whopping 85.1% year-over-year. Truist Financial reported its third-quarter earnings before the bell yesterday.

TFC STOCK CHART

  • Walgreens Boots Alliance, Inc. (NASDAQ:WBA) operates as a pharmacy-led health and wellbeing company. Here is a closer look at Walgreens' fundamentals set up for a long-term investment option. Walgreens reported its third-quarter earnings before the bell on Thursday.
    • Earnings per share were down 28.67% year-over-year to $1.02, which beat the estimate of $0.96. Revenue of $34.75 billion rose by 2.33% from the same period last year, which beat the estimate of $34.37 billion. Following the upbeat earnings release, we reported on the WBA stock movement to provide actionable trading insights.

WBA STOCK CHART

  • WNS (Holdings) Limited (NYSE:WNS) provides data, voice, analytical, and business transformation services worldwide. WNS has dropped 2.9% year-to-date. WNS reported its fiscal second-quarter earnings before the bell yesterday.

WNS STOCK CHART

  • Westamerica Bancorporation (NASDAQ:WABC) operates as a bank holding company that provides various banking products and services. Westamerica Banc reported its fiscal second-quarter earnings during Thursday's trading session.

WABC STOCK CHART

  • Intuitive Surgical, Inc. (NASDAQ:ISRG) designs, manufactures, and markets da Vinci surgical systems, and related instruments and accessories. Intuitive Surgical reported its fiscal second-quarter earnings after the market closes yesterday.
    • Earnings per share fell 19.24% over the past year to $2.77, which beat the estimate of $2.07. Revenue of $1.08 billion declined by 4.43% from the same period last year, which beat the estimate of $970.97 million.

ISRG STOCK CHART

  • Marten Transport, Ltd. (NASDAQ:MRTN) operates as a temperature-sensitive truckload carrier for shippers in the United States, Canada, and Mexico. Marten Transport reported its fiscal second-quarter earnings after the market closes on Thursday.
    • Earnings per share decreased 33.33% over the past year to $0.20, which were in line with the estimate of $0.20. Revenue of $216.01 million rose by 0.48% from the same period last year, which missed the estimate of $220.52 million.

MRTN STOCK CHART


Though investors have already had an incredibly busy month featuring election drama, a second stimulus, and a potential coronavirus vaccine, there is still plenty of data to sift through this upcoming week. Housing data will be highlighted, followed by jobless claims and consumer data later in the week. As earnings season gains steam, the latest quarterly reports will trickle in as well, with several blue-chip names such as IBM (IBM), Intel (INTC), Procter & Gamble (PG), Travelers (TRV), and Verizon (VZ) among the notable reports. So, after the closing bell rings today, make sure you rest up this weekend. There will be no shortage of trading opportunities come Monday.

All earnings and economic dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Published on Oct 15, 2020 at 2:52 PM
  • Quantitative Analysis

The shares of Kroger Co (NYSE:KR) are up 0.5% at $34.01 this afternoon, despite just yesterday getting a a downgrade to "equal-weight" from "overweight" and price-target cut to $34 from $38 at Wells Fargo. And while the grocery store giant has cooled off from its nearly four-year, Sept. 3 high of $37.72, the security is still up 38.5% year-over-year. Even better news is that Kroger stock's latest pullback has it near a historically bullish trendline, which could help the security surge even higher in the coming weeks. 

More specifically, KR just came within one standard deviation of its 160-day moving average, after spending the last few weeks above the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar signals have occurred during the past three years. Kroger stock enjoyed positive returns one month after each signal, averaging a roughly 10.5% gain. From the equity's current perch, a move of similar magnitude would put the KR just above the $37 mark -- a chip-shot from its nearly four-year peak.

KR 160

The  majority of analysts covering KR are bearish, meaning there is still plenty of room for upgrades going forward, which could propel the equity even higher. Of the 16 in coverage, 11 carry a tepid "hold" or worse rating.

A short squeeze could create even more tailwinds for the security. Short interest is up 10.5% in the last two reporting periods, and the 63.08 million shares sold short make up 8.2% of the stock's available float. In other words, it would take almost two weeks to buy back these bearish bets, at KR's average pace of trading. 

For those wanting to take advantage of Kroger stock's next leg higher, options may be an interesting play. The stock's Schaeffer's Volatility Index (SVI) of 30% sits higher than just 12% of readings in its annual range, suggesting short-term options are pricing in relatively low volatility expectations.

Published on Oct 15, 2020 at 2:36 PM
  • The Week Ahead

Though investors are in the midst of a busy month featuring election drama, a second stimulus, and a potential coronavirus vaccine, there is still plenty of data to sift through this upcoming week. Housing data will be highlighted, followed by jobless claims and consumer data later in the week. As earnings season gains steam, the latest quarterly reports will trickle in as well, with several blue-chip names such as IBM (IBM), Intel (INTC), Procter & Gamble (PG), Travelers (TRV), and Verizon (VZ) among the notable reports. 

Below is a brief list of some key market events and a few high-profile earnings releases scheduled for the upcoming week. All earnings and economic dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday, October 19 starts the week off with the NAHB home builders' index and the Federal Budget for September. On the earnings docket will be Haliburton (HAL), IBM, Steel Dynamics (STLD). 

On Tuesday, October 20, investors will be looking at September's housing starts and building permits. Meanwhile, Lockheed Martin (LMT), Netflix (NFLX), Procter & Gamble (PG), Snap (SNAP), Texas Instruments (TXN), Travelers Companies will all report earnings.

By Wednesday, October 21, the Federal Reserve's "Beige book" is on tap, with earnings from Spirit Airlines (SAVE), Tesla (TSLA), Verizon, and Whirlpool (WHR) slated for release.

Thursday, October 22, gets busier with initial and continuous jobless claims, as well as existing home sales. Also, AT&T (T), Coca-Cola (KO), Intel, and Southwest Air (LUV) will step into the earnings confessional.

And finally on Friday, October 23, the Markit Manufacturing Purchasing Managers Index (PMI) and the Markit Services PMI and will be released, with no earnings of note.

Published on Oct 15, 2020 at 1:51 PM
  • Intraday Option Activity
JD call volume is running at double its usual rate. The December 80 call, where new positions are being opened, is the most popular by far. 
Published on Oct 15, 2020 at 1:44 PM
  • Editor's Pick
  • Strategies and Concepts

It's that time of year again... Pumpkins sporting menacing grins, polka-dotting yards, scary stories are told around the bonfire, old Slasher films make their return. And it all leads up to ghouls and goblins -- and maybe the occasional superhero -- knocking on your door in search of delicious treats. The spooky season is truly upon us in full; but something else is weighing on investors' minds during this time, something much more eerie. Of course, we're talking about...the pre-holiday earnings season.

Yes, another corporate earnings season is officially in full swing, with a slew of banks and blue chips already reporting. With the days already moving by fast, we'd like to take a minute to quickly rehash what these reports entail and why they're relevant. 

First things first: publicly traded companies file an earnings report each quarter, as an event with a set date. The quarters are simply three-month periods, with reports being released every January, April, July, and October (for those not under their own fiscal schedule). The reports break down each company's quarterly profits/losses, revenue, expenses, and any other financial metrics deemed materially relevant by the company's big wigs. Quarterly reports may also include a forecast for the coming quarter or the remainder of the fiscal year, and could even list something like a dividend increase or decrease. Sometimes big updates or news from the reporting company may also be added to the mix (such as c-suite updates).

These financial updates are extremely relevant, as they give shareholders an in-depth look at how the company managed over the past few months and allow the opportunity to compare to previous quarters, so as to better understand how the company may fare going forward. Sell-side analysts, meanwhile, chime in before the release of such reports, and issue their estimates or a company's expected earnings or losses in the relevant quarter. The estimates are gathered, averaged, and put into a consensus forecast which is used as a benchmark against the final results. 

For the most part, publicly traded companies report their earnings according to Generally Accepted Accounting Principles, or GAAP, which simply refers to a uniform standardized set of industry-wide accounting procedures -- just ensuring a consistent methodology. However, a company may also issue non-GAAP, or "adjusted," results, which often exclude certain one-time events, charges, or financial gains. The non-GAAP figure is what's typically compared against analysts' estimates. 

As previously mentioned, earnings releases more often than not have a set date. So, investors can take advantage of that by playing options before the earnings announcement, or after the report has been released. The former can be risky, though it can yield large profits if the directional move is correctly predicted. Meanwhile, jumping in with options after the release could set the investor on track with long-term directional movement. As such, initiating an options trade beforehand can be just as profitable as a pre-earnings move. 

Published on Oct 15, 2020 at 10:14 AM
Updated on Oct 15, 2020 at 11:39 AM
  • Buzz Stocks
 
Published on Oct 15, 2020 at 11:22 AM
  • Analyst Update
 
Published on Oct 15, 2020 at 11:18 AM
  • Intraday Option Activity
While Fastly didn't name names, many are speculating that this customer could be TikTok -- the popular social media app that's seen plenty of backlash over security and privacy concerns over the past few months, based on its links to China. 
Published on Oct 15, 2020 at 10:48 AM
Updated on Oct 15, 2020 at 10:48 AM
  • Buzz Stocks

The shares of Walgreens Boots Alliance Inc (NASDAQ: WBA) are up 5.5% to trade at $37.89 this morning, after the company reported fiscal fourth-quarter earnings and revenue  that beat analysts' expectations. Additionally, the blue chip announced a 2.2% dividend increase.

The past three months have been especially brutal for the equity. In that time, it's down 11.7%, and hasn't managed a close above $37.50 since late August. To put it in perspective, the last time WBA consistently traded below that level was at the end of 2012. Additionally, the last three months have seen consistent pressure in the form of the stock's 60-day moving average. Longer term, Walgreens stock has shed 39.1% in 2020.  

Switching gears, today's options pits are seeing activity on both sides of the tape. In just the first hour of trading, over 12,000 calls and 9,123 puts have exchanged hands -- seven times the intraday average and option volume pacing in the highest percentile of its annual range. The October 38 put is the most popular, followed up by the 40-strike call from the same series. 

Additionally, short interest is up 5.4% in the past reporting period, and now accounts for roughly 20.01 million shares, or 2.2% of the stock's total available float. Options traders are pricing in relatively low volatility expectations at the moment, too, per the stock's Schaeffer's Volatility Index (SVI) of 44%, which sits higher than just 27% of all other annual readings.

Published on Oct 15, 2020 at 8:25 AM
  • Buzz Stocks

AT&T is the Ultimate Dividend Stock Right Now

by Schaeffer's Digital Content Team

AT&T Inc. (NYSE:T) is a U.S.-based telecommunications conglomerate with operations in multiple countries. The company has over a century of history. It's also the parent company of other major corporations including WarnerMedia and DirecTV. At the beginning of 2020, T stock traded near its 52-week high of $39.70, but T stock is currently down about 30% year-to-date. T stock remains near its 52-week low of $26.08 since its decline in March. AT&T is slated to deliver earnings before-the-open on Thursday, October 22 and the company will be looking to push T stock back up to its pre-pandemic highs.

AT&T has a market cap of $197.72 billion and a book value of $24.69 per share. Its price-to-book (PB) ratio stands at 1.15. The company has a trailing price-earning (P/E) ratio of 17.27, and a forward P/E ratio of 8.86. The company's trailing 12-month P/E ratio is 16.92.

AT&T has beat expectations in three of its last four earnings reports.  In the most recent quarter, AT&T beat expectations by $0.04. The company reported an earnings per share (EPS) of $0.83, just beating out the expected $0.79. On October 22, AT&T is expected to report an EPS of $0.76. continuing the downward earnings spiral the company has been experiencing recently. If AT&T reports the expected EPS of $0.76 for the third quarter, it would represent an $0.18 decrease year-over-year, as AT&T reported an EPS of $0.94 in the third quarter of 2019. In the first quarter of 2020, AT&T missed earning by just $0.01. The company has a trailing 12-month EPS of $1.64.

AT&T grew its revenue more than $10 billion between 2017 and 2019. In 2020, AT&T has experienced a decrease in revenue. First quarter earnings alone decreased by $4 billion, and another $2 billion in the second quarter of this year. The company’s net income growth has been largely inconsistent over last 4 years. Nonetheless, AT&T has maintained their annual net income above the $10 billion on a reasonably consistent bases. In 2017 and 2018, the company produced net income of $29.45 billion and $19.37 billion, respectively.

AT&T currently has $17 billion in cash and $196.22 billion in total debt. The company’s balance sheet holds $547.9 billion in total assets and $354.45 billion in total liabilities. AT&T's total equity stands at $1.54 billion. The company has paid its investors dividends consistently since 1984, and have consistently grown their dividend since 1999. AT&T last paid a dividend of $0.52 per share. The $2.08 annual dividend AT&T pays comes in at a dividend yield of 7.39%.

At this point, AT&T doesn’t have much room to grow revenue-wise, but it does have room to increase its stock price. T stock currently trades at a price that is only $3.06 lower than its book value. The recent dip will be a huge opportunity for dividend investors to pick up the stock at a discounted price.

Furthermore, as one would have been expect from a massive and consolidated company like AT&T, the company has maintained its high-yield dividend during the ongoing worldwide pandemic. The company could continue raising its dividend for years to come, too. T stock has an opportunity to see decent price appreciation as the stock slowly climbs back to a more justifiable valuation. Overall, it's natural to feel that AT&T seems to be too big to fail. The biggest potential risk for investors will that AT&T gets broken up due to monopoly-like practices. Aside from that, AT&T is a clear winner for dividend investors.

Published on Oct 15, 2020 at 8:07 AM
  • Buzz Stocks

Today's Stock Market News & Events: 10/14/2020

by Schaeffer's Digital Content Team

With investors already feeling beaten down around the subject of a second stimulus, Treasury Secretary Steven Mnuchin announced yesterday that, although progress between Democrats and Republicans is being made, he did not expect a stimulus package before the election. The result of that announcement plus some dismal earnings reactions from banking giants? All major indexes ended in the red on Wednesday. The Dow Jones Industrial Average (DJI - 28,514) lost 165.8 points. The S&P 500 Index (SPX - 3,488.67) fell 23.3 points yesterday, while the Nasdaq Composite (IXIC - 11,768.73) shed 95.2 points during Wednesday's trading session.

Yesterday was truly packed with action and we wouldn't blame you if you missed a few things. That's why we have rounded up the must-reads from yesterday, complete with actionable trading insights:


Today, October 15, will be a busy day with the producer price index (PPI) on top along with a whole slew of earnings reports from big names. For your convenience, we have rounded up the companies slated to release their earnings today, October 15:

  • Aphria, Inc. (NASDAQ:APHA -- $5.88) cultivates, processes, produces, markets, distributes, and sells medical cannabis. We shared Aphria's latest news on their first certified European shipment of dried flower last week, along with a ton of other cannabis stock news.
    • Aphria will report its fiscal fourth-quarter earnings before the bell today.
  • The Charles Schwab Corporation (NYSE:SCHW -- $37.12) provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.
    • Charles Schwab will report its fiscal fourth-quarter earnings before the bell today.
  • Commercial Metals Company (NYSE:CMC -- $22.93) manufactures, recycles, and markets steel and metal products, and related materials and services. CMC is currently down 8.1% year-over-year.
    • Commercial Metals will report its third-quarter earnings before the bell today.
  • Home Bancshares, Inc. (NASDAQ:HOMB -- $16.49) operates as the bank holding company for Centennial Bank that provides commercial and retail banking, and related financial services.
    • Home Bancshares will report its fiscal second-quarter earnings before the bell today.
  • Morgan Stanley (NYSE:MS -- $50.65) provides various financial products and services to corporations, governments, financial institutions, and individuals. Amid news that Morgan Stanley is set to buy industry giant Eaton Vance (NYSE:EV), MS stock took a dip last week.
    • Morgan Stanley will report its fiscal second-quarter earnings before the bell today.
  • Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM -- $88.60) manufactures and sells integrated circuits and semiconductors. TSM has gone up 21.6% year-to-date. We took a look behind the scenes at Taiwan Semi earlier last quarter.
    • Taiwan Semi will report its fiscal second-quarter earnings before the bell today.
  • Truist Financial Corporation (NYSE:TFC -- $42.23) provides banking and trust services in the Southeastern and Mid-Atlantic United States. TFC has increased by a whopping 85.1% year-over-year.
    • Truist Financial will report its third-quarter earnings before the bell today.
  • Walgreens Boots Alliance, Inc. (NASDAQ:WBA -- $35.91) operates as a pharmacy-led health and wellbeing company. Here is a closer look at Walgreens' fundamentals set up for a long-term investment option.
    • Walgreens will report its third-quarter earnings before the bell today.
  • WNS (Holdings) Limited (NYSE:WNS -- $67.87) provides data, voice, analytical, and business transformation services worldwide. WNS has dropped 2.9% year-to-date.
    • WNS will report its fiscal second-quarter earnings before the bell today.
  • Westamerica Bancorporation (NASDAQ:WABC -- $54.87) operates as a bank holding company that provides various banking products and services.
    • Westamerica Banc will report its fiscal second-quarter earnings during the trading hours today.
  • Intuitive Surgical, Inc. (NASDAQ:ISRG -- $751.08) designs, manufactures, and markets da Vinci surgical systems, and related instruments and accessories.
    • Intuitive Surgical will report its fiscal second-quarter earnings after the market closes today.
  • Marten Transport, Ltd. (NASDAQ:MRTN -- $17.21) operates as a temperature-sensitive truckload carrier for shippers in the United States, Canada, and Mexico.
    • Marten Transport will report its fiscal second-quarter earnings after the market closes today.


Again, for your convenience, we have rounded up how the banking-dominated earnings docket played out for all those released yesterday, October 14:

  • ASML Holding N.V. (NASDAQ:ASML) develops, produces, markets, sells, and services advanced semiconductor equipment systems. ASML is 32.6% higher year-over-year. ASML Holding reported its fiscal second-quarter earnings before the bell on Wednesday.

ASML STOCK CHART

  • Bank of America Corporation (NYSE:BAC) provides banking and financial products and services worldwide. BAC has gone down 11.6% year-over-year. Bank of America released its fiscal second-quarter earnings before the bell yesterday.
    • Earnings per share fell 32% year-over-year to $0.51, which beat the estimate of $0.49. Revenue of $20.45 billion decreased by 10.91% year-over-year, which missed the estimate of $20.81 billion.

BAC STOCK CHART

  • The Goldman Sachs Group, Inc. (NYSE:GS) operates as an investment banking, securities, and investment management company worldwide. Last quarter, Goldman Sachs announced a partnership with Walmart (NYSE:WMT) and we analyzed the stock's reaction here. Goldman Sachs announced its fiscal second-quarter earnings before the bell yesterday.
    • Earnings per share were up 102.09% year-over-year to $9.68, which beat the estimate of $5.57. Revenue of $10.78 billion up by 29.53% year-over-year, beating analysts' estimate of $9.46 billion.

GS STOCK CHART

  • The PNC Financial Services Group, Inc. (NYSE:PNC) operates as a diversified financial services company in the United States. PNC has remained essentially flat year-over-year. PNC reported its fiscal second-quarter earnings before the bell yesterday.
    • Earnings per share increased 15.31% over the past year to $3.39, beating estimates of $2.12. Revenue of $4.28 billion decreased by 4.72% from the same period last year, which beat analysts' estimate of $4 billion.


PNC STOCK CHART

  • The Progressive Corporation (NYSE:PGR) provides personal and commercial insurance and related services primarily in the United States. Progressive reported its fiscal second-quarter earnings before the bell yesterday.
    •  Earnings per share increased 32.39% over the past year to $1.88, which beat estimates of $1.72. The company reported revenue of $9.97 billion, up by 10.67% year-over-year, but missed analyst estimates of $10.92 billion.

PGR STOCK CHART

  • U.S. Bancorp (NYSE:USB) provides various financial services in the United States. USB has remained essentially flat year-to-date. Last quarter, U.S. Bancorp battled through analyst skepticism and we analyzed the stock's reaction here. U.S. Bancorp released its fiscal second-quarter earnings before the bell yesterday.
    •  The company reported that earnings per share decreased 13.91% to $0.99, which beat the estimate of $0.91. Revenue of $5.94 billion increased by 0.75% when compared to the same period last year. This beat analysts' estimate of $5.71 billion.

USB STOCK CHART

  • UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified health care company in the United States. Late last month, there were rumors of acquisition surrounding UnitedHealth. Here is how the stock reacted.
    UnitedHealth released its fiscal second-quarter earnings before the bell on Wednesday.
    •  Earnings per share fell 9.54% year-over-year to $3.51, beating analysts' estimate of $3.09. Revenue of $65.12 billion increased by 7.89% year-over-year, beating estimates of $63.96 billion.

UNH STOCK CHART

  • Wells Fargo & Company (NYSE:WFC) provides banking, investment, mortgage, and consumer and commercial finance products and services. Wells Fargo announced its fiscal second-quarter earnings before the bell yesterday.

WFC STOCK CHART

  • Alcoa Corporation (NYSE:AA) produces and sells bauxite, alumina, and aluminum products. Alcoa reported its fiscal second-quarter earnings after the market closes yesterday.
    •  Earnings per share decreased 165.91% over the past year to -$1.17 as reported yesterday, which beat the expected -$1.38 EPS. Revenue of $2.37 billion represents a decrease of 7.87% year-over-year, beating the analysts' estimate of $2.23 billion.

AA STOCK CHART

  • Sleep Number Corporation (NASDAQ:SNBR) provides sleep solutions and services in the United States. Sleep Number reported its fiscal second-quarter earnings after the market closed yesterday.
    •  The company reported an EPS of $1.79, representing an increase of 90.43% year-over-year. This EPS beat analyst expectations of $1.00. Quarterly company revenue was reported to be $531.15 million, increasing by 11.87% year-over-year, and beating estimates of $515.82 million.

SNBR STOCK CHART

  • United Airlines Holdings, Inc. (NASDAQ:UAL) provides air transportation services. In an effort to provide some investor optimism last quarter, United updated their ticket policy and permanently eliminated ticket change fees. We analyzed how traders reacted to this news here. United Airlines reported its fiscal second-quarter earnings after the market closed Wednesday.

UAL STOCK CHART

  • Washington Federal, Inc. (NASDAQ:WAFD) operates as the bank holding company that provides lending, depository, insurance, and other banking services. Washington Federal reported its third-quarter earnings after the market closed yesterday.

WAFD STOCK CHART


To cap off the week tomorrow, core retail sales and consumer sentiment data will be released, along with earnings from Ally Financial (ALLY) and Citizens Financial Group (CFG). Remember, all earnings and economic dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Published on Oct 14, 2020 at 3:26 PM
  • Quantitative Analysis

The shares of L Brands Inc (NYSE:LB) are up 1% at $32.25 this afternoon, earlier landing a price-target hike to $38 from $33 at B. Riley. And while the fashion retail stock is just cooling down from a nearly two-year high of $33.62 on Oct. 8, the security has gained an impressive 153.1% in the last six months. Better yet, this recent pullback has LB near a historically bullish trendline, which could help the equity surge even higher in the near future.

Specifically, L Brands stock just came within one standard deviation of its 40-day moving average, after spending the past several months soaring above the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, three similar signals have occurred during the past three years. Half of the time, LB enjoyed positive returns one month after each signal, averaging a roughly 4.8% gain. From its current perch, a move of similar magnitude would put the security just below the $34 -- back near a two-year peak.

LB 40 Day

A slim majority of analysts covering LB are already bullish, but there is still plenty of room for upgrades and price-target hikes going forward, which could propel the equity higher. Of the 17 in coverage, eight carry a tepid "hold" or worse. Plus, the 12-month consensus price target of $31.54 is an underwhelming 1.6% discount to current levels. 

For those wanting to take advantage of L Brands stock's next leg higher, options may be an intriguing play. The stock's Schaeffer's Volatility Index (SVI) of 68% sits higher than just 11% of readings in its annual range, suggesting short-term options are pricing in relatively low volatility expectations.

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