2 Stocks Making Huge Moves After Earnings

Campbell said its costs could rise as much as $4 million, should tariffs for Mexico go into effect

Digital Content Manager
Jun 5, 2019 at 2:05 PM
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The Dow continues its rally today, as weak jobs data boosts investors' expectations for a potential rate cut. Several earnings were on the roster today, too, including tech stock Pivotal Software Inc (NYSE:PVTL) and household soup name Campbell Soup Company (NYSE:CPB). Below, we'll take a look what's driving PVTL and CPB's post-earnings swings. 

PVTL Stock Spirals Thanks To Earnings "Train Wreck"

Cloud technology concern Pivotal Software has hit the bottom of the barrel today, after the firm cut its full-year subscription revenue outlook and raised its 2020 adjusted loss estimate. Pivotal did announce first-quarter earnings and revenue that beat analysts' expectations, but said that shoddy sales execution has damaged the company's performance. The shares have already plummeted to a new all-time low of $10.10 and are on pace for their worst day ever -- down 42.3% at $10.71, at last glance. 

A flurry of analysts' bear notes are already pelting PVTL. So far, five analysts have slashed their price targets, including Wedbush, which knocked its target price down to $15 from $26. The analyst handed out a downgrade to "neutral" from "outperform," calling the quarter a "train wreck," and projecting "dark days ahead" for Pivotal. Despite the drubbing, the consensus 12-month price target still sits at a lofty $18.82, almost double current levels. Plus, the majority of analysts following PVTL give the stock a "buy" or better rating, with no "sell" to be seen, leaving the door wide open for even more bear notes. 

Campbell Soup Stock Piping Hot on Full-Year Guidance 

Campbell Soup stock just hit a new nine-month high of $42 earlier, after the popular food name unveiled fiscal third-quarter earnings and revenue that beat analysts' expectations. The firm also raised its full-year profit forecast, citing strong snack sales, which has made up for Campbell's slowing demand for soups. CPB also commented on President Donald Trump's recent trade threats against Mexico, saying full-year costs could rise between $2 million and $4 million should the tariffs go into effect. 

The shares are pacing for their fourth consecutive win and best day since February, up 8.9% to trade at $41.51. This positive price action has options traders flocking to the stock, with 14,000 contracts across the tape so far, roughly five times the average intraday. Calls are slightly more popular than puts, with more than 8,000 calls traded, compared to around 6,600 puts. The January 2020 38-strike call is by far the most popular, with the majority of these contracts being sold. Elsewhere, new positions are possibly being purchased at the June 41 and 42 puts.


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