With so many major companies already having reported earnings, but with markets still hovering in bear territory, investors are wondering if this coming week will provide something more dramatic that could rescue equities from their downward slide and beat back the bears.
We believe renewed hopes that trade tensions between the US and China are de-escalating could be something that would provide a very positive catalyst for market direction in the days ahead, as the third-quarter earnings season winds down. US President Donald Trump on Thursday tweeted about a “long and very good conversation” with his counterpart in China, Xi Jinping, on trade. According to some reports, he has asked his team to draft a possible trade deal with China.
As well, a few earnings beats accompanied by some positive forward guidance could also help boost equities. Here are three stocks, all scheduled to report earnings, to keep an eye on this week.
1.Disney
Trading at $115.18, just a bit below 4% off its record high of $119.69, Walt Disney Company (NYSE:DIS) shares could get another boost on Thursday, November 8 when the House of Mouse reports Q4 2018 earnings after the market close.
Analysts are expecting revenue of $13.72 billion for the three months ending in September, a 7.4% year-over-year gain. This may not seem like a number strong enough to ignite investor interest, but it could be Disney's second strongest sales number in more than two years. Analysts are even more hopeful about the company's bottom line, with consensus expecting a 24% surge to $1.33 per share for the quarter.
Disney’s biggest revenue-generating unit, media and networks—which includes television and the ESPN sports platform—has been going through a rough patch. It has lost viewers and advertising dollars to internet disruptors such as Netflix (NASDAQ:NFLX).
Chief Executive Officer Bob Iger has been addressing these challenges head on. His efforts include some bold moves such as his plans for new online services and the recently concluded $52.4 billion deal to buy much of 21st Century Fox (NASDAQ:FOX).
2.CVS Health
CVS Health (NYSE:CVS) reports on Tuesday, November 6, before the market opens. This Q3 report occurs just after the company received conditional approval last month for its $68-billion merger with Aetna (NYSE:AET), one of the largest health care insurance and benefits companies in the industry.
Investors will be keen to find out what the plans are for the combined company as well as the closing date for the merger, all of which should come up when CVS company executives speak during the conference call.
The combination would create a healthcare giant, one that's involved in insurance, prescription drug benefits and drugstores across the US. By fusing all these businesses under one roof, CVS and Aetna are betting they’ll be better positioned to face changing consumer habits as well as the emergence of new rivals in the healthcare space.
For the third quarter, analysts expect earnings per share of $1.71, which would represent 12% growth year-over-year on revenue of $47.2 billion. Shares closed on Friday at $73.09, about mid-range between the stock's 52-week high and low.
3.Qualcomm
With smartphone demand softening, and the chip sector weakening overall, Qualcomm’s (NASDAQ:QCOM) Q4 2018 report, scheduled for this coming Wednesday, November 7 after the close, will be much scrutinized by investors.
Analyst consensus expects the San Diego, California-based semiconductor manufacturer to show an 11% slide in earnings per share from a year ago, to $0.82. Sales are expected to have declined 7% to $5.53 billion.
Qualcomm is in the middle of a legal dispute over licenses and royalty payments with global smartphone giants Apple (NASDAQ:AAPL) and China-based Huawei Technologies (SZ:002502). Last year, Apple stopped its Asian contractors from making royalty payments to Qualcomm, depriving the San Diego-based chipmaker of billions of dollars in revenue.