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This week, investors focus on the upcoming inflation number. However, once that is in the rearview mirror, the focus will turn back to earnings season – which we are in the thick of currently. Below are the earnings reports to watch for the week of January 16th:
Tuesday, January 17th
New Oriental Education (EDU - Free Report) is a stock that has illustrated Chinese market sentiment to perfection. In March of 2021, the stock neared $200 a share. Fast forward one year, and shares collapsed below $9 per share.
Image Source: Zacks Investment Research
Pictured: EDU had a nasty 2022 but shares are on the mend.
The Chinese provider of language education and prep courses was adversely impacted by China’s slowing economy and stringent Covid 19 lockdown policy. Now, the Chinese government is once again unlocking their markets by lifting the lockdowns and providing stimulus to an ailing economy. Consensus analyst estimates suggest that as China’s economy normalizes, so will New Oriental Education’s earnings. If this is the case, the stock may just be starting its rebound.
Image Source: Zacks Investment Research
Pictured: Estimate Revisions are rising for EDU and other Chinese stocks.
Interactive Brokers (IBKR - Free Report) . A rising interest rate environment (like the one we’re in now) is often a headwind for most stocks. However, Interactive Brokers, a multi-asset class online broker that caters to sophisticated traders, is one exception. On its October 17th earnings call, the company announced an earnings surprise. The catalyst? IBKR saw its revenue from margin loans to customers spike dramatically as rates rose.
Image Source: Zacks Investment Research
Pictured: IBKR hopes to keep its earnings momentum up as interest rates rise.
Interactive Brokers has a healthy Expected EPS 3-5 Year Growth Rate of 22.47% and holds the best possible Zack’s #1 ranking, suggesting that last quarter’s results may not be a one-and-done. In an impressive show of relative price strength, the stock sits less than 5% off its all-time high while the major U.S. indexes remain well off their highs.
Image Source: Zacks Investment Research
Pictured: IBKR and other stock brokers are outperforming the market in recent months.
Goldman Sachs (GS - Free Report) and Morgan Stanley(MS - Free Report) are leading investment management and banking companies. Like most stocks, banks performed poorly last year. Goldman Sachs and Morgan Stanley hold mediocre Zack’s Rankings of 3. That said, a surprise to the upside may help these stocks turn around. Valuations are getting more attractive. For example, GS has a P/E ratio of just 9.52, which compares favorably to the S&P 500 Indexes 17.8.
Image Source: Zacks Investment Research
Pictured: Banks like GS are starting to get attractive on a valuation basis. We will get more info next week when they report.
Another positive development in the sector is the technical picture. GS, MS, and JP Morgan (JPM - Free Report) are all experiencing “golden crosses”. A golden cross occurs when the 50-day moving average crosses above the 200-day moving average. Golden crosses favor bulls.
Image Source: Zacks Investment Research
Pictured: GS 50-day has crossed over its 200-day moving average to signal a golden cross.
United Airlines (UAL - Free Report) , the holding company for United Airlines and Continental Airlines, has been on a tear for the past two weeks. In the upcoming quarter, United is expected to post earnings of $2.09 per share up a strong 230% versus last year. More importantly, Zack’s Consensus Estimates have been on the rise and have changed by 27.4% over the past 30 days. Zacks Research suggests that rising consensus estimates is one of the key ingredients to finding winning stocks. UAL currently holds an overall Zacks Ranking of 2.
Image Source: Zacks Investment Research
Pictured: UAL is estimated to have massive growth versus last year. The stock rose yesterday even as most domestic flights were cancelled.
Wednesday, airlines like Delta (DAL - Free Report) and United rose even as a temporary grounding by the Federal Aviation Administration (FAA) grounded all flights. Delta is set to report earnings Friday. With airlines like UAL up nearly 25% in the past two weeks into earnings, investors should be sizing up whether the risk-reward is worth it or if it is better to watch from the sidelines. Either way, the industry seems to be turning the corner.
Wednesday, January 18th
Charles Schwab (SCHW - Free Report) is a securities brokerage, loan holding company, and asset management firm. Like its industry group peer Interactive Brokers, the stock has outperformed the general market, although it maintains a mid-tier Zack’s Ranking of 3.
Alcoa (AA - Free Report) is the leading aluminum miner in the world. Earnings and revenues are set to slow for a second straight quarter as consensus EPS estimates for the quarter have been revised lower by 33.33% over the past 30 days. A key technical zone to watch will be the 200-day moving average. The stock is trying to clear the technical level for the first time since early 2022.
Image Source: Zacks Investment Research
Pictured: Alcoa is trying to pop back above its 200-day moving average.
Thursday, January 19th
Netflix (NFLX - Free Report) is the streaming spaces pioneer and leader – boasting more than 220.67 million subscribers worldwide. Last year, even though the company beat earnings expectations, shares stumbled as subscriber growth expectations slowed. Shares of Netflix have stormed back since making lows last May. The stock recently triggered a golden cross.
Image Source: Zacks Investment Research
Pictured: Netflix will be a big earnings report for tech. Last year shares weighed down the Nasdaq.
Proctor and Gamble (PG - Free Report) is a massive consumer products company. PG is the perfect stock for those who want to avoid drama and sleep at night. The stock has a beta of just 0.42 and pays a healthy dividend of 2.41%.
American Airlines (AAL - Free Report) will cap off earnings for the major airlines next week. AAL has seen strong buying in recent days. The stock has been up for eight straight days, of which six were on above-average volume. While it is never prudent to chase price moves, investors should keep their eye on the industry as a potential turnaround play in 2023.
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Earnings Preview for the Week of January 16th
This week, investors focus on the upcoming inflation number. However, once that is in the rearview mirror, the focus will turn back to earnings season – which we are in the thick of currently. Below are the earnings reports to watch for the week of January 16th:
Tuesday, January 17th
New Oriental Education (EDU - Free Report) is a stock that has illustrated Chinese market sentiment to perfection. In March of 2021, the stock neared $200 a share. Fast forward one year, and shares collapsed below $9 per share.
Image Source: Zacks Investment Research
Pictured: EDU had a nasty 2022 but shares are on the mend.
The Chinese provider of language education and prep courses was adversely impacted by China’s slowing economy and stringent Covid 19 lockdown policy. Now, the Chinese government is once again unlocking their markets by lifting the lockdowns and providing stimulus to an ailing economy. Consensus analyst estimates suggest that as China’s economy normalizes, so will New Oriental Education’s earnings. If this is the case, the stock may just be starting its rebound.
Image Source: Zacks Investment Research
Pictured: Estimate Revisions are rising for EDU and other Chinese stocks.
Interactive Brokers (IBKR - Free Report) . A rising interest rate environment (like the one we’re in now) is often a headwind for most stocks. However, Interactive Brokers, a multi-asset class online broker that caters to sophisticated traders, is one exception. On its October 17th earnings call, the company announced an earnings surprise. The catalyst? IBKR saw its revenue from margin loans to customers spike dramatically as rates rose.
Image Source: Zacks Investment Research
Pictured: IBKR hopes to keep its earnings momentum up as interest rates rise.
Interactive Brokers has a healthy Expected EPS 3-5 Year Growth Rate of 22.47% and holds the best possible Zack’s #1 ranking, suggesting that last quarter’s results may not be a one-and-done. In an impressive show of relative price strength, the stock sits less than 5% off its all-time high while the major U.S. indexes remain well off their highs.
Image Source: Zacks Investment Research
Pictured: IBKR and other stock brokers are outperforming the market in recent months.
Goldman Sachs (GS - Free Report) and Morgan Stanley (MS - Free Report) are leading investment management and banking companies. Like most stocks, banks performed poorly last year. Goldman Sachs and Morgan Stanley hold mediocre Zack’s Rankings of 3. That said, a surprise to the upside may help these stocks turn around. Valuations are getting more attractive. For example, GS has a P/E ratio of just 9.52, which compares favorably to the S&P 500 Indexes 17.8.
Image Source: Zacks Investment Research
Pictured: Banks like GS are starting to get attractive on a valuation basis. We will get more info next week when they report.
Another positive development in the sector is the technical picture. GS, MS, and JP Morgan (JPM - Free Report) are all experiencing “golden crosses”. A golden cross occurs when the 50-day moving average crosses above the 200-day moving average. Golden crosses favor bulls.
Image Source: Zacks Investment Research
Pictured: GS 50-day has crossed over its 200-day moving average to signal a golden cross.
United Airlines (UAL - Free Report) , the holding company for United Airlines and Continental Airlines, has been on a tear for the past two weeks. In the upcoming quarter, United is expected to post earnings of $2.09 per share up a strong 230% versus last year. More importantly, Zack’s Consensus Estimates have been on the rise and have changed by 27.4% over the past 30 days. Zacks Research suggests that rising consensus estimates is one of the key ingredients to finding winning stocks. UAL currently holds an overall Zacks Ranking of 2.
Image Source: Zacks Investment Research
Pictured: UAL is estimated to have massive growth versus last year. The stock rose yesterday even as most domestic flights were cancelled.
Wednesday, airlines like Delta (DAL - Free Report) and United rose even as a temporary grounding by the Federal Aviation Administration (FAA) grounded all flights. Delta is set to report earnings Friday. With airlines like UAL up nearly 25% in the past two weeks into earnings, investors should be sizing up whether the risk-reward is worth it or if it is better to watch from the sidelines. Either way, the industry seems to be turning the corner.
Wednesday, January 18th
Charles Schwab (SCHW - Free Report) is a securities brokerage, loan holding company, and asset management firm. Like its industry group peer Interactive Brokers, the stock has outperformed the general market, although it maintains a mid-tier Zack’s Ranking of 3.
Alcoa (AA - Free Report) is the leading aluminum miner in the world. Earnings and revenues are set to slow for a second straight quarter as consensus EPS estimates for the quarter have been revised lower by 33.33% over the past 30 days. A key technical zone to watch will be the 200-day moving average. The stock is trying to clear the technical level for the first time since early 2022.
Image Source: Zacks Investment Research
Pictured: Alcoa is trying to pop back above its 200-day moving average.
Thursday, January 19th
Netflix (NFLX - Free Report) is the streaming spaces pioneer and leader – boasting more than 220.67 million subscribers worldwide. Last year, even though the company beat earnings expectations, shares stumbled as subscriber growth expectations slowed. Shares of Netflix have stormed back since making lows last May. The stock recently triggered a golden cross.
Image Source: Zacks Investment Research
Pictured: Netflix will be a big earnings report for tech. Last year shares weighed down the Nasdaq.
Proctor and Gamble (PG - Free Report) is a massive consumer products company. PG is the perfect stock for those who want to avoid drama and sleep at night. The stock has a beta of just 0.42 and pays a healthy dividend of 2.41%.
American Airlines (AAL - Free Report) will cap off earnings for the major airlines next week. AAL has seen strong buying in recent days. The stock has been up for eight straight days, of which six were on above-average volume. While it is never prudent to chase price moves, investors should keep their eye on the industry as a potential turnaround play in 2023.