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Thus far, earnings season has been a pleasant surprise on Wall Street. Earnings reactions have been strong, and stocks like United Airlines (UAL - Free Report) provided impressive guidance moving forward. However, later this week, Wall Street awaits some of the biggest names on the street to report first-quarter results. Today we will look at 3 key earnings reports to monitor this week:
Microsoft Corp (MSFT - Free Report) is the largest report of the week and will move the tech sector and the entire U.S. market when it reports Q1 EPS Tuesday night. Though the stock has corrected in line with the tech sector in general, Microsoft’s valuation is the most attractive it has been in years. The current P/E of 25.89x matches the P/E ratio the software juggernaut saw at the lows of the pandemic correction in early 2020.
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An attractive valuation is not the only potential catalyst the stock has moving forward. Earlier this morning, the company announced it will invest $10 billion in OpenAI in the next ten years. OpenAI is the creator behind the wildly popular ChatGPT Artificial Intelligence (AI) service. Over the weekend, plans to transition the service into a “freemium” were announced. Power users can pay $42 per month to avoid delays and reap other premium ChatGPT benefits.
Sentiment in housing remains poor as mortgage rates have doubled in recent months and home prices have begun to cool. However, the recent action in homebuilders suggests that something else may be happening beneath the surface. Perhaps supply is drying up, or housing is not as weak as initially anticipated by investors. Either way, housing stocks are at the top of the list for contrarian-minded speculators. Texas-based D.R. Horton (DHI - Free Report) is one of the leading homebuilders nationwide. Like MSFT, DHI is becoming attractive on a valuation basis. Its P/E of 5.71x is lower than its valuation at the COVID-19 lows. DHI is expected to report earnings Tuesday.
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Halliburton Co (HAL - Free Report) and stocks of the same feather have been the undisputed market leaders over the past few years. Last quarter HAL reported stellar earnings growth of 114% on revenue of 39%. The stock holds a strong Zack’s Ranking of 2. While investors expect strong EPS, the critical factor to watch is how the stock reacts to those earnings. Is the strong earnings performance baked into shares already, or is there more gas in the tank? Earnings are due Tuesday for Halliburton. Industry group peer Chevron (CVX - Free Report) also reports earnings later in the week on Friday.
Image Source: Zacks Investment Research
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3 Key EPS Reports to Watch this Week
Thus far, earnings season has been a pleasant surprise on Wall Street. Earnings reactions have been strong, and stocks like United Airlines (UAL - Free Report) provided impressive guidance moving forward. However, later this week, Wall Street awaits some of the biggest names on the street to report first-quarter results. Today we will look at 3 key earnings reports to monitor this week:
Microsoft Corp (MSFT - Free Report) is the largest report of the week and will move the tech sector and the entire U.S. market when it reports Q1 EPS Tuesday night. Though the stock has corrected in line with the tech sector in general, Microsoft’s valuation is the most attractive it has been in years. The current P/E of 25.89x matches the P/E ratio the software juggernaut saw at the lows of the pandemic correction in early 2020.
Image Source: Zacks Investment Research
An attractive valuation is not the only potential catalyst the stock has moving forward. Earlier this morning, the company announced it will invest $10 billion in OpenAI in the next ten years. OpenAI is the creator behind the wildly popular ChatGPT Artificial Intelligence (AI) service. Over the weekend, plans to transition the service into a “freemium” were announced. Power users can pay $42 per month to avoid delays and reap other premium ChatGPT benefits.
Sentiment in housing remains poor as mortgage rates have doubled in recent months and home prices have begun to cool. However, the recent action in homebuilders suggests that something else may be happening beneath the surface. Perhaps supply is drying up, or housing is not as weak as initially anticipated by investors. Either way, housing stocks are at the top of the list for contrarian-minded speculators. Texas-based D.R. Horton (DHI - Free Report) is one of the leading homebuilders nationwide. Like MSFT, DHI is becoming attractive on a valuation basis. Its P/E of 5.71x is lower than its valuation at the COVID-19 lows. DHI is expected to report earnings Tuesday.
Image Source: Zacks Investment Research
Halliburton Co (HAL - Free Report) and stocks of the same feather have been the undisputed market leaders over the past few years. Last quarter HAL reported stellar earnings growth of 114% on revenue of 39%. The stock holds a strong Zack’s Ranking of 2. While investors expect strong EPS, the critical factor to watch is how the stock reacts to those earnings. Is the strong earnings performance baked into shares already, or is there more gas in the tank? Earnings are due Tuesday for Halliburton. Industry group peer Chevron (CVX - Free Report) also reports earnings later in the week on Friday.
Image Source: Zacks Investment Research