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Dow 30 Stock Roundup: Coca-Cola, Disney, Visa Beat on Earnings
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The Dow endured another volatile week as it bobbed and weaved around record highs. The index rose and fell in keeping with market sentiment regarding the actions of President Trump. Encouraging earnings results helped to boost stocks somewhat. However, expectations as well as actual data about oil reserves also had a major impact on oil prices and stocks and subsequently, the broader markets.
Last Week’s Performance
The Dow increased 0.9% last Friday, following President Donald Trump’s recent steps to reduce regulations related to the financial sector and an encouraging jobs report. Optimism over Trump’s financial de-regulation actions boosted bank stocks, which in turn led the Dow to register its best gains for the year.
Moreover, a record number of jobs were created last month, which also had a positive impact on investor sentiment. The U.S. added 227,000 jobs in January, which exceeded December’s reading of 157,000. Additionally, these are the best monthly job gains since September. Also, the blue-chip index rallied past the psychological level of 20,000 once again.
The Dow lost 0.1% last week as investors grappled over President Trump’s order to tighten immigration rules during the week. Trump’s approach on foreign trade and policies also dented investor sentiment, which in turn weighed on the Dow.
The DowThisWeek
The index decreased 0.1% on Monday following lack of clarity among investors over President Trump’s economic policies. Investor concerns over Trump’s recent actions on banning immigration from several countries continued to have a broad-based negative impact on key indexes. Additionally, oil prices declined after crude oversupply concerns weighed on investor sentiment.
The index increased 0.2% on Tuesday after encouraging earnings results led the benchmarks to close in positive territory. Gains in consumer staples and technology stocks had a positive impact on all the key U.S. indexes.
However, some of the day’s gains were curtailed after declines in oil prices weighed on the energy sector. Moreover, trade deficit reached its highest level in four years which also had a negative impact on investor sentiment. Also, lack of clarity over President Trump’s economic policies continued to weigh on markets.
The index declined 0.2% on Wednesday after gains from an oil prices rally were trimmed following a decline in financial stocks. Despite a higher-than-expected increase in crude inventories, oil prices made a rebound on the back of decline in gasoline inventories.
However, lack of clarity over President Trump’s economic policies including financial deregulation and tax reforms weighed on financial sector. Moreover, investors digested a mixed bag of earnings results.
The index increased 0.6% on Thursday after U.S. President Donald Trump said he will make some big announcements regarding his tax plans in the coming weeks. Trump’s latest announcements raised expectations of a low tax environment, which in turn had a positive impact on financial stocks. Additionally, energy shares gained yesterday following a decline in gasoline inventories and rising gasoline demand last week.
Components Moving the Index
The Coca-Cola Company (KO - Free Report) reported better-than-expected results for the fourth quarter of 2016. Fourth-quarter 2016 adjusted earnings of the company were 37 cents per share, which beat the Zacks Consensus Estimate of 36 cents by 2.8%. Earnings declined 2.6% year over year due to currency headwinds. The stock has a Zacks Rank #4 (Sell)
Net revenue declined 6% year over year to $9.40 billion due to currency headwinds and the negative impact of structural items. However, revenues surpassed the Zacks Consensus Estimate of $9.10 billion.
The Walt Disney Company (DIS - Free Report) reported first-quarter (F - Free Report) iscal 2017 earnings of $1.55 per share, beating the Zacks Consensus Estimate of $1.48 but declined 4.5% on account of tough year-over-year comparison. The prior-year period gained from the remarkable performance of the Studio and Consumer Products businesses powered by Star Wars, and to some extent, Frozen. Disney has a Zacks Rank #3 (Hold).
However, revenues declined 3% year over year to $14,784 million and missed the Zacks Consensus Estimate of $15,263 million. Decline in revenues were mostly due to dismal performance of Media Networks and Consumer Products & Interactive Media. (Read: Disney (DIS - Free Report) Tops Q1 Earnings, Sales Lag; ESPN Woes Linger)
Visa Inc. (V - Free Report) posted first-quarter fiscal 2017 (ended Dec 31, 2016) earnings per share of 86 cents per share, handily beating the Zacks Consensus Estimate of 78 cents. Also, the bottom line improved 7% year over year.
Net operating revenue of $4.5 billion surpassed the Zacks Consensus Estimate of $4.3 billion. Also, revenues climbed 25% year over year. This upside was primarily driven by the acquisition of Visa Europe and consistent growth in payments volume and processed transactions.
For fiscal 2017, Visa largely reaffirmed its guidance. Visa projects annual net revenue growth in a range of 16–18% with an adverse foreign currency impact of 2–2.5%. Adjusted earnings per share is expected to grow at mid-teens digit on normal dollar basis, including 2.5%–3% of negative foreign currency impact. The stock has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Boeing Company (BA - Free Report) has received an order for 39 wide-body airplanes from Singapore Airlines Ltd, as per media giants, Bloomberg and Reuters, leading commercial aircraft maker. According to Bloomberg, Singapore Airlines placed the order amid a battle with Chinese and Middle Eastern carriers. Value of the airplanes at current list prices comes to nearly $13.8 billion.
As per sources, Singapore Airlines intends to purchase 20 long-range 777-9 jets, the latest model of Zacks Rank #3 rated Boeing’s 777 with a seating capacity of 406. The carrier also intends to buy at least 19 787-10 jets, the longest Dreamliner model of Boeing. Boeing expects to start the deliveries of these jets by the end of Mar 2021. (Read: Boeing Wins Order for 39 Jets from Singapore Airlines)
Merck & Co., Inc.’s (MRK - Free Report) two supplemental Biologics License Applications (sBLA) for its anti-PD-1 therapy, Keytruda, have been accepted under priority review by the FDA. The priority review for both the applications by the FDA should translate into a response by Jun 14, 2017.
This time, Zacks Rank #3 rated Merck is looking to expand the label of Keytruda for the treatment of patients with locally advanced or metastatic urothelial cancer, a type of bladder cancer. It has filed separate applications for the first-line treatment of patients who are ineligible for cisplatin-containing therapy; and for second-line use in patients with disease progression on or after platinum-containing chemotherapy. (Read: Merck’s Keytruda Gets Priority Review for Bladder Cancer)
Performance of the Top 10 Dow Companies
The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has gained 1%.
Ticker
Last 5 Day’s Performance
6-Month Performance
MMM
+2.2%
-0.4%
GS
+4.6%
+48.9%
IBM
+1.5%
+9.3%
HD
+1.2%
+2.3%
BA
+0.4%
+24.2%
UNH
-0.1%
+12.8%
MCD
+0.9%
+4.8%
TRV
+0.3%
+1.1%
JNJ
+0.4%
-7.5%
AAPL
+3%
+22.6%
Next Week’s Outlook
The direction of stocks this week was largely dependent on the market’s view of President Trump’s actions and likely future policies. Oil price movement also had a significant role to play in determining the direction of stocks. Meanwhile, the extended earnings season will also continue to guide stocks.
However, several major economic releases are scheduled for release next week. This includes data on retail sales, industrial production, housing and inflation. If most of these releases are encouraging in nature, stocks could notch up steady gains next week.
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Dow 30 Stock Roundup: Coca-Cola, Disney, Visa Beat on Earnings
The Dow endured another volatile week as it bobbed and weaved around record highs. The index rose and fell in keeping with market sentiment regarding the actions of President Trump. Encouraging earnings results helped to boost stocks somewhat. However, expectations as well as actual data about oil reserves also had a major impact on oil prices and stocks and subsequently, the broader markets.
Last Week’s Performance
The Dow increased 0.9% last Friday, following President Donald Trump’s recent steps to reduce regulations related to the financial sector and an encouraging jobs report. Optimism over Trump’s financial de-regulation actions boosted bank stocks, which in turn led the Dow to register its best gains for the year.
Moreover, a record number of jobs were created last month, which also had a positive impact on investor sentiment. The U.S. added 227,000 jobs in January, which exceeded December’s reading of 157,000. Additionally, these are the best monthly job gains since September. Also, the blue-chip index rallied past the psychological level of 20,000 once again.
The Dow lost 0.1% last week as investors grappled over President Trump’s order to tighten immigration rules during the week. Trump’s approach on foreign trade and policies also dented investor sentiment, which in turn weighed on the Dow.
The Dow This Week
The index decreased 0.1% on Monday following lack of clarity among investors over President Trump’s economic policies. Investor concerns over Trump’s recent actions on banning immigration from several countries continued to have a broad-based negative impact on key indexes. Additionally, oil prices declined after crude oversupply concerns weighed on investor sentiment.
The index increased 0.2% on Tuesday after encouraging earnings results led the benchmarks to close in positive territory. Gains in consumer staples and technology stocks had a positive impact on all the key U.S. indexes.
However, some of the day’s gains were curtailed after declines in oil prices weighed on the energy sector. Moreover, trade deficit reached its highest level in four years which also had a negative impact on investor sentiment. Also, lack of clarity over President Trump’s economic policies continued to weigh on markets.
The index declined 0.2% on Wednesday after gains from an oil prices rally were trimmed following a decline in financial stocks. Despite a higher-than-expected increase in crude inventories, oil prices made a rebound on the back of decline in gasoline inventories.
However, lack of clarity over President Trump’s economic policies including financial deregulation and tax reforms weighed on financial sector. Moreover, investors digested a mixed bag of earnings results.
The index increased 0.6% on Thursday after U.S. President Donald Trump said he will make some big announcements regarding his tax plans in the coming weeks. Trump’s latest announcements raised expectations of a low tax environment, which in turn had a positive impact on financial stocks. Additionally, energy shares gained yesterday following a decline in gasoline inventories and rising gasoline demand last week.
Components Moving the Index
The Coca-Cola Company (KO - Free Report) reported better-than-expected results for the fourth quarter of 2016. Fourth-quarter 2016 adjusted earnings of the company were 37 cents per share, which beat the Zacks Consensus Estimate of 36 cents by 2.8%. Earnings declined 2.6% year over year due to currency headwinds. The stock has a Zacks Rank #4 (Sell)
Net revenue declined 6% year over year to $9.40 billion due to currency headwinds and the negative impact of structural items. However, revenues surpassed the Zacks Consensus Estimate of $9.10 billion.
Organic revenues are expected to rise 3% in 2017. Excluding currency headwinds and structural changes, PBT is expected to increase 7–8%. (Read: Coca-Cola Tops Q4 Earnings, Revenues; Issues '17 View)
The Walt Disney Company (DIS - Free Report) reported first-quarter (F - Free Report) iscal 2017 earnings of $1.55 per share, beating the Zacks Consensus Estimate of $1.48 but declined 4.5% on account of tough year-over-year comparison. The prior-year period gained from the remarkable performance of the Studio and Consumer Products businesses powered by Star Wars, and to some extent, Frozen. Disney has a Zacks Rank #3 (Hold).
However, revenues declined 3% year over year to $14,784 million and missed the Zacks Consensus Estimate of $15,263 million. Decline in revenues were mostly due to dismal performance of Media Networks and Consumer Products & Interactive Media. (Read: Disney (DIS - Free Report) Tops Q1 Earnings, Sales Lag; ESPN Woes Linger)
Visa Inc. (V - Free Report) posted first-quarter fiscal 2017 (ended Dec 31, 2016) earnings per share of 86 cents per share, handily beating the Zacks Consensus Estimate of 78 cents. Also, the bottom line improved 7% year over year.
Net operating revenue of $4.5 billion surpassed the Zacks Consensus Estimate of $4.3 billion. Also, revenues climbed 25% year over year. This upside was primarily driven by the acquisition of Visa Europe and consistent growth in payments volume and processed transactions.
For fiscal 2017, Visa largely reaffirmed its guidance. Visa projects annual net revenue growth in a range of 16–18% with an adverse foreign currency impact of 2–2.5%. Adjusted earnings per share is expected to grow at mid-teens digit on normal dollar basis, including 2.5%–3% of negative foreign currency impact. The stock has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Boeing Company (BA - Free Report) has received an order for 39 wide-body airplanes from Singapore Airlines Ltd, as per media giants, Bloomberg and Reuters, leading commercial aircraft maker. According to Bloomberg, Singapore Airlines placed the order amid a battle with Chinese and Middle Eastern carriers. Value of the airplanes at current list prices comes to nearly $13.8 billion.
As per sources, Singapore Airlines intends to purchase 20 long-range 777-9 jets, the latest model of Zacks Rank #3 rated Boeing’s 777 with a seating capacity of 406. The carrier also intends to buy at least 19 787-10 jets, the longest Dreamliner model of Boeing. Boeing expects to start the deliveries of these jets by the end of Mar 2021. (Read: Boeing Wins Order for 39 Jets from Singapore Airlines)
Merck & Co., Inc.’s (MRK - Free Report) two supplemental Biologics License Applications (sBLA) for its anti-PD-1 therapy, Keytruda, have been accepted under priority review by the FDA. The priority review for both the applications by the FDA should translate into a response by Jun 14, 2017.
This time, Zacks Rank #3 rated Merck is looking to expand the label of Keytruda for the treatment of patients with locally advanced or metastatic urothelial cancer, a type of bladder cancer. It has filed separate applications for the first-line treatment of patients who are ineligible for cisplatin-containing therapy; and for second-line use in patients with disease progression on or after platinum-containing chemotherapy. (Read: Merck’s Keytruda Gets Priority Review for Bladder Cancer)
Performance of the Top 10 Dow Companies
The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has gained 1%.
Ticker
Last 5 Day’s Performance
6-Month Performance
MMM
+2.2%
-0.4%
GS
+4.6%
+48.9%
IBM
+1.5%
+9.3%
HD
+1.2%
+2.3%
BA
+0.4%
+24.2%
UNH
-0.1%
+12.8%
MCD
+0.9%
+4.8%
TRV
+0.3%
+1.1%
JNJ
+0.4%
-7.5%
AAPL
+3%
+22.6%
Next Week’s Outlook
The direction of stocks this week was largely dependent on the market’s view of President Trump’s actions and likely future policies. Oil price movement also had a significant role to play in determining the direction of stocks. Meanwhile, the extended earnings season will also continue to guide stocks.
However, several major economic releases are scheduled for release next week. This includes data on retail sales, industrial production, housing and inflation. If most of these releases are encouraging in nature, stocks could notch up steady gains next week.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>