- Microsoft + Tesla earnings, Q4 GDP data, PCE inflation to watch.
- Visa stock is a buy amid strong earnings and sales growth.
- Poor earnings and weak outlook will cause Intel stock to underperform.
Wall Street stocks rose on Friday, but the major averages all but fell by the end of the week on recession fears fueled by the latest batch of economic data.
Blue chip stocks and benchmarks are down 2.7% and 0.7% respectively this week, while tech stocks are up 0.5%.
Expect reports from Microsoft (NASDAQ:), Tesla (NASDAQ:), IBM (NYSE:), and Texas Instruments (NASDAQ:) to make the next week even more eventful as the fourth-quarter earnings season shifts into high gear. Expect to have a full week. Other big names on the revenue agenda include Boeing (NYSE:), Chevron (NYSE:), 3M (NYSE:), Johnson & Johnson (NYSE:), AT&T (NYSE:) and Verizon (NYSE:). It contains. ), Mastercard (NYSE:), Southwest Airlines (NYSE:), General Electric (NYSE:), and Lockheed Martin (NYSE:).
What’s more, Thursday also has an important deadline, providing more clues as to whether the economy is headed for recession. The (PCE) price index (a measure of inflation recommended by the Federal Reserve) will be released on Friday morning.
Regardless of which way the market goes, here are the stocks that are likely to be in demand, as well as those that could fall further.
However, our timeframe is However for next week.
Stocks to buy: Visa
Visa (NYSE:) shares are expected to continue their rally next week after closing at their highest level in more than nine months on Friday. That’s because the credit card giant is projected to deliver strong profit and sales growth in its latest financial report. result.
Traders are pricing in an implied move of about 4.2% in either direction for V shares following the expected earnings update after the U.S. market closed on Thursday, Jan. 26, according to the Options Market. is.
In my view, the global recession is not expected to have a material impact on Visa’s quarterly results. surely, Investing Pro A survey of analyst earnings revisions showed growing optimism ahead of the report, with analysts downping their EPS estimate by 10 over the past 90 days despite a challenging macroeconomic backdrop. I am doubling it.
According to consensus estimates, the payment processing company should report earnings per share of $2.01 in the first quarter. investment.com, an improvement of 11% from EPS of $1.81 in the year-ago quarter. If true, it would be the seventh consecutive quarter of earnings acceleration and the highest level since Q4 2014.
Meanwhile, revenue is expected to grow 9.1% year-on-year to $7.7 billion. This reflects the strong performance of the payment network as a whole, as it benefits from a solid combination of increased spend and transaction growth driven by rising credit card usage in the country. and internationally.
Demonstrating the strength and resilience of its underlying business, Visa has met or exceeded Wall Street top-line expectations in every quarter going back at least to Q2 2013.
As such, the company, one of the 30 components of the Dow Jones Industrial Average, is once again on the cusp of positive earnings and sales growth, thanks to strong fundamentals and continued positive trends heading into 2023. expected to predict
V shares closed Friday’s session at $224.31, the highest since April 5, 2022. Stocks in the Foster City, Calif.-based company have been hot in recent weeks, rallying nearly 30% since reaching mid-October. 52-week low of $174.60.
Visa shares are up 8% so far in 2023. The stock is much better than the broader market last year, down just 4% in 2022. At current levels, Visa’s market capitalization stands at $462 billion, making him the seventh largest. A valuable company in the world.
Stock to dump: Intel
I think Intel (NASDAQ:) stock could underperform over the next week and return to its recent lows again. tough economic environment.
Consensus calls for the Santa Clara, Calif.-based chipmaker to report fourth-quarter earnings per share of $0.20, down more than 80% from an EPS of $1.09 in the year-ago quarter. If confirmed, Intel’s quarterly earnings would be the lowest in at least a decade, highlighting some of the challenges the company faces today.
Meanwhile, revenue is forecast to fall 25.7% year-over-year to $14.5 billion, the lowest since the second quarter of 2016. It is affected by the slump and the decrease in PC demand. from consumers.
Unsurprisingly, earnings forecasts were revised down a whopping 30 times in the 90 days before the earnings release. investment professional.
Based on options market movements, traders expect the INTC stock to move significantly following the outcome, with a potential move of around 8% in either direction.
Looking ahead, I think Intel’s future guidance suggests it’s going to be another difficult year, as we become increasingly concerned about the future prospects of chipmakers.
Once widely regarded as the undisputed leader in the computer processor industry, in recent years Intel has steadily gained market share over rivals such as Advanced Micro Devices (NASDAQ:), NVIDIA (NASDAQ:) and Taiwan Semi (NYSE:). is robbed by Moreover, as Big Tech companies such as Apple (NASDAQ:), Microsoft, and Amazon (NASDAQ:) increasingly choose to develop their own chips and microprocessors, their businesses are also taking a hit.
After falling to a bear market of $24.59 in mid-October, INTC shares closed at $29.22 on Friday. At current valuations, the unpopular tech company’s market cap is $120.6 billion.
The stock, which kicked off the new year with the tech stock Nasdaq, is up 10.5% in the first few weeks of 2023, following a full-year decline of 48.7% in 2022. Despite the recent upturn, INTC’s share price remains around 58% off its all-time high of $69.29 in January 2020.
Disclosure: At the time of writing, I Long visa and short intel. We also maintain short positions in the S&P 500 and the ProShares Short S&P500 ETF (NYSE:). ProShares Short QQQ ETF (NYSE:). I regularly recalibrate my portfolio of individual stocks and ETFs based on my ongoing risk assessment of both the macroeconomic environment and the financial condition of the company. The views expressed in this article are solely those of the author and should not be construed as investment advice.