Earnings season is upon us and you can bet that it is going to spur some big swings in the market. While the Fed was Wall Street’s obsession in 2013, I expect corporate profits to take center stage in 2014. After a five-quarter earnings drought for the S&P 500, growth finally materialized in the third quarter, and earnings are expected to significantly improve from the fourth quarter and then again in every single quarter in 2014. With the U.S. dollar near a one-year low against a broad basket of 15 major currencies, many multinational companies are benefitting from a “currency tailwind.”
So I expect the fourth-quarter earnings season to be even more eventful than the last. To prepare for this, let’s preview some of the biggest earnings announcements coming at us over the next few trading days. I’ll provide what the analyst community’s expectations are for each stock plus my take on whether the upcoming earnings announcement is a buying opportunity.
The Good
|
Ticker |
Company Name | Earnings Date | Estimated Sales Growth | Estimated Earnings Growth | Recommendation |
| AXP | American Express Co. | 16-Jan | 5.0% | 14.7% | Buy |
| BBBY | Bed Bath & Beyond Inc. | 8-Jan | 6.8% | 11.7% | Buy |
| SCHW | Charles Schwab Corp. | 13-Jan | 14.4% | 40.0% | Buy |
| SVU | SUPERVALU Inc. | 9-Jan | -48.8% | 333.3% | Buy |
| UNH | UnitedHealth Group Inc. | 16-Jan | 12.4% | 1.3% | Buy |
| WEN | The Wendy’s Co. | 13-Jan | -2.7% | -33.3% | Buy |
| WFC | Wells Fargo & Co. | 14-Jan | -5.9% | 6.5% | Buy |
The Bad
|
Ticker |
Company Name | Earnings Date | Estimated Sales Growth | Estimated Earnings Growth | Recommendation |
| BAC | Bank of America Corp. | 15-Jan | -1.7% | 800.0% | Hold |
| BK | Bank of New York Melon Corp. | 17-Jan | 2.3% | 3.8% | Hold |
| COF | Capital One Financial Corp. | 16-Jan | -2.8% | 9.2% | Hold |
| CSX | CSX Corp. | 15-Jan | 1.7% | -2.3% | Hold |
| FDO | Family Dollar Stores Inc. | 9-Jan | 3.4% | 0.0% | Hold |
| GE | General Electric Co. | 17-Jan | 2.3% | 20.5% | Hold |
| GS | Goldman Sachs Group Inc. | 16-Jan | -17.4% | -26.1% | Hold |
| INTC | Intel Corp. | 16-Jan | 1.8% | 8.3% | Hold |
| JPM | JPMorgan Chase & Co. | 14-Jan | -2.2% | -4.3% | Hold |
| MON | Monsanto Co. | 8-Jan | 4.5% | 3.2% | Hold |
| MS | Morgan Stanley | 17-Jan | 7.5% | 4.4% | Hold |
| TXI | Texas Industries Inc. | 8-Jan | 31.9% | 33.3% | Hold |
The Ugly
|
Ticker |
Company Name | Earnings Date | Estimated Sales Growth | Estimated Earnings Growth | Recommendation |
| AA | Aloca Inc. | 9-Jan | -8.5% | 0.0% | Sell |
| C | Citigroup Inc. | 16-Jan | -1.1% | 49.3% | Sell |
| FAST | Fastenal Co. | 13-Jan | 8.4% | 6.1% | Strong Sell |
| KMI | Kinder Morgan Inc. | 15-Jan | 23.8% | 2.9% | Sell |
| RT | Ruby Tuesday Inc. | 8-Jan | -11.1% | -300.0% | Strong Sell |
| STI | SunTrust Banks Inc. | 17-Jan | -11.2% | 6.2% | Sell |
Sincerely,
Louis Navellier