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6 More Monster Predictions for Earnings The Week of July 23
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NXPI
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There are plenty of other companies set to report results the week of July 23, then just the six we highlighted yesterday. So here is a list of 6 more big names set to report.
Biogen
Tuesday morning we get Biogen. Biogen stocks rocketed higher after the release of some positive data for its Alzheimer drug in development with Eisai.
The options for expiration on August 17 are pricing in a rise or fall in the stock of about 10 percent from the $360 strike price. It places the stock in a trading range between $316 and $395. The bets the stock will rise outnumber the bets the stock will fall by about 20 to 1 with 2,100 open calls contracts. It isn’t a cheap wager either at nearly $3.6 million in value.
Earnings are expected to fall by about 1 percent for the quarter versus a year ago to $5.09, while revenue is expected to rise about 5 percent to $3.25 billion. But these earnings have been cut substantially since April dropping from $6.34 per share in April.
The technical chart looks like the stock may continue to work higher, but to be honest that big gap makes me nervous because we know how stocks like to fill gaps.
I think momentum is going in Biogen’s favor, along with the bullish options betting. Earnings also appear to be watered down enough for a beat on the bottom line. So Biogen probably works higher following results, maybe even towards that magical $400 price.
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Boeing
Boeing goes Wednesday morning, and this one has in the middle of the trade wars. The technical chart has turned bullish with the formation of what appears to be a cup n’ handle. It makes me think shares can work higher to around $372.
The options for expiration on August 17 imply the stock will rise or fall by about of about 6.5 percent from the $350 strike price. The number of puts and calls favors the puts, with 2300 open call to 3200 open puts.
Earnings are expected to be strong, rising by over 29 percent to $3.30 per share, on revenue growth of about 5.5 percent to $24 billion. But earnings estimates have been taken down from roughly 3.45 per share in the middle of June, while revenue estimates have increased from $23.83 billion. An interesting trend, analysts appear to be factoring in higher cost.
It should set Boeing up for a beat on the bottom line, but a potential miss on the revenue side of things due to the rising estimates. But margin compression may be something to watch out for. I like the chart in Boeing a lot, and that is swaying my opinion probably more than it should, but with that said I see Boeing rising back towards its highs after results.
Qualcomm
Qualcomm will be a big one Wednesday after the close. We will find out the fate of the NXPI deal. Qualcomm needs this deal. I do not care what the company may or may not make it seem. Their whole licensing business model is under assault with the pending lawsuit against Apple, and revenue for Qualcomm has been steadily declining over the years. NXPI makes Qualcomm an instant powerhouse in automotive chips.
Qualcomm’s earnings are expected to drop by nearly 15 percent versus last year to $.71 per share. Revenue is expected to decline by 2 percent to $5.2 billion.
The options set to expire on August 17 imply the stock rises or fall by about 8 percent, placing the stock in a trading range between $55.40 and $65.60. The calls outweigh the puts, with 22,000 open calls to 13,000 open puts.
The technical chart is starting to look quite bullish on what appears to be a cup and handle forming, and that suggests a rise to about $62.25, and then potentially $69.00
To be honest, my gut keeps telling me this NXPI deal gets done, maybe it is because I own NXPI. But part of me feels like the deal will be approved and the Chinese regulators are just sitting on waiting until the last minute to put out the word. It would seem that ZTE is a done deal with the US government and I think if the NXPI deal is not signed off, the trade tension take a turn for the worse. I believe Trump worked the ZTE deal to get Qualcomm done.
For that reason alone Qualcomm should rise following results. How about that -two big predictions for the price of one.
McDonald’s
McDonald’ss reports Thursday morning, and I think this company’s story is one of the biggest jokes around, to be honest. The company revenue is continually shrinking yet shares have skyrocketed higher on earnings growth, from cost cuts and buybacks. Let’s see how good they do this quarter now that the dollar has strengthened. They got a huge boosted last quarter due to the weak dollar helping them to beat on both the top and the bottom. That is all I’m going to say about that.
Intel
Intel reports on Thursday afternoon, and analysts are looking for earnings growth of nearly 35 percent to $0.97, and revenue to climb by 13.5 percent to $16.8 billion. But remember this company already pre-released on the news of the CEO change.
The chart for Intel looks bullish to me, with solid support at $50.50 and I think it rises back to about $56.
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The options are suggesting the stock rise or fall about 6.5 percent from the $52.50. The calls outnumber the puts with roughly 13,200 open calls to approximately 10,300 open puts, which is relatively even.
But the sudden resignation of the CEO has hurt what should otherwise be a healthy stock. If the company can place some confidence in investors during the conference call, perhaps things can turn for the better.
The stock looks cheap at these levels and likely has room to rise from here, maybe $56 or so.
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Here are some of the better video’s this year.
Netflix Is Not Broken, Plus S&P May Rise To 3,000 Sooner Than You Think
Why It Is Time To Dump Starbucks, Plus A Look At ACAD
That is going to be it for now. Enjoy the rest of your weekend and good luck this week.
-Mike
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Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.Â
#earnings #july23 #boeing #intel #mcdonalds #biogen #qualcomm #nxpi
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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