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Stock market: the earnings of Apple, GE, GM, and more
2019-11-11 • Updated
US companies continue reporting their financial results for Q1. Their stocks will likely make big moves ahead and after the earnings announcements. This week there will be 5 important earnings reports on Tuesday, April 30. You can trade these stocks with FBS (learn more).
Monday, April 29
EPS forecast: $10.48
Revenue forecast: $10.32B
The parent company of search-engine giant Google will report its results for the first 3 months of 2019 after the market close on Monday. Alphabet's Q1 revenue is projected to jump 20.6% y/y. Notice that its results surpassed expectations all 4 times last year.
Some risks come from Google’s profit margins. Operating margin fell to about 21% in the December 2018 quarter, down from 26.5% in the first quarter of 2017. Negative factors for the company include a new antitrust fine of 1.49 billion euros which the European Commission levied against it in March.
The key level to watch on the upside is 1,295 (July high). On the downside, support is provided by the trendline at 1,230.
Tuesday, April 30
Apple
EPS forecast: $2.36
Revenue forecast: $57.59B
Wall Street expects that revenue will decline by about 5-6% y/y. In order to encourage sales, Apple offered discounts and trade-in deals in China, Japan, and other countries.
The company no longer discloses iPhone sales, but analysts will make their estimates based on other data. So far, the opinion revolves around an 18% decline. The company desperately needs to increase sales in China, but with cheap competition from Huawei/Xiaomi, it’s hard despite the discounts.
All in all, the market attention will focus on iPhone revenue and total revenue, as well as on Apple’s guidance for the future quarters.
The stock made a significant advance in recent months and is now vulnerable for a decline. Support is at 198.35 and 193. Resistance lies at 210 and 214.
General Electric
EPS forecast: $0.09
Revenue forecast: $26.98B
The stock of General Electric has been in a bearish trend during the past 2 years. It fell by more than 65% since April 2017, whereas the S&P 500 added more than 27%. In 2019, the stock managed to recover giving bulls some hope for a bigger recovery.
At the same time, the stock’s reaction to the previous earnings reports was mostly negative. Indeed, the forecasts are uninspiring: EPS are expected to contract by 43% from the first quarter of 2018, while revenue may fall by 5.6% y/y. The Power and Lighting segments represent the company’s weakest spot.
There are decent support levels at 9 and 6.50. Resistance is at 10.30 (200-day MA) and 10.90 (50-week MA).
General Motors
EPS forecast: $1.1
Revenue forecast: $34.81B
According to the average forecasts, the company’s earnings fell by 3% year-over-year in Q1. There’s logic to these expectations: we already know that GM’s US sales were down 7% y/y in the first 3 months of the year.
As for the EPS, it’s expected to contract by 23% from the previous year. This is a very pessimistic forecast. The company had good prices for its higher-end models, and the expensive Cadillac brand is doing well. As a result, there’s a chance that earnings per share will surpass the low estimate. There may be a short-term positive reaction to that, although the general picture for the company remains grim.
Resistance is at 40.85 and 43.70, while support lies at 38.95 and 37.00.
Mastercard
EPS forecast: $1.66
Revenue forecast: $3.85B
Here’s a company that enjoys positive forecasts. Q1 EPS and revenue are expected to rise by 11.3% and 8.3% respectively.
The continuing shift to electronic forms of payment offers a major tailwind for Mastercard. The company will likely enjoy strong volume and transaction growth, as well as growth in services offerings, partially offset by higher rebates and incentives. Notice that Mastercard keeps investing to expand digital solutions, safety and security products, data analytics, geographic presence and platforms to boost the flow of payments. This will likely lead to higher expenses. The strength of the USD will somewhat affect the results. Still, the overall position of the firm is solid.
The stock is currently at the all-time high in the area of 246. The obvious levels to watch on the upside are 250 and 255. Support is at 240.85 and 233.
McDonald’s
EPS forecast: $1.76
Revenue forecast: $4.94B
McDonald’s sales increased during the last three consecutive quarters. The fast-food chain is doing better outside of the United States as there’s strong competition at its domestic market. In Q4, comparable-store sales growth held at about 2%, while international segments jumped by between 5% and 6%. Investors will eye the Q1 results for the figures to compare with those numbers. Better performance in the United States will send the stock higher, while a lower result will make it fall.
As for the EPS and revenue, the consensus forecast sees them down by 2.8% and 3.8% y/y respectively.
The stock price is near an all-time high of 198.47. Further resistance is at the psychological level of 200.00. Support is located at 195 and 191.
Pfizer
EPS forecast: $0.75
Revenue forecast: $13B
Analysts’ expectations for Pfizer stock are fairly muted. At the same time, notice that the pharma giant has a strong record of earnings surprises. The company’s earnings surpassed expectations in each of the last four quarters.
The recent leg down in the stock’s price was due to policy proposals in Congress that create the general uncertainty to the healthcare industry. As for the company itself, it has a sustainable business, although competitive pressure may have continued to hurt sales in Q1.
An advance above 40.35 will open the way up to stronger resistance at 41.50. The 100-week MA at 38.30 will act as the main support.
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