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This week provides an exciting week’s worth of earning results. After hints that Biden will soon begin his process of raising capital gains tax, the market crashed for a brief second. Investors quickly wiped away concerns over this news, continuing the bull market trend. Some of Wall Streets’ favorite stocks are prepared to announce earnings next week, such as Amazon, Tesla, Facebook, Apple, and Microsoft. These are some exciting stocks, but we can’t go through 20 expectations of earnings, and we believe there are more exciting opportunities out there. The stocks we’ll discuss in this week’s edition of “The Week Ahead” include Chubb, Advanced Micro Devices, and 3M.
Shaky earnings incoming for 3M
Earnings report announced Tuesday, April 27th before market open
Bloomberg
The multinational conglomerate company 3M has been on a bullish run for the past year, but their company is experiencing a shift in business. Their CEO Mike Roman has been doing his best to transform this company to provide results for shareholders. He has done this by cutting the business into four segments that align more with the company. Those four pieces are healthcare, consumer, transportation and electronics, and safety and industrial. Unfortunately for 3M Transportation and electronics and consumer goods were the two keys that held their company afloat during the pandemic. Consumer goods are expected to decrease since demand has steadily dropped. Looking at a company like Kimberly-Clark ($KMB), we can see just how this piece of 3M’s business may react in the early months of 2021. KMB noticed underwhelming performance in their earnings call last week, sending the stock down nearly 6%. As for 3M’s transportation and electronics business, it is also expected to see a down quarter. The shortage of semiconductors is expected to have a significant impact on this part of the business. Elective surgeries have recently opened back up, and a lot of construction is underway. Healthcare and safety, and industrial have to carry MMM if they are to see an up quarter.
MMM has been very shaky with its earnings reports over the past couple of quarters. Along with this, many big banks have issues underperform or sell ratings to this company. For now, 3M seems to be too risky to evaluate correctly. Depending on where and how Roman takes the company will play a big role in their future.
Advanced Micro Devices fight for market share from heated competition
Earnings report announced Tuesday, April 27th after market close
AMD
Advanced Micro Devices ($AMD) is set to announce their earnings results from their recent quarter. Unfortunately for them, Intel and Nvidia, their biggest rivals, have both posted earnings beats. While Nvidia beat their estimates with more margin, Intel still posted solid numbers for a company transitioning to a new CEO.
A recent trend we’ve been experiencing is winners and losers of the reopenings. For AMD, we should not fear this trend. AMD has a product line that is necessary pre and post covid. Two of the major reasons we could expect revenue growth are the Ryzen CPUs and Radeon GPUs. AMD continues to beat Intel processors and is on track to give Nvidia a tough time in the graphics department. The semiconductor shortage has proven the immense demand for AMD’s products, and without these shortages, AMD could expect even higher revenue growth. For now, revenue growth expectations are $3.21 billion, and EPS is $0.44, according to Zack’s Consensus Estimates. With the strong quarters produced by Intel and Nvidia, we expect to see an even stronger quarter from AMD. A strong beat can push their stock price even higher, as they already took some market cap from Intel last week.
Under the radar with insurance company Chubb
Earnings report announced Tuesday, April 27th after market close
Chubb
When the market crashed due to Covid-19, Chubb ($CB) may have been overlooked. Their stock price dropped below $100 a share, a price they haven’t experienced in over five years. Since then, they have demonstrated excellent results pumping their price back to all-time highs. On Tuesday, we will get an insight into how the company is performing.
Chubb is one of those companies that usually flies under the radar in headlines, but their growth potential is exciting to anyone looking. According to CNBC, this quarter is expected to have earnings of $2.54 billion. The previous quarter they beat estimates with $3.18 billion in earnings. The drop in earnings is of no surprise as their year-end earnings are usually their best. $2.54 billion would still be a great number to hit to begin the year strong if Chubb could capitalize on that.
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