Tech Giants and Auto Makers Headline Busy Earnings Week

Earnings week ahead: TSLA, GOOG, IBM, AAL, GM, F, VZ, T, and more (NASDAQ:TSLA)

As market participants gear up for another busy week in the stock market, a diverse array of companies across multiple sectors are set to report their quarterly earnings. Big names like Tesla (NASDAQ:TSLA) and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) are set to dominate headlines as the week will feature heavyweights from the technology, automotive, energy, healthcare and consumer goods industries. The week ahead is also packed with earnings from technology and communications behemoths like IBM (NYSE:IBM), AT&T (T), Verizon (NYSE:VZ), Comcast (NASDAQ:CMCSA), ServiceNow (NYSE:NOW), Texas Instruments (NASDAQ:TXN) and NXP Semiconductors N.V. (NXPI). Additionally, Spotify Technology S.A. (SPOT) will shed light on the music streaming industry. The automotive industry will be represented by General Motors (GM) and Ford (F). In the energy sector, NextEra Energy (NEE), TotalEnergies (TTE) and Enphase Energy (ENPH) will be closely watched for developments in renewable energy, while Valero Energy Corporation (VLO) offers insights into the refining industry. Healthcare and pharmaceutical companies are also well-represented, with AbbVie Inc. (ABBV), Bristol-Myers Squibb Company (BMY) and AstraZeneca PLC (AZN) highlighting drug development and healthcare trends. Other noteworthy reports include Thermo Fisher Scientific Inc. (TMO), Philip Morris International (PM), Colgate-Palmolive Company (CL), Visa (V), 3M Company (MMM), Lockheed Martin (LMT), RTX (RTX), Dow (DOW), Cleveland-Cliffs Inc. (CLF), Coca-Cola (KO), Chipotle Mexican Grill (CMG), American Airlines Group (AAL), Southwest Airlines (LUV), United Parcel Service (UPS) and Waste Management (WM). Below is a rundown of major quarterly updates anticipated in the week of July 22-26: Cleveland-Cliffs (CLF) is set to release its Q2 earnings results on Monday after market close. Analysts expect a year-over-year decline in EPS and revenue. Seeking Alpha's Quant Rating system upgraded the stock from Sell to Hold at the beginning of July, aligning with Wall Street analysts' consensus recommendation. Seeking Alpha author Michael Del Monte believes CLF shares remain undervalued, with long-term growth potential. Despite the industry facing a cyclical downturn, he does not anticipate near-term excitement from shareholders. Also reporting: Verizon Communications (VZ), AGNC Investment (AGNC), Nucor (NUE), SAP SE (SAP) and more. Elon Musk's EV giant Tesla (TSLA) is set to disclose its financial results on Tuesday after market close, with analysts expecting a significant year-over-year decline in EPS due to pricing impacts and the trade war with China. Tesla delivered 443,956 electric vehicles in Q2, slightly above the 439,302 projected by analysts and a substantial increase from the previous quarter's 386,810 deliveries. However, the figure was nearly 5% below year-ago delivery numbers of 466,140. Tesla, once boasting over $1T market cap, continues to be the weakest performer in the "Magnificent 7" tech and growth stocks. So far in 2024, Tesla's share price is down 3%, but this modest retreat comes as a result of a surge of over 60% in the past 3 months, raising its market cap to $800B from below $500B in Q1. Recently, Tesla postponed its robotaxi unveiling event to October from an original schedule of August 8. Both Seeking Alpha's Quant Rating system and sell-side analysts have a cautious stance on the stock, assigning Hold ratings. Earlier this week, Barclays reiterated an Equal-weight rating on Tesla just ahead of its Q2 earnings report, raising its price target to $225 from $180. Analyst Dan Levy believes Tesla has a clear lead in the global electric vehicle transition and the emergence of software-defined vehicles. However, the firm believes near-term headwinds are being overlooked amid the recent rally in the stock, keeping the firm on the sidelines. SA contributor Rasoli research argues that the Tesla's stock is overvalued due to speculative growth and extreme multiples, causing challenges like increased competition and low margins. High capital intensity hinders cash flows and limits capital return to shareholders. Tesla's technological advantage diminishes due to underwhelming self-driving capabilities and potential liability issues. Alphabet (GOOG, GOOGL) is set to announce its Q2 results after the closing bell on Tuesday. Analysts predict a strong quarter, with a 27% increase in earnings and a 12% rise in revenue. Over the past year, Alphabet's share price has surged over 45%, significantly outperforming the S&P 500's approximately 22% return. Last month, Seeking Alpha's Quant Rating system downgraded Alphabet from Strong Buy to Hold, although Wall Street analysts maintain a bullish outlook with a consensus Buy rating. Seeking Alpha author Dair Sansyzbayev advises caution, citing valuation concerns due to recent rallies. He highlights that a valuation analysis suggests Alphabet's fair value is $1.7T, 27% lower than its current market cap. Additionally, Google's heavy reliance on search presents a secular challenge as generative AI disrupts the industry. The company lags OpenAI's ChatGPT, with competition expected to intensify. Also reporting: General Electric (GE), Visa (V), Coca-Cola (KO), General Motors (GM), Lockheed Martin (LMT), Freeport-McMoRan (FCX), Philip Morris International (PM), United Parcel Service (UPS), Texas Instruments (TXN), Comcast (CMCSA), Spotify Technology S.A. (SPOT), Kimberly-Clark (KMB), Capital One Financial (COF), PulteGroup (PHM), Mattel (MAT) and more. Detroit-based automaker Ford Motor (F) is scheduled to release its Q2 earnings results after the market close on Wednesday. EPS is anticipated to decline Y/Y, while revenue is projected to grow by 5%. Recently, Ford reported a 1% growth in Q2 deliveries to 536,050, driven by a robust performance of electric vehicles (EVs) and hybrids. The F-150 Lightning saw a 77% increase in sales, while total EV sales rose 61%. Total truck sales increased by 5% to 308,920, with the F-Series truck seeing a 30% increase. Hybrid sales also saw a 56% increase to 53,822. Yiannis Zourmpanos, a Seeking Alpha author with a bearish stance on the stock, notes that Ford's stock has underperformed, losing nearly 50% from 2022 highs and lagging General Motors. With reduced capital expenditure and free cash flow, investors should consider the 4.3% dividend yield, but caution is needed due to the challenging macro environment, the analyst stated. Also reporting: AT&T (T), IBM (IBM), Annaly Capital Management (NLY), Newmont (NEM), NextEra Energy (NEE), QuantumScape (QS), ServiceNow (NOW), Chipotle Mexican Grill (CMG), Waste Management (WM), General Dynamics (GD), Thermo Fisher Scientific (TMO), Las Vegas Sands Corp. (LVS), KLA Corporation (KLAC), Deutsche Bank (DB), International Paper Company (IP), Boston Scientific Corporation (BSX), CME Group (CME), Whirlpool (WHR) and more. Following a disappointing result from its peers Delta Air Lines (DAL) and United Airlines (UAL), American Airlines (AAL) and Southwest Airlines (LUV).will be reporting its Q2 results on Thursday. Both AAL and LUV are anticipated to report almost 50% Y/Y declines in profits, as a result of an uncertain macroeconomic environment with high oil prices and elevated interest rates. Both Seeking Alpha's Quant Rating system and Wall Street analysts maintain a Hold rating on both stocks. Stone Fox Capital, holding a bullish stance on AAL and LUV, states, "American Airlines stock is undervalued, with the stock valued as if bankruptcy is around the corner, yet the more likely outcome is stock buybacks." Additionally, "Elliott Investment Management made a large investment in Southwest Airlines Co. due to underperformance, calling for a leadership upgrade and predicting a 77% upside potential. The airline faces revenue and cost performance issues, needing significant operational improvements to justify the current price compared to legacy airlines." Also reporting: AbbVie (ABBV), RTX Corporation (RTX), Dow (DOW), Honeywell International (HON), Valero Energy (VLO), AstraZeneca (AZN), Union Pacific (UNP), TotalEnergies SE (TTE), Unilever PLC (UL), Sanofi (SNY), Northrop Grumman (NOC), Baker Hughes Company (BKR), Weyerhaeuser Company (WY), Stellantis N.V. (STLA), Juniper Networks (JNPR), Norfolk Southern (NSC), New York Community Bancorp (NYCB), Hasbro (HAS), Harley-Davidson (HOG) and more. Minnesota-based 3M (MMM) is slated to release its Q2 update on Friday, ahead of the opening bell. Analysts anticipate more than a 20% decline in the firm's top and bottom lines. SA author Stephen Simpson predicts that MMM's Q2 results will be less than its multi-industrial peers, with an organic contraction of around 1%. Auto electrification and electronics are expected to be healthier businesses, but short-cycle manufacturing consumables could be weak. Bill Brown has been named as the new CEO, with potential for meaningful transformation, the analyst stated.

Big Tech Earnings Loom: What to Expect

Many in the market are looking to the two members of 'the Magnificent 7' who report quarterly results this week to help reverse the stock market's recent weakness. The immediate catalyst for the stock market pullback appears to be renewed uncertainty about regulatory and trade policies following the November elections, particularly with respect to export restrictions on semiconductor players. That said, we are in a seasonally soft time of the year and should perhaps resist the temptation to read too much into the recent weakness of the Mag 7 stocks, particularly given these stocks' impressive runs already. The chart below shows the performance of the Mag 7 stocks since the start of July relative to the S&P 500 index. We have Tesla and Alphabet on deck to report Q2 results this week, both reporting after the market's close on Tuesday, July 23. The current Q2 Zacks Consensus EPS for Alphabet of $1.85 has remained unchanged over the last two months, as has Tesla's Q2 EPS estimate of $0.62. For Alphabet, the Q2 estimates of $1.85 per share on $70.6 billion in revenues represent year-over-year changes of +13.7% and +28.5%, respectively. Tesla's Q2 EPS estimate is -31.9% below the year-earlier period on +0.8% higher revenues. Both stocks move big on the earnings release, but the EPS surprise isn't always the most important factor behind the stock's post-release reaction. Alphabet shares were up following the last quarterly release on April 25, with the market appreciating the company's cloud results and AI outlook. Tesla missed on the top and bottom-lines in the April 23 quarterly release, but the stock was up following the numbers as the market liked the company's performance on the deliveries front. In fact, Tesla shares have been on a steady uptrend since the April 23 release, reversing the persistent underperformance of the preceding period. The other Mag 7 players will report the following week, with Nvidia being the last one to release quarterly results on August 28. Take a look at the chart below that shows current consensus expectations for the 'Mag 7' stocks as a whole for the current and coming periods in the context of what they were able to achieve in the preceding period. Image Source: Zacks Investment Research As you can see, the group is expected to bring in +25.6% more earnings relative to the same period last year on +13.3% higher revenues. The chart below shows the group's earnings and revenue growth on an annual basis. Image Source: Zacks Investment Research As we all know by now, the group's phenomenal boost in 2021 partly reflected pulled forward demand from future periods that got primarily adjusted in 2022. The group returned to the 'regular/normal' growth model last year, and the trend is expected to continue this year and beyond. Beyond these Mag 7 players, total Q2 earnings for the Technology sector as a whole are expected to be up +15.5% from the same period last year on +9.3% higher revenues. The chart below shows the sector's Q2 earnings and revenue growth expectations in the context of where growth has been in recent quarters and what is expected in the coming four periods. Image Source: Zacks Investment Research As with the 'Mag 7', the Tech sector dealt with the pulled-forward revenues but is expected to remain firmly in growth mode, as the chart below shows. Image Source: Zacks Investment Research The Tech sector has enjoyed a favorable revisions trend for the last few quarters, with the Mag 7 stocks leading the rising estimates trend. The current +17.2% earnings growth expected for the group is up from +14.2% three months ago. Estimates for next year have also gone up. Earnings Season Scorecard and This Week's Earnings Reports Through all the results that came out on Friday, July 19, we have seen Q2 results from 71 S&P 500 members, or 14.2% of the index's membership. Total earnings for these 71 index members are up +8.7% from the same period last year on +5.2% higher revenues, with 83.1% beating EPS estimates and only 53.5% able to beat revenue estimates. The Q2 reporting cycle really ramps up this week, with more than 500 companies on deck to report results, including 135 S&P 500 members. In addition to the aforementioned Alphabet and Tesla, this week's line-up includes a representative cross-section of reports from different sectors, including bellwethers like Verizon and AT&T, UPS, Coke, GM and Ford, Spotify, IBM, Chipotle, and others. The comparisons charts below put the earnings and revenue beats percentages for these companies in a historical context. Image Source: Zacks Investment Research The one notable feature of the above comparison charts is the very low Q2 revenue beats percentage. In fact, 53.5% is a new low for this group of 71 index members over the preceding 20-quarter period (5 years). The comparison charts below put the Q2 earnings and revenue growth rates for these 71 companies in a historical context. Looking at Q2 as a whole, combining the actual results that have come out already with estimates for the still-to-come companies, total S&P 500 earnings are expected to be up +9% from the same period last year on +4.8% higher revenues. This will be the highest quarterly growth pace since the +10% earnings growth rate in the 2022 Q1 period. The chart below that shows the year-over-year earnings and revenue growth for 2024 Q2 in the context of what we saw in the preceding four periods and what is currently expected for the following three periods. Image Source: Zacks Investment Research As we have been flagging all along in this space, we experienced a notably favorable revisions trend ahead of the start of the Q2 earnings season, with estimates for Q2 holding up far better than other recent periods. In the three-month period from the start of the quarter through June 30, Q2 estimates for the S&P 500 index fell the least relative to the comparable periods of other recent quarters. Not only is the Q2 earnings growth the highest since the first quarter of 2022, but the absolute level of aggregate earnings for the period is also on track to be a new all-time quarterly record. You can see in the chart below that the $515.5 billion in aggregate S&P 500 earnings for Q2 are above the $512.3 billion earned by the index in 2023 Q3. Image Source: Zacks Investment Research Looking at earnings expectations on an annual basis, total 2024 S&P 500 earnings are expected to be up +8.8% on +1.6% revenue growth. The expected revenue growth pace improves to +3.9% once Finance is excluded from the aggregate data, with the index level aggregate earnings growth for the year declining only to +8.7% on an ex-Finance basis. Image Source: Zacks Investment Research For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> Q2 Earnings Season Starts Positively Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It's bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is "Will you get into the right stocks early when their growth potential is greatest?" Zacks has released a Special Report to help you do just that, and today it's free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Earnings playbook: Your guide to a busy week of earnings, including Alphabet and Tesla

Wall Street will get its first glimpse of Big Tech earnings this week. Google-parent Alphabet and Tesla are among the more than 100 S & P 500 companies slated to report. Results from Ford Motor, IBM and General Motors are also on deck. The reporting period is off to a solid start. About 14% of S & P 500 companies have posted second-quarter numbers through Friday's close. Of those names, 81% have beaten expectations, according to FactSet. At 9.66%, overall S & P 500 earnings growth is also on track to be the highest since the fourth quarter of 2021. Take a look at CNBC Pro's breakdown of what's expected from this week's key reports. All times are Eastern. Tuesday General Motors is set to report earnings before the bell. Management is slated to hold a call at 8:30 a.m. Last quarter: GM raised its 2024 guidance and posted a big Q1 earnings beat . This quarter: Analysts expect earnings grew by more than 40% year over year, per LSEG. What CNBC autos reporter Michael Wayland is watching: "Investors have high expectations for General Motors to not only report strong earnings for the second quarter, but at the very least guide toward the top end of its 2024 financial targets, if not raise them for a second consecutive quarter. New vehicle sales and prices have remained more resilient than GM had anticipated to begin the year, creating a favorable environment for the company during the first half. Other than the results, investors will be eager to hear any updates regarding the company's rollout of new electric vehicles, gas-powered trucks and crossovers as well as any comments regarding GM's Cruise autonomous vehicle unit and China, where GM has struggled as of late." What history shows: Data from Bespoke Investment Group shows GM beats earnings expectations 87% of the time. The automaker has also posted an earnings beat for seven straight quarters. Tesla is set to report earnings after the close. Leadership will then hold a conference call at 5:30 p.m. Last quarter: TSLA shares jumped after CEO Elon Musk said the company aims to start producing an affordable EV by early 2025. This quarter: Analysts polled by LSEG expect Tesla to report a 30% year-over-year earnings decline. What to watch: Some analysts are concerned about Tesla heading into Tuesday's report, including Dan Levy at Barclays, who has an equal weight rating on the stock. In a note Wednesday, he warned that the report "may reaffirm continued pressure on margins, even if they are near a trough." He added that, "while 2024 expectations have largely rightsized, we still see the need for cuts to estimates in the mid-term on weaker volumes, leaving considerable uncertainty around when fundamentals stand to become favorable again." Baird's Ben Kallo is more upbeat ahead of the report. "We like the setup and think there is a high probability of an EPS beat. We think a more stable pricing environment during the quarter, higher revenue from full self-driving, and the large beat in its Energy Segment all support a solid quarter." What history shows: Bespoke data shows GM beats earnings expectations 62% of the time. However, the stock has fallen after four of the last five earnings days. Alphabet is set to report earnings after the bell, followed by a call at 4:30 p.m. Last quarter: GOOGL shares popped after the company announced its first-ever dividend . This quarter: The tech giant is expected to post earnings growth of nearly 30% from the year-earlier period, according to LSEG. What to watch: Key for Alphabet investors will be updates on the company's digital ad sales as well as improvements on the artificial intelligence front. Deutsche Bank analyst Benjamin Black also said he likes the stock's setup heading into the report. "All in, given the robust ad market, AI-driven tailwinds, as well as indications of management's growing cost discipline, we maintain our Buy rating," he said in a note Thursday. What history shows: Google averages a more than 1% gain on earnings days, per Bespoke. The tech giant has also topped bottom-line estimates for five straight quarters. Wednesday Ford Motor is set to report earnings after the bell. A call with management is slated for 5 p.m. Last quarter: F earnings beat estimates as the company's commercial unit offset EV losses . This quarter: Earnings are expected to have fallen slightly for the automaker, LSEG data shows. What CNBC autos reporter Michael Wayland is watching: "Ford Motor is expected to report a relatively solid second quarter, however, not as strong as its crosstown rival GM. Ford remains in the midst of a restructuring under Ford CEO Jim Farley called 'Ford+.' The plan initially focused heavily on all-electric vehicles but also includes rolling out new products more efficiently and cost-cuts to make the company's vehicles more profitable. Wall Street expects the automaker's 'Ford Pro' commercial business as well as sales of its highly profitable traditional pickup trucks to offset losses in its 'Model e' EV business." What history shows: Ford earnings exceed estimates nearly 70% of the time, according to Bespoke. However, shares average a 0.45% decline on earnings days. IBM is set to report earnings in the postmarket, followed by a call at 5 p.m. Last quarter: IBM reported another revenue miss and announced it would acquire HashiCorp for $6.4 billion . This quarter: Analysts see flat year-over-year earnings and revenue, per LSEG. What to watch: IBM shares have outperformed the S & P 500 tech sector in the past month, rising 7% while the space is down 3% in that time. Can this momentum continue? RBC analyst Matthew Swanson thinks so. He wrote Thursday: "We expect solid results when the company reports Q2/24 on 7/24, with continued infrastructure outperformance and improving software results despite a challenging comp." Swanson has an outperform rating on shares. What history shows: IBM profits top expectations 84% of the time, Bespoke data shows. Thursday American Airlines is set to report earnings in the premarket, with a call slated for 8:30 a.m. Last quarter: AAL posted a loss but issued better-than-expected guidance. This quarter: Earnings for the airline are expected to have fallen more than 10% from the year-earlier period, per LSEG. What CNBC airlines reporter Leslie Josephs is watching: "American Airlines investors will want to look for clear steps the company is taking to correct a direct-to-consumer sales strategy that backfired earlier this year. The carrier in May cut its profit and revenue forecast and said its chief commercial officer was leaving the company. Investors in the airline will be looking for clues about travel demand and further cuts to capacity as added flights this year have pushed down airfare. American also has had one of the most contentious labor negotiations with its flight attendants and executives are likely to be questioned about progress." What history shows: American Airlines top earnings estimates 88% of the time. However, shares tend to be flat on earnings days.

Mag 7 Earnings: 2 Reports Coming This Week

Earnings season is in full swing, with a notably stacked reporting docket for the week. The expectation is for another period of positive growth, underpinned by strength within tech. And concerning the notable releases next week, two Mag 7 members, Alphabet GOOGL and Tesla TSLA are on the reporting docket. But how do expectations stack up heading into each respective release? Let's take a closer look at estimates and a few key metrics. Mega-cap titan Alphabet will reveal its quarterly results next Tuesday on July 23 after the market's close. Recent quarterly prints have been favorable for the company, with it exceeding the Zacks Consensus EPS estimate by an average of 11% across its last four releases. Shares enjoying bullish activity following its latest print, sparking a rally. The company has enjoyed a nice growth phase, with earnings and revenue from the release climbing 61% and 15% year-over-year, respectively. Analysts have taken a favorable stance on the company's outlook for the quarter to be reported, with the $1.85 Zacks Consensus EPS estimate up nearly 6% since mid-April. The value reflects a 28% change from the year-ago period, continuing its recent growth trajectory. Image Source: Zacks Investment Research Cloud and AI optimism fueled shares following its latest release, with investors likely to be laser-focused on the same topics again. The company's Cloud results have recently exceeded our expectations in back-to-back releases, easing prior fears of an overall slowdown in the space. Image Source: Zacks Investment Research Shares aren't expensive heading into the release despite the strong share performance, with the current 21.8X forward 12-month earnings multiple sitting beneath the 22.4X five-year median. And the current PEG ratio works out to be 1.2X, reflecting that investors are paying a fair price for the forecasted growth. Shares popped following the release of Tesla's delivery/production data. The EV leader's Q2 deliveries reached 444k, and EVs produced totaled 411k. The results pleased investors, though it's worth noting that deliveries were down a modest 4.1% on a year-over-year basis. Margins will undoubtedly be in focus for the company's quarterly release, which is expected on next Tuesday, July 23. Recent margin pressures have been a focus among investors, helping explain the stock's slow start to 2024. Please note that the chart below is on a trailing twelve-month basis. Image Source: Zacks Investment Research Earnings expectations are overall down since the end of April, but positive revisions did hit the tape just recently near the beginning of July, a favorable development leading into the release. The $0.62 per share expected suggests a 14% climb from the year-ago period, getting the EV titan back into positive territory. Image Source: Zacks Investment Research Despite a slow start to the year, Tesla shares have gained a remarkable 70% just over the last three months, showing notable outperformance and bullish sentiment. A favorable quarterly release could easily keep shares melting higher, particularly if the company speaks favorably about margins. Bottom Line Earnings season kicks into a much higher gear this week, with many notable companies scheduled to report, including the two Mag 7 members Alphabet GOOGL and Tesla TSLA. Concerning Alphabet, investors will be looking for further color on the cloud computing / AI environment, whereas Tesla investors will be zeroed in on margins and future plans surrounding autonomous driving. Both companies report after the market's close on July 23. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It's bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is "Will you get into the right stocks early when their growth potential is greatest?" Zacks has released a Special Report to help you do just that, and today it's free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.