Stock market: the earnings of Google, Amazon, Intel, and McDonald’s
The new earnings season continues in the United States. This means stocks of the largest American companies will likely make big moves. You can trade these stocks with FBS (learn more) and make money!
Most of the releases take place after the market close on Thursday so that you will be able to trade on them on Friday.
Thursday, July 25
Time of release: 23:30 MT time
EPS forecast: $11.1
Revenue forecast: $38.16B
The last time Google revealed its financial results, it managed to beat the earnings estimate. However, revenue missed forecast as advertising revenues (85% of the total revenue) declined. This factor will likely continue to have a negative impact on the tech giant’s performance. The exchange rate is also acting against the stock.
Moreover, the recent months weren’t easy for Alphabet, Google’s parent company. It took a bit hit on the media reports that the US Department of Justice was preparing to launch an antitrust investigation against Google. As a result, the current consensus forecast reflects more than a 2% decline in EPS.
At the same time, bulls place hopes in the firm's cloud computing segment. In addition, this year Google underperformed many other FAANG stocks - this speaks in favor of the stock and means that it has the potential to go up if the figures turn out to be decent enough. GOOGL is trading close to the lowest forward P/E multiple, so it's cheap enough to grab. Watch the company’s report to see whether concerns about revenue growth slowdown dissipate or stay.
Google stock retraced 50% of the April-June decline. The major resistance lies at 1,155/60 (200-day MA). If the price manages to overcome this level, the target will be at 1,188.50 (61.8% Fibo). Support is at 1,125.50 (38.2% Fibo) and 1,115.50 (200-day MA).
Friday, July 26
Intel
Time of release: 00:00 MT time
EPS forecast: $0.89
Revenue forecast: $15.67B
The market is rather pessimistic about the world’s second-largest semiconductor chip manufacturer. According to the consensus forecast, its EPS have fallen by over 15%, while revenue declined by 3%. Intel experiences problems within both of its key segments: data centers and client computing. The challenges and troubles of the tech firm include NAND pricing declines, lower platform revenues, expenses related to 4G modem ramp, as well as weakness in demand from China.
Notice that investors are ready for weak results. Since the start of the year, Intel underperformed S&P 500. The company’s P/E of 11.56 is below its industry’s average of 15.79. That’s why the stock is on the rise since the middle of March and has made a leap up in the recent week. Intel has recently announced some innovative products such as 10th Gen CPUs. These things can really be in high demand in the future. As a result, if the company releases the positive outlook it might be what investors need to cheer up and buy the stock as long as it’s cheap enough.
Resistance is at 53.20 (61.8% of April-May decline) ahead of 55 (March high). Support lies at 51.20 (50% Fibo) and 50.40 (100-day MA).
Amazon
Time of release: 00:30 MT time
EPS forecast: $5.56
Revenue forecast: $62.47B
When shopping moving more and more from offline to offline, Amazon has been enjoying immense success. This is reflected in a steady uptrend we see in its stock, which is no wonder: EPS came above forecast for seven quarters in a row. Its longer-term prospects are fine. The short-term dynamics will depend on the upcoming financial results.
Strong figures can bring Amazon towards the record high in the 2,050.50 area. At the same time, be aware that the stock has become overvalued: its P/E ratio equals to 83.28. In other words, the stock is quite overvalued. Support is at 1,960 and 1,930, as well as 1,900. These levels will be attractive for buying.
Watch the news regarding Amazon Prime (paid subscription service offered by the company): growth in membership and expansion of content will push the price up). Dynamics of these indicators will be important for the price.
McDonald’s
Time of release: 18:00 MT time
EPS forecast: $2.05
Revenue forecast: $5.33B
The stock of McDonald’s has demonstrated exceptional performance this year as it gained more than 20% since the start of 2019.
So far, investors remained focused on comparable revenue growth, a.k.a. sales growth at restaurants open for longer than one year. This indicator showed that the world’s most famous fast-food chain is doing very fine. Thanks to timely investments in technology, McDonald’s managed to significantly improve customer experience. Innovations are to continue as the company has taken steps to improve drive-thru ordering and mobile app. All this increases efficiency and thus profit margin.
In the meantime, the price in the vicinity of the all-time high just above 216. The stock is currently at the upper edge of the bullish channel since 2015. Although there may be a kind of “sell-the-fact” scenario with McDonald’s, the company’s management is proactive, so any corrections will likely meet the demand of buyers. The key support levels in the medium term are at 200 and 185. The decline below 210 will open the way down to 201. The upside will be more difficult with resistance at 220 and 230.
