Here's your weekly Investing Action Plan: what you need to know as an investor for the coming week.
[ibd-display-video id=3079566 width=50 float=left autostart=true] Earnings season picks up steam with more big banks reporting, such as Bank of America ( BAC ), Citigroup ( C ) and Goldman Sachs ( GS ), while tech heavyweight IBM ( IBM ) could set a major milestone with its quarterly results, and leaders in transportation and health kick off the rush for their respective sectors. Meanwhile, the auto sector will be in the spotlight again as the top U.S. car show begins.
Stocks To Watch
On the back of a solid holiday retail season - the strongest since the recession, according to the National Retail Federation - certain brands merit a closer eye.
Michael Kors ( KORS ), the affordable luxury handbag maker, has shot up more than 30% since the holiday retail selling period began in early November. Handbag brands have been easing up on their department store promotions as they look to rein in pricing and prestige.
Shares of $1,000 parka maker Canada Goose (GOOS) are up over 50% since breaking out in early October, with the March IPO hitting a new high of 33.96 on Jan. 5, as the stock continues to create more distance from its 50-day moving average.
DKNY parent G-III Apparel (GIII), which licenses a number of well known brands including Kenneth Cole, Cole Haan, Tommy Hilfiger and others, has soared 60% since early November and broke out from a 31.29 entry point in early December.
Shares of baby-clothes maker Carter's (CRI) have rallied 30% since bouncing off their 50-day line in mid-October.
Hanesbrands (HBI) managed to retake its 200-day line on Thursday after a months-long trip below the key level following its most recent earnings report. Hanesbrands' 50-day crossed below its longer-term moving average in late November, a bearish sign, but keep an eye on the stock to see if it can further its gains.
Citigroup reports early Tuesday, and EPS is expected to rise 4.4% to $1.19, as revenue edges up 0.5% to $17.09 billion. On Wednesday, Bank of America is seen boosting EPS 10% to 44 cents, on a 6.5% revenue increase to $21.28 billion, while Goldman Sachs' EPS is expected to fall 3.5% to $4.90 as revenue slips 6.6% to $7.63 billion. Morgan Stanley (MS), which has outperformed rival Goldman in recent quarters, reports Thursday, and analysts see EPS down 4.9% to 77 cents while revenue ticks 1.2% higher to $9.13 billion. The reports follow strong results from JPMorgan Chase (JPM) on Friday and mixed results from Wells Fargo (WFC).
American Express Profit To Pop
The card giant reports late Thursday, and analysts see EPS jumping 69% to $1.54 as revenue climbs 8.7% to $8.72 billion. The bottom-line increase would mark the biggest since 2010 but that excludes a $2.4 billion impact from tax cuts that reduce the value of deferred tax assets. American Express (AXP) also warned earlier this month that full-year profit would come in below forecasts. But like the banks, management still sees long-term benefits from the cuts.
Turnaround For Big Blue?
IBM reports Q4 results after the market close Thursday, with the expectations it will do something not seen in at least 18 quarters, which is to show an increase in revenue, year over year. The consensus estimate is for IBM to report revenue of $22 billion, up 1%. IBM has been undergoing a multiyear reorganization, which has included shedding old business lines and starting new ones. The consensus estimate on EPS is $5.16, up 3%.
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Detroit Auto Show
The North American International Auto Show starts this weekend in Detroit, right after CES, which has become a major venue for automakers to their electric vehicle and self-driving efforts. The Mustang Bullitt GT is among dozens of vehicles expected to make their worldwide debut at this year's event, while execs, designers and analysts from more than 2,200 companies around the world will share insights about the fast-changing automotive and mobility landscape. The Deutsche Bank Global Auto Industry Conference also takes place in Detroit Tuesday and Wednesday. General Motors (GM) and Ford Motor (F) have featured speakers at the event, including GM CEO Mary Barra.
UnitedHealth's Quarterly Checkup
The top U.S. insurer reports before the open on Tuesday. Analysts expect the Dow Jones industrial average component to earn $2.51 a share, up 19% from a year ago, as revenue rises 8.4% to $51.5 billion. UnitedHealth has been the industry trendsetter, expanding beyond managed care into prescription benefit management, health services and technology consulting via its Optum unit. The results will follow rival Aetna's (AET) deal to be acquired by CVS Health (CVS) in what is expected to set off a major shake-up in the health sector.
Key Oil Data Due As Prices Surge
On Wednesday, the International Energy agency will release its monthly report. OPEC will release its monthly energy outlook Thursday, and the U.S. Energy Information Administration will report weekly U.S. stockpile and production figures Thursday instead of Wednesday due to the Martin Luther King Jr. holiday Monday. Schlumberger (SLB) will report Q4 results Friday. Analysts expect the oilfield service provider to report a 63% EPS jump to 44 cents and a 14% increase in revenue to $8.12 billion. The bellwether may offer some guidance on the industry as oil prices hit three-year highs.
U.S. Defense Blueprint
The Pentagon will release its National Defense Review on Friday and will outline where the DOD will focus its resources. The bulk of the review will be classified, but the Pentagon will release a nonclassified version to the public. The review follows the National Security Strategy in December and comes as the military tries to balance several costly efforts, such as expanding the missile defense shield, overhauling the three legs of the nuclear arsenal, ramping up production of Lockheed Martin's (LMT) F-35, and building the Navy's fleet back up. In February, the Pentagon is scheduled to release the Ballistic Missile Defense Review and Nuclear Posture Review.
Transport Earnings To Grow
Rail giant CSX (CSX) reports Q4 numbers Tuesday after the market close. Analysts call for EPS to rise 14% to 56 cents despite a 5% decline in revenue to $2.88 billion. This will be the first report after CSX named James Foote as the new president and CEO in December following the death of former chief and legendary railroader Hunter Harrison. For Canadian Pacific (CP), out Thursday, analysts expect EPS of $2.59, up 14%, and revenue of $1.33 billion, up 9%. For trucking leader J.B. Hunt (JBHT), also on Thursday, EPS is expected to grow 5% to $1.02 as revenue expands 12% to $1.93 billion. Kansas City Southern (KSU), on Friday, should see EPS climb 21% to $1.35 as revenue grows 10% to $657 million.
- Alcoa (AA) will announce Q4 results Wednesday after the stock market closes. The aluminum producer is expected to report EPS of $1.23, up from 14 cents a year ago, and revenue of $3.35 billion, up 32%.
- ASML Holding (ASML) reports Q4 earnings early Wednesday. Analysts estimate that the chip manufacturing gear maker's EPS will dip 3% to $1.25, with revenue rising 22% to $2.5 billion.
- Fastenal (FAST) reports early Wednesday, and analysts see EPS climbing 12.5% to 45 cents, with revenue up 14% to $1.08 billion.
- Taiwan Semiconductor (TSM), the world's largest producer of made-to-order chips, is expected early Thursday to report Q4 EPS growth of 3% to 62 cents, with revenue rising 11% to $9.15 billion.
- Atlassian (TEAM) reports late Thursday, and analysts expect the developer of collaboration software to grow EPS 33% to 12 cents as revenue jumped 37% to $204 million.
- Charles Schwab (SCHW) reports early Wednesday, and the brokerage's EPS is seen rising 13.9% to 41 cents as revenue increases 13% to $1.23 billion.
- Interactive Brokers (IBKR) will issue results late Tuesday, and EPS is expected to shoot up to 39 cents from 7 cents a year ago, as revenue more than doubles to $399 million.
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