Trading earnings: AIG, Cisco, Coca-Cola & others

Trading earnings: AIG, Cisco, Coca-Cola & others

2019-11-11 • Dikemaskini

The earnings season continues in the United States. Every week we tell you which large American companies are going to release their earnings reports. You can trade stocks of each of these companies with FBS. To learn more, please check this info.

AIG

Date: February 13

EPS forecast: $0.42

Revenue forecast: $11.88B

American International Group Inc is a multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions.

In September, when the company last reported its financial results, it announced that earnings declined by 72% y/y. This time EPS are also expected to drop in the December quarter from the same period of the previous year. The main problems AIG is facing include challenging property and casualty market, unfavorable foreign exchange volatility, credit, and equity market conditions, as well as catastrophic claims. However, in 2019 analysts expect EPS to increase by more than 100%. The company needs to persuade investors that it is making progress and is confident in the pace and timing of the expected eventual improvement from its operational changes.

Notice that AIG performed worse than the market during the last few months: its stock has lost 19.6% since the end of Q3, whereas S&P 500 has dropped by just 7.1%. At the end of 2018, AIG tested the lowest levels since the start of 2013. Many analysts think that the stock will become more expensive in the longer-term and target the price of $50-70 in 12 months.

Technically, the may be an “Inverted Head and Shoulders” forming on W1 and D1. This scenario will be relevant as long as the stock is trading above 41.00. Advance above 44.25 is needed to open the way up.

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Cisco

Date: February 13

EPS forecast: $0.72

Revenue forecast: $12.41B

Cisco is a multinational technology conglomerate. It’s one of the leaders of the US technology industry and it can give clues on the health of the tech ecosystem and the global economy. The risks for it come from the US-China trade war.  However, the last time the company said that trade tensions wouldn’t affect it much. This made investors happy. The market will watch Cisco’s updated outlook with great attention seeking further reassurance.

The latest actions of the company have been quite active: it acquired software solutions provider Ensoft, and Duo Security. The purchases of semiconductor company Luxtera and Singularity Networks are still in progress.

The resistance line connecting 2018 highs will be the major obstacle on the upside at 48.70. The next resistance levels are at 49.50 and 50.00. Support is at 46.20 and 44.90.

Cisco.png

Coca-Cola

Date: February 14

EPS forecast: $0.43

Revenue forecast: $7.06B

The company performed well in Q3 thanks to the increased demand for the zero-calorie drinks such as Diet Coke and Coke Zero Sugar. Moreover, Coca-Cola has made some successful marketing decisions. It is also actively trying to diversify in the beverages business. For example, it bought Costa Coffee in 2018. Notice, however, that this time revenue is expected to decline due to the company’s refranchising of its bottling business.

Coca-Cola was one of the best-performing Dow stocks over the last year. The company exceeded analysts’ expectations in each of the first three quarters of 2018. Its dynamics during the last 2 weeks was positive. Resistance is provided by the psychological level on 50.00, 50.50 and 2018 high at 50.85. The first important support is at 48.50, further support levels at 48.20 and 47.80.  

 Cola.png

Nvidia

Date: February 14

EPS forecast: $0.71

Revenue forecast: $2.3B

Nvidia has warned the market of negative results for Q4 quarter citing weakness in China and slow gaming chip and data-center sales. However, investors will be eager to learn more from the company, for example, how big its problems in China are and whether the data-center business is able to rebound. In addition, traders will eye Nvidia’s capital-return plans and expense discipline. Finally, the company’s own projections and plans for 2019 will be important.

Nvidia is consolidating in a triangle around 151.00 after about 50% sell-off from September high at 292.76. A lot of bad news for the company is already priced in. Resistance is at 156.20 and 163.70, while support lies at 144.00 and 135.00.  

Nvidia.png

PepsiCo

Date: February 15

EPS forecast: $1.49

Revenue forecast: $19.52B

Investors don’t expect much from Pepsi 's earnings report this week. The company’s facing continuous challenges in its two biggest segments, soda, and packaged snacks. As a result, Q4 report may conclude a year that wasn’t really successful for the company: it was falling behind its rival Coca-Cola. At the same time, the new CEO Ramon Laguarta might use the report as an opportunity to announce a new strategy. Investors will crave the information about the company’s sales growth and capital return plans as well as the details of SodaStream acquisition.

PepsiCo has recently managed to rise above the 100-week MA at 112.45. This line will act as support. However, the stock lacks momentum, the daily MAs are horizontal, so the chance of further trading in a sideways range is high. Resistance is at 115.50. The further support is at 110.80 ahead of 108.50.

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