4 of our stocks report earnings next week. Here’s what we want to see from each
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Wall Street’s five-week winning streak came to an end, with the S & P 500 losing 0.42% for the week, while the Dow Jones Industrial Average lost 0.11% and the Nasdaq Composite fell 0.82%. It was a roller coaster week driven largely by inflation data. A hotter-than-expected consumer price index on Tuesday sent stocks reeling, with the Dow posting its biggest drop in a year. Stocks bounced back over the next two days, helped by a softer retail sales report , only to slump again on Friday’s hot producer price index for January. As we said this week, we’re not overly concerned with the hotter-than-expected inflationary readings. One month does not make a trend, plus it shows a resilient economy and buys the Federal Reserve time to gather more data before cutting interest rates. Other notable reports: a weaker-than-expected January industrial production report and much weaker than expected January housing starts number, a decline of 14.8% month over month vs. expectations for a flat month. Earnings season picks back up for the Club next week, with four holdings set to report quarterly results. Overall, results have been solid: Of the 79% of S & P 500 companies that have reported so far, 75% reported an upside earnings surprise, while 65% reported better-than-expected revenue results, according to Fact Set. As a reminder, U.S. markets are closed on Monday, Feb. 19, in observance of Presidents Day. Palo Alto : Expectations are certainly high for this cybersecurity stock, which already made a sizable move up following results from peers Fortinet , Tenable , and Check Point on Feb. 6. All three beat expectations on the top and bottom lines and the consensus numbers for Palo Alto were not updated since then, according to FactSet. As a result, it’s fair to assume that buy-side analysts will be disappointed by anything less than earnings, sales, and guidance all beating expectations. Free cash flow generation is another key watch item, as many analysts use this as the financial metric of choice for valuing Palo Alto. Aside from the numbers, we’re interested to hear about the pace of deal activity and contract lengths, both of which have been headwinds. Contract lengths and deal timing can impact billings — which represent the total amount invoiced in a given period — we increased our focus on the remaining performance obligation (RPO), which includes both billings and the backlog of orders that have not been invoiced yet. It’s not quite as secure due to the potential for cancelations, but still an important indicator of future sales. Shares of Palo Alto are up 24% this year, and nearly 107% over the past 12 months. Nvidia: The chipmaker’s valuation still doesn’t look all that demanding on a forward earnings basis, but the sheer size and speed of the rally we’ve seen in the stock — up nearly 47% this year — means that anything short of a beat and raise is almost certain to be met with a sell-off. Even with those beats, we might still see some profit-taking if the guidance isn’t well above expectations. The good news: The expenditure outlook we got from some of Nvidia’s largest customers — including Amazon , Microsoft , Alphabet , and Meta Platforms — should indeed result in a favorable outlook. A large part of the data center and AI infrastructure spending for these companies is going to Nvidia. Outside of the numbers, we want to hear about China and how the company is navigating export restrictions, along with any updates on the upcoming H200 and B100, both expected for release this year. Bausch Health: As for Bausch Health, we’re not holding our breath. Even if the numbers come in better than expected, we expect the upside to be limited until the legal battle over Xifaxan is resolved (or we get some positive updates at the very least) and there is more certainty on the timing of the monetization of BCH’s Bausch + Lomb stake. Coterra Energy . Management doesn’t set the global prices of oil or gas, so what we’re looking for is execution on things it can control. That means strong production on lower capital expenditure, which indicates production efficiency. Additionally, given the muted natural gas environment, we’re curious to hear if they can shift their focus more toward oil production. Monday, Feb. 19 The NYSE , Nasdaq , and bond markets will be closed. Tuesday, Feb. 20 Before the bell: Walmart (WMT), Home Depot (HD), Axsome Therapeutics (AXSM), Medtronic (MDT), Barclays Bank (BCS), LGI Homes (LGIH), Armstrong World Industries (AWI), Ceragon Networks (CRNT), Tri Pointe Homes (TPH), Camtek (CAMT), Dana Incorporated (DAN), DigitalBridge Group (DBRG), Fluor (FLR), KBR (KBR), Oil States International (OIS), Tactile Systems Technology (TCMD), ALLETE (ALE), Allegion plc (ALLE), CenterPoint Energy (CNP), Equitrans Midstream Corporation (ETRN), Expeditors International of Washington (EXPD) After the bell: Palo Alto Networks (PANW), SolarEdge Technologies (SEDG), Realty Income (O), Teladoc Health (TDOC), Enovix Corporation (ENVX), Caesars Entertainment (CZR), NeoGenomics (NEO), Diamondback Energy (FANG), Medifast (MED), Toll Brothers (TOL), RingCentral (RNG), Ternium S.A. (TX), Celanese Corp (CE), Matterport (MTTR), Amplitude (AMPL), Chesapeake Energy (CHK), CVR Energy (CVI) Wednesday, Feb. 21 2:00 p.m. ET: Federal Reserve meeting minutes released Before the bell: Vertiv Holdings Co (VRT), Medical Properties Trust (MPW), Analog Devices (ADI), Photronics (PLAB), Wingstop (WING), Wix.com (WIX), Global-e Online (GLBE), Exelon (EXC), HSBC Holdings plc (HSBC), Alight (ALIT), Avista (AVA), Bausch + Lomb Corporation (BLCO), HF Sinclair Corporation (DINO), Pagaya Technologies (PGY), Gibraltar Industries (ROCK), Wolverine World Wide (WWW), Garmin (GRMN) After the bell: NVIDIA (NVDA) , Rivian Automotive (RIVN), Etsy (ETSY), Synopsys (SNPS), Lucid Group (LCID), Sunnova Energy International (NOVA), Dutch Bros (BROS), Apache (APA), Marathon Oil (MRO), Suncor Energy (SU), Mosaic Co. (MOS), FNF Group (FNF), Sunrun (RUN), Exact Sciences (EXAS), ANSYS (ANSS), Coeur D’Alene Mines (CDE), DigitalOcean (DOCN), Trip.com Group Limited (TCOM), B2Gold (BTG), Joby Aviation (JOBY), Range Resources (RRC), Alamos Gold (AGI), Jackson Financial (JXN), Nutrien (NTR), Pan American Silver (PAAS), Sm Energy Company (SM), Cheesecake Factory (CAKE) Thursday, Feb. 22 8:30 a.m. ET: Initial Jobless Claims 10:00 a.m. ET: Existing Home Sales Before the bell: Bausch Health Companies (BHC), Moderna (MRNA), Newmont Mining (NEM), Nikola Corporation (NKLA), Cheniere Energy (LNG), Fiverr International (FVRR), Wayfair (W), Pioneer Natural Resources (PXD), Eagle Point Credit (ECC), Lantheus Holdings (LNTH), First Majestic Silver (AG), Builders FirstSource (BLDR), Planet Fitness (PLNT), Grab Holdings Limited (GRAB), Novocure (NVCR), Quanta Services (PWR), NICE (NICE), Dominion Energy (D), Harmony Biosciences Holdings (HRMY), Teck Resources Limited (TECK), Intellia Therapeutics (NTLA), Keurig Dr Pepper (KDP) After the bell: Coterra Energy, (CTRA) , Block, (SQ), MercadoLibre (MELI), Carvana Co. (CVNA), Ardelyx, (ARDX), Booking Holdings (BKNG), Intuit (INTU), indie Semiconductor (INDI), Live Nation Entertainment (LYV), Applied Optoelectronics (AAOI), Vale S.A. (VALE), Copart (CPRT), Insulet (PODD), EOG Resources (EOG), VICI Properties (VICI), Rocket Companies (RKT) Friday, Feb. 23 Before the bell: Warner Bros. Discovery (WBD), Bloomin’ Brands (BLMN), AerCap Holdings N.V. (AER), Docebo (DCBO), Diana Shipping (DSX), NW Natural Holdings (NWN), Calumet Specialty Products Partners, L.P. (CLMT), Frontier Communications Parent (FYBR) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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Jensen Huang, President of NVIDIA holding the Grace hopper superchip CPU used for generative AI at supermicro keynote presentation during the COMPUTEX 2023.
Walid Berrazeg | Lightrocket | Getty Images
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