Stock Market Investing Action Plan

After a good drubbing over the past week (or three), maybe it’s time to let March part the bears and bulls for a couple weeks and do what it does best: come in like a lion. The stock market’s loss in February is thus far modest, especially after such a strong start to the year. And a week likely to reveal Tesla‘s (TSLA) new master plan, Target (TGT) earnings, a look into China’s EV markets and reports from some key artificial intelligence players may just launch the month on the right paw.

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Stock Market Watch: Seeking Relative Strength

At the same time, with the stock market rally coming under increasing pressure, investors should look for stocks showing relative strength. Toll Brothers (TOL), Booking Holdings (BKNG), Textron (TXT), General Electric (GE) and SPS Commerce (SPSC) all boast relative strength lines at or near highs. Toll Brothers, Booking and Textron are all testing support near buy points, and in possibly firming markets. GE and SPS Commerce are also testing short-term support. Both are in buy zones, although GE would do well to consolidate a bit longer, rather than break out from such a short and disproportionate handle. SPS gave back a 7% gain, putting investors on notice in case it breaks toward lower ground.

Economic Calendar: Looking For Signs Of Cooling In February

After a red-hot January for the U.S. economy, data in the coming week will provide some clues as to whether that strength held up in February. The Institute for Supply Management’s manufacturing survey index is slated for Wednesday at 10 a.m. ET, followed by the ISM service-sector gauge on Friday at 10 a.m. In retrospect, the ISM service index surging back into expansion territory in January telegraphed the strong spending and new home sales data that followed. Since the February employment report isn’t due out until March 10, the ISM reports will also help set expectations for job gains.

The Fed’s Key Inflation Rate Just Heated Up; S&P 500 Falls As Rate-Hike Odds Jump

Also on the calendar: durable goods orders, out Monday at 8:30 a.m., will shed light on capital spending trends. Pending home sales, Monday at 10 a.m., will provide an early read on January sales of existing homes ahead of the drawn-out closing period. The Conference Board’s Consumer Confidence Index is out Tuesday at 10 a.m.

Tesla: Investor Day And The ‘Master Plan 3’

Tesla is set to hold its investor day Wednesday, with CEO Elon Musk teasing plans to present his “Master Plan 3” at the event. Analysts say they know few details, and many doubt there will be any new product announcements. Musk says his “Master Plan 3” is about a “path to a fully sustainable energy future for Earth.”

The Tesla CEO on Wednesday said it will be an investor day that is not just for Tesla investors but for investors “in Earth.” Musk added March 1 will be about “explaining how we get to a fully sustainable energy future and that people should have optimism and hope for the future.”

Meanwhile, Tesla’s first Master Plan, revealed in August 2006, presented the company’s goal: build a wide range of EVs. Around 10 years later, Musk revealed his second “Master Plan,” which focused on self-driving capability and battery energy storage systems. Bernstein analyst Toni Sacconaghi wrote Wednesday the most important issue for Tesla going into its March 1 investor day is the status of its next-generation, lower cost vehicle platform.

No Product Launch Expectation

“We/investors have no expectation for a product announcement, but incremental detail on pricing, offering and especially timing is most important,” Sacconaghi wrote.

Additionally, Deutsche Bank wrote Thursday that it expects Tesla will introduce the lower-cost third generation vehicle platform. The firm also wrote that the EV giant will speak about the role of in-house battery manufacturing technology. Also capacity expansion and actions to secure raw materials — including lithium.

However, some pomp and circumstance could surround the Cybertruck, which the company says will arrive in 2023. The oft-delayed truck will begin “early production” in midyear, according to Musk. Meanwhile, TSLA shares appear to be forming a handle of some sort. If Tesla stock consolidates until March 1, a breakout then would likely involve clearing the 200-day moving average. “All eyes are on TSLA’s upcoming investor day on March 1 and we note that TSLA shares have tended to run up ahead of such events in the past,” CFRA analyst Garrett Nelson recently wrote.

Dow Earnings: Wrapping Up The Q4 Season

Salesforce.com (CRM) reports Wednesday, with analysts calling for a 62% earnings gain and a 9% improvement in revenue. The software heavyweight’s earnings turned up last quarter, after restructuring costs contributed to a four-quarter decline. The stock is up 24% so far this year, still deep in a correction, but sitting below a handle buy point in a bottoming base. The report will pretty much wrap up the season for the Dow industrials, leaving only Nike (NKE) to deliver its fiscal Q3 numbers later in March.

Retail Earnings: Target, Lowe’s, Macy’s Deadline Retail Reports

Target and Lowe’s follow the prior week’s earnings from cohorts Walmart (WMT) and Home Depot (HD). Target expectations for Tuesday are low, with analysts eyeing both earnings and revenue declines. On Wednesday, Lowe’s sets sights on a 24% earnings increase and a 6.5% advance in revenue. Others to report include Macy’s (M), Ross Stores (ROST), Kohl’s (KSS), Dollar Tree (DLTR) and Costco Wholesale (COST). 

China EV Makers: A peek into post-Covid China

Li Auto (LI) and Nio (NIO) plan to report fourth-quarter earnings early Monday and early Wednesday, respectively. The Chinese electric-vehicle startups have already disclosed double-digit gains in their Q4 deliveries, as China’s Covid-fueled supply headwinds eased and new models ramped up. Year over year, Li Auto is expected to grow EPS by a penny to six cents on a 54% revenue gain. That follows two straight quarters of losses. Nio is expected to widen losses to 26 cents per share from 17 cents a year ago, despite a 63% revenue jump.

Stock Market Reports: AI leaders Set To Report

Investors will receive a closer look at the white-hot AI market as software developers C3.ai (AI) and Veritone (VERI) report earnings on Thursday. For C3.ai, losses are expected to widen. Analysts see Veritone turning positive after three straight declines. AI technologies, in general, favor the bigger companies with deeper pockets and access to more data. C3.ai and Veritone stocks both posted heavy losses in 2022. But the stir caused by OpenAI’s ChatbotGPT, followed by Microsoft‘s (MSFT) Sydney and other possible competitors has energized the space. Veritone stock has gained 34%, C3 has soared 99%, since Dec. 30.

Stock Market Earnings: Feb. 27 — March 3

Monday

Occidental Petroleum (OXY) announces Q4 financials late Monday. The Warren Buffett-backed energy company is expected to see EPS grow 22% to $1.81, according to FactSet. Wall Street projects revenue increasing 6% to $8.37 billion. Meanwhile analysts expect full-year earnings ballooning 279% to $9.68 per share with sales advancing 43% to $37.09 billion. OXY is on a run of six straight quarterly profits after six consecutive quarterly losses between Q4 2019 and Q1 2021.

Workday (WDAY) reports Q4 earnings late Feb. 27, with analysts estimating a 14% rise in profit to 89 cents a share. The enterprise software maker’s revenue is expected to climb 18% to $1.63 billion. Workday has expanded from human capital management software into financial products.

Range Resources (RRC) reports fourth-quarter financials after the stock market closes Monday. Wall Street forecasts earnings for the oil and gas exploration company growing 23% to $1.18 per share with revenue increasing 9% to $934 million. For the full year, analysts expect EPS to shoot up 148% to $5.00 and sales to advance 36% to $3.67 billion. RRC earnings leapt up on average 295% over the last three quarters boosted by increased oil and gas prices.

Heico (HEI) earnings and revenue are seen rising for the seventh quarter in a row when it announces its Q1 results Monday afternoon. Analysts see adjusted earnings increasing 9.5% to 69 cents per share on 20% revenue growth to $588 million. HEI stock is trading just above the buy zone for a cup-with-handle base.

Early Tuesday

For fourth quarter results Tuesday morning, analysts expect Norwegian Cruise Line (NCLH) to report a narrower loss as sales rise for the sixth consecutive period. Stock market watchers forecast Norwegian to post a loss of 86 cents per share, improving from a loss of $1.95 per share last year. Revenue is seen skyrocketing 208% to $1.5 billion. NCLH stock is trading in a cup-with-handle base with an 18.64 buy point.

Builders FirstSource (BLDR) checks in on Tuesday, riding analyst estimates for both revenue and earnings declines. But outlook will be key, with a rising number of analysts calling a bottom to the housing market decline. The stock has climbed more than 50% since October, and sits just below a handle buy point in a yearlong base.

Advance Auto Parts (AAP) and AutoZone (AZO) both report early Tuesday. Advance Auto should post a nearly 17% EPS gain and AutoZone an almost 14% EPS increase. But sales growth remains anemic for both auto parts retailers, in the low to mid single digits.  

Late Tuesday

First Solar (FSLR) reports fourth-quarter results after the stock market close Tuesday. The solar power components maker is expected to report a loss of 17 cents, vs. a profit of $1.23 a year ago. The consensus on revenue is $1 billion, up 10%. On March 14, an Evercore ISI analyst issued a downgrade on First Solar stock but also upped his price target, saying business at the company is at its best ever. However, capacity for First Solar is largely sold out through 2025-2026. “With current manufacturing volume expansion already factored into our model, we are beginning to see the benefits of the Inflation Reduction Act and its production tax credit provisions being largely reflected in the current FSLR share price.”

Scottsdale, Ariz.-based Axon Enterprise (AXON) reports Q4 earnings late Tuesday. Analysts estimate EPS of 51 cents, up nearly 11%, with revenue growth of 40% to $306 million. Axon sells nonlethal Taser guns, body-worn cameras and cloud-based software for managing police evidence.

AMC Entertainment (AMC) losses are expected to widen for its fourth quarter earnings results late Tuesday. Analysts forecast AMC to post an adjusted loss of 20 cents per share, compared to a loss of 16 cents last year. Revenue is expected to fall 10.3% to $1.05 billion after three quarters of declining growth.

Supernus Pharmaceuticals (SUPN) is on deck to report its fourth-quarter earnings after the stock market closes Tuesday. Analysts project adjusted earnings of 67 cents per share on $180.3 million in sales. Earnings would skyrocket a quadruple-digit percentage as sales rise 13%.

Rivian (RIVN) reports late Tuesday. Analysts expect the Amazon (AMZN)-backed EV startup to trim Q4 losses to $1.96 per share. Revenue is seen vaulting 1,250% to $729 million as production and deliveries of its initial vehicles ramped up.

Wednesday

Weibo (WB) reports quarterly results early Wednesday, with analysts expecting earnings to drop 36% to 53 cents a share, with revenue climbing 36%, for the China-based social networking company.

Splunk (SPLK) reports fourth-quarter results late Wednesday. The consensus on earnings is $1.14, a jump of 73%, with revenue climbing 19% to $1.07 billion, for the data analytics company. First Solar stock has formed a cup with handle.

Collectibles giant Funko (FNKO) is expected to post its third quarterly loss in two years when it reports Q4 earnings results late Wednesday. Wall Street forecasts Funko to report an adjusted loss of 9 cents per share, compared to adjusted earnings of 38 cents last year. Sales are seen dipping nearly 6% to $316 million.

Box (BOX) reports earnings late Wednesday. Analysts expect a 29% jump in earnings to 24 cents, with revenue climbing 75% to $237 million, for the provider of content management and collaboration services.

American States Water (AWR) earnings are seen leaping 40% to 82 cents per share for Q4 results late Wednesday, bucking three consecutive quarters of declines. Revenue is expected to jump 22.6% to $142.6 million after four quarters of sales declines. AWR stock is in consolidation.

Jazz Pharmaceuticals (JAZZ) will report its fourth-quarter earnings late Wednesday. Wall Street expects adjusted earnings to grow more than 6% to $4.48 per share and for sales to increase almost 9% to $975 million.

DoubleVerify (DV) reports earnings after the stock market close on March 1. Analysts expect a 21% drop in profit to 19 cents amid higher investments Revenue will climb 26% to $132.8 million, analysts estimate. The company provides digital advertising verification services.

Thursday

Best Buy (BBY) will report its fiscal fourth-quarter results early Thursday. Analysts see the consumer electronics retailer earning $2.10 a share, down 23% year over year, on sales of $14.7 billion, down 10%.

Broadcom (AVGO) will release its fiscal first-quarter results late Thursday. Wall Street expects the chipmaker to earn $10.18 a share, up 21% year over year, on sales of $8.9 billion, up 15%.

Marvell Technology (MRVL) plans to post its fiscal fourth-quarter earnings late Thursday. Analysts see the chipmaker earning 46 cents a share, down 8% year over year, on sales of $1.4 billion, up 4%.

Kroger (KR) delivers Q4 results Thursday morning, with analysts targeting the company’s first earnings decline in eight quarters. Revenue is seen rising 6%, the slowest growth in six quarters. Investors will be particularly interested in details on the company’s planned $24.6 billion merger with Albertsons (ACI), announced in October.  

Hewlett Packard Enterprise (HPE) reports fiscal Q1 earnings after the stock market close on March 2. Analysts project EPS of 54 cents, up a penny from a year earlier. Revenue will climb nearly 7% to $7.43 billion, analysts estimate.

AnheuserBusch InBev (BUD) is due early Thursday. Wall Street forecasts a 10% EPS decline for the Budweiser maker despite a nearly 8% revenue gain.

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