The earnings season is coming. Over a relatively short period of time, hundreds of companies will release their earnings reports and reveal plans for an upcoming quarter. This week several big names will report their earnings, offering you a chance to capitalize on the share price fluctuations. Today we are taking a closer look at PepsiCo, Delta Air Lines and JPMorgan Chase. All three can be found in the “Stocks” section of the trade room.
PepsiCo
The food giant is expected to report earnings on July 10 before the opening bell. PepsiCo shares have outperformed the industry in the past six months. However, consumer awareness and changing food habits will most certainly negatively affect sales of carbonated drinks in the foreseeable future.
Rated “Sell” by Zacks, it is probably not the best long-term investment. On the other hand, the company can boast history of no negative earnings surprises since at least the beginning of 2014. Positive EPS surprises do not always translate into the soaring stock price, but in most cases, they do. Should PepsiCo report higher than expected earnings once again, its share price can be expected to appreciate, at least in the short run.
Trade Pepsi
Delta Air Lines
The major United States airline will report earnings on July 12 before market open. The company has recently sent a number of contradictory signals to the market. It may look like Delta is doing everything in its power to reward shareholders. Consequently, Delta Air Lines have paid $217 million in dividends and opted for a $325 million-worth share buyback. Lower corporate tax, recently introduced in the United States, is definitely a welcome sight.
At the same time, soaring oil prices can hinder further growth. Over the first six months of 2018, oil shot up 20%. Weather-related delays (the risk that unfortunately cannot be contained by the company itself) have the potential to disrupt operations. Should the company report lower than expected returns, it may very well lose a portion of its value.
Trade Delta
JP Morgan Chase
You, as a trader, may also be interested in following JP Morgan Chase. The company is expected to reveal Q2 2018 earnings on July 13 before the opening bell. The consensus EPS for the quarter is $2.24. The reported EPS for the same quarter last year was $1.82. An impressive result that can turn into a stock price increase — but only if the prediction holds true.
JP Morgan Chase has recently reinitiated its strategic expansion. What does it mean for the company and you as a potential investor? By the end of 2023, the bank is aiming to enter up to 20 new markets and open 400 new branches. As of now, the company seems to be undervalued, which is yet another reason for JPM shares to appreciate.
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