Tuesday's Market Minute: Corporate Earnings For The Week Of February 14

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With geopolitical tensions mounting and Bullard backlash at the epicenter of market headlines, corporate earnings have been put on the backburner. Now, with more than 70% of the S&P 500 companies having reported their latest quarterly results, 77% of those companies have beaten expectations. According to FactSet, earnings thus far have grown by about 30% on a Y/Y basis.

Today, notable companies Roblox RBLX, Wynn Resorts WYNN, and Viacom are due to report after the closing bell. On Wednesday, Hilton HLT, Kraft Heinz KHC, Shopify SHOP, Barrick Gold GOLD, Applied Materials AMAT, Boston Beer SAM, DoorDash DASH, Marathon Oil MRO, and Hyatt H are expected to report – but all eyes will be on Nvidia Wednesday afternoon.

Investors will be hoping for any signs of a turnaround story after the tech company had a less-than-stellar start to the new year, falling roughly 19% YTD. The weakness has been in part due to broader sell-off in tech stocks on account of an increasingly hawkish Fed, red-hot inflation, and the evaporation of its Arm deal that cost the company a hefty $1.3B. Bears of Nvidia and high-growth tech names alike argue against their sky-high valuations, with Nvidia now trading 74 times its trailing earnings, 46 times forward earnings, and 25 times sales; shares trade at a high valuation relative to the Nasdaq-100. But outside of the murky outlook for the entire Nasdaq as of late, Nvidia’s solid performance over the last 24 months is worth noting. The company has produced consistent growth in its earnings and revenue, while also gaining a whopping 230% over the past couple of years. Even with its recent selling, the chipmaker is expected to produce $7.4B in sales and adjusted earnings of $1.22 in the fourth quarter, signaling 48% and 58% year-over-year growth, respectively. Analysts still predict Nvidia’s earnings have the ability to grow at a CAGR of 39% for the next five years, and bulls will argue its correction has provided the opportunity to buy shares at a substantially cheaper price relative to the past year.

Aside from Nvidia’s fourth quarter numbers, several other companies will be in focus for the remainder of the week. AutoNation AN, Walmart WMT, Yeti YETI, Palantir PLTR, Dropbox DBX, Roku ROKU, and Shake Shack SHAK are expected to report on Thursday, followed by DraftKings DKNG, Bloomin’ Brands BLMN, and Deere DE Friday morning.

Image sourced from Pixabay

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.