3 Stocks To Watch In The Coming Week: McDonald’s, Intel, Ford
Investing.com | Oct 20, 2019 04:06AM ET
With U.S. earnings season in full swing this coming week, investors are relieved that, so far, no major red flags have been raised by corporate America. On Friday, the three major U.S. equity indexes—the S&P 500, Dow Jones and NASDAQ—were each within 3% of July’s all-time highs, driven by positive earnings reports.
This clearly shows the resilience of the U.S. stock market, despite concerns about slowing growth due to the U.S.-China trade war. If U.S. companies continue to beat expectations and the U.S. and China get closer to a resolution of their trade-related dispute, a new wave of optimism could fuel another powerful rally in the markets.
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Below, are our three top stocks to watch for further signs of strength from consumer, industrial and technology sectors:
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McDonald’s (NYSE:MCD), the global fast food chain operator and franchiser, is scheduled to report Q3 earnings on Tuesday, Oct. 22, before the market open. The company is forecast to report $2.21 a share profit on sales of $5.49 billion, according to analysts’ consensus forecast.
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After a powerful rally in the past one year, McDonald's shares are showing signs of peaking. Having finished the week at $208.50, the restaurant operator delivered a small negative return over the past three months as investors move on the sidelines.
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Despite this flat return, MCD’s recent earnings performance provides solid evidence that the company’s technology-driven turnaround is moving ahead at a fast pace. In the quarter that ended in June, the fast food chain posted its most brisk global sales gain in seven years.
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Initiatives such as all-day breakfast, which includes the staple McMuffin, and new products like doughnut sticks are helping to bring customers back. If the company continues to show that it’s succeeding in increasing traffic at its stores while investments in new technologies continue to pay off, we should see share momentum again revive quickly.
h2 2. Intel/h2The world’s largest chipmaker, Intel (NASDAQ:INTC), will also come under sharp scrutiny when it reports Q3 earnings on Thursday, Oct. 24, after the close. The tech giant is expected to report $1.23 a share profit on revenue of $18.02 billion, according to analyst consensus.
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In its last report, Intel was able to surpass expectations on both sales and profit as well as provide an upbeat third-quarter forecast, which showed the chipmaker weathering an industry-wide slowdown due to the China-U.S. trade dispute. In Q2, Intel benefited from rising demand for personal computers, and sales of higher-priced server chips.
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Investors will be eager to see whether the Santa Clara, CA-based semiconductor behemoth was able to sustain that demand surge in Q3. They'll be equally keen to know whether the company is projecting a positive outlook about the rest of the year.
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Intel shares, which closed at $51.36 on Friday, have underperformed the benchmark S&P 500 Index this year, on concerns it will be tough for chipmakers to improve sales if the trade war escalates and China, a major semiconductor market, faces higher tariffs. This coming week’s earnings report could help remove some of that uncertainty.
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Ford (NYSE:F) will release Q3 earnings on Wednesday, Oct. 23, after the market close amid concerns that one of America’s largest automakers is facing hurdles in reviving demand for its cars. Analysts, on average forecast that the company will report $0.26 a share profit on sales of $36.86 billion.
The past few years have been tough for Ford. After many years of rising sales, helped by a robust global economy and consumer demand, Ford is now facing powerful headwinds: it's undertaking an $11 billion restructuring after its net income fell by more than half last year as demand for its sedan cars slowed.
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This turnaround will involve cutting thousands of salaried jobs, closing factories overseas and building capacity to manufacture electric and driverless cars. As Ford undertakes this plan, its shares remain under pressure, trading below $10 since mid-July. The stock rose 2% on Friday to close at $9.29 a share.
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