3 Stocks To Watch This Week: Caterpillar, PayPal, Moderna
Haris Anwar | Jul 31, 2022 07:48AM ET
- Caterpillar has warned that its earnings might get hurt due to the weakening demand in China.
- PayPal has been among the worst-hit technology stocks this year, losing 50% of its worth.
- Moderna is facing revenue uncertainty as demand for vaccines declines globally.
Equity investors should brace for another busy week as some of the largest U.S. companies report quarterly earnings amid optimism that the worst of this year’s market selloff is behind us.
The S&P 500 soared 4.3% for the week and 9.1% in July, the best monthly advance since November 2020. Investors accelerated their purchases of beaten-down stocks after Federal Reserve Chairman Jerome Powell raised rates by 0.75 percentage point last week and suggested the pace of hikes might slow later this year.
Earnings from U.S. companies, however, have shown a mixed trend. While Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) posted better-than-expected results last week, playing a major role in reversing sentiment, some smaller companies are struggling as they try to contain costs amid slowing sales.
Shares of Roku (NASDAQ:ROKU) plunged 23% after the company missed estimates and warned of a slowdown in advertising. Chipmaker Intel (NASDAQ:INTC) dropped about 9% after its quarterly results fell short of expectations.
This week, investors will get a look at quarterly earnings from some of the country's largest companies. Below are three stocks from various sectors that are worth focusing on:
1. Caterpillar
Caterpillar (NYSE:CAT), which is seen as an economic bellwether, is scheduled to report its second-quarter earnings on Tuesday, Aug. 2, before the market open. The maker of construction and mining equipment will likely report a $3.01-per-share profit on sales of $14.28 billion, according to analysts’ consensus forecast.
The Deerfield, Ill.-based company warned in April that its earnings might be hurt by weakening demand in China due to nationwide COVID-19 lockdowns that had undermined economic growth.
Source: Investing.com
Despite weakness in China, CAT stock has been able to avoid the worst fallout from the recent market rout due to strong post-COVID demand for mining and construction equipment in other parts of the world.
Still, Caterpillar's upcoming earnings should provide insight on the current state of investment in these sectors, especially given increased recession risk after interest-rate hikes.
CAT stock, which closed Friday at $198.25, has weakened 4% this year, outperforming the benchmark S&P 500 Index, which declined 13% during that same period.
2. PayPal Holdings
Payment-processing giant PayPal Holdings (NASDAQ:PYPL) will also report its Q2 earnings on Tuesday after the markets close. Analysts, on average, expect the company to post $0.8683 a share profit on sales of $6.77 billion.
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PayPal has been among the worst-hit technology stocks this year as its former parent company eBay (NASDAQ:EBAY) continues to move payments away from PayPal's platform and more consumers return to in-store shopping following the pandemic-driven boom over the past two years. PayPal stock, which closed on Friday at $86.53, has lost more than 50% of its value this year.
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