3 Stocks To Watch In The Coming Week: Tilray, Walmart, NVIDIA
Investing.com | Nov 10, 2019 09:35
The past week saw U.S. stock markets continue their upward move with all the major indices finishing at record levels, boosted by optimism of a U.S.-China trade deal. The S&P 500 was higher for a fifth week, up 0.9%, now up about 1.8% so far for November.
But that strength might be on weak footing after media reported that U.S. President Donald Trump hadn’t agreed to make tariff removal part of his deal with China. Nonetheless, the tariff rollback is what China wants before signing a deal, potentially presenting a major roadblock to any trade deal.
Along with these maco risks, investors will also be digesting some important earnings releases this coming week. Here are three that could have key implications:
The Nanaimo, British Columbia-based cannabis producer, Tilray (NASDAQ:TLRY) is scheduled to announce its fiscal 2019, third-quarter earnings after the market close on Tuesday, Nov. 12. Consensus expectations call for sales of $49.39 million, with a -$0.30 per share loss.
In August, Tilary reported a wider-than-expected EBITDA loss for the second quarter. Although revenue of $45.9 million was more than the consensus estimate of $40.3 million, investors still punished the stock, focusing on the $17.9 million loss before interest, taxes, depreciation and amortization.
Tilray said the higher loss was due to rising operating costs related to growth initiatives, interest expense from its convertible notes, recent acquisitions and the expansion of its international operations.
The stock, which hit a high of $300 in September of 2018, is one of the biggest boom-and-bust stories in the cannabis sector where share values have plunged this year, as hype created by legalization of marijuana in Canada waned and investors shifted their focus to sales and widening losses. When Tilray announces its earnings this coming week, that will be the key concern.
Shares of Tilray closed at $23.42 on Friday, down about 70% this year, giving the company a market cap of close to $2.3 billion. That valuation could come under closer scrutiny if the company fails to show a major improvement in sales.
h2 2. Walmart/h2Despite a myriad of political and global trade uncertainties, U.S. consumer confidence remains strong. That strength could once again benefit America’s largest retailer, Walmart (NYSE:WMT). The big-box retailer is expected to report earnings on Thursday, Nov. 14 before the market opens. Consensus anticipates EPS of $1.09 on revenue of $128.57 billion.
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With the expectation the Bentonville AR-based retailer will report strong quarterly earnings and growing online sales, investors have pushed WMT shares up 28% this year. The stock closed down 0.7% on Friday at $119.44.
In its previous report, Walmart continued showing investors it is well positioned to take advantage of stronger consumer spending amid the country's ongoing, low unemployment rate.
The mega-retailer reported in August that comparable sales at its U.S. business rose 2.8% from a year earlier. That growth was quite strong when taking into account the fact that it came on top of a 4.5% increase in the same period last year, which was Walmart’s best quarterly comparable sales growth in more than a decade.
Comparable sales and Walmart's online expansion will be the two critical numbers investors should focus on.
h2 3. NVIDIA/h2Also on Thursday, albeit after the close, one of the world’s largest chipmakers, NVIDIA (NASDAQ:NVDA) will release its Q3 earnings. Analysts are expecting the company to report $1.58 a share profit on sales of $2.92 billion.
The semiconductor sector is going through a cyclical downturn as chip demand wanes and the U.S.-China trade war threatens the future growth outlook of chipmakers. As such, investors will be keeping an eye on NVIDIA revenue and performance, particularly in its gaming and data centers segments.
In August, NVIDIA topped analysts’ expectations for its second quarter sales and profit on signs that demand was improving for graphics chips and parts used in data centers. Chief Executive Officer Jensen Huang has argued that a slowdown in orders for computer-gaming chips and processors for artificial intelligence tasks was temporary as customers worked through high inventory levels.
Investors have been bidding up NVIDIA shares since August on these positive developments. This coming week's earnings report could provide additional impetus to the rally. Shares closed at $207.78 on Friday, up more than 55% this year.
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