Earnings playbook: Your guide to a busy week of reports, including Nvidia
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Wall Street is deep into the earnings season, but there are still some major reports on deck. Nearly 50 S & P 500 companies are slated to release their latest quarterly results, including artificial intelligence darling Nvidia , Walmart and Home Depot . Heading into this week, more than three-quarters of S & P 500 names have posted earnings. Of those, 76% have beaten expectations, FactSet data shows. Take a look at CNBC Pro’s breakdown of what’s expected from some of this week’s key reports. All times are Eastern. Tuesday Walmart is set to report earnings before the bell. Management will hold a call at 8 a.m. Last quarter: WMT shares slid on the back of a cautious consumer spending outlook . This quarter: Analysts polled by LSEG, formerly known as Refinitiv, expect the retailer to post slight year-over-year revenue growth. However, earnings per share are expected to fall. What CNBC is watching: Walmart shares are off to a strong start for 2024, rising 8.1%. Can that momentum continue even as inflation persists? Guggenheim analyst Robert Drbul thinks so, noting: “Under Doug McMillon’s outstanding leadership and unique vision, Walmart’s business mix continues to change shape and create a better profit mix versus its historical P & L.” Drbul has a buy rating and a price target of $190, implying upside of 11.5% from Friday’s close. What history shows: Bespoke Investment Group data shows Walmart beats earnings expectations 71% of the time. However, shares have fallen after the past two releases. Home Depot is set to report earnings in the premarket, followed by a conference call at 9 a.m. Last quarter: HD shares rallied on better-than-expected earnings despite home improvement sales moderating . This quarter: Home Depot is expected to report an earnings decline of more than 15% from the year-earlier period, per LSEG. What CNBC is watching: Weather could play a big role in Home Depot’s results, noted KeyBanc analyst Bradley Thomas. “We expect 4Q results to be pressured by unfavorable weather conditions, weaker DIY demand and traffic, and the impact of softer inflationary trends on dollar growth,” wrote the analyst, who has a sector weight rating on the stock. What history shows: Home Depot earnings haven’t missed expectations since mid-2020, according to Bespoke. That said, the stock averages only a 0.3% gain on earnings days. Wednesday Nvidia is set to report earnings after the close. The company is also slated to hold a call at 5 p.m. Last quarter: NVDA posted a stellar quarter, with revenue tripling year over year . This quarter: Analysts expect another monster quarter for Nvidia. LSEG estimates point to earnings per share and revenue growth of more than 400% and over 200%, respectively. What CNBC is watching: Despite the stock’s massive outperformance over the past year, investors will be looking for clues on progress around a China-focused artificial intelligence chip, which is expected to launch later this year . “While a full quarter is not expected to be recognized right away, our estimates see this revenue stream in the region of $12B-$14B in annual revenues and $3-$4 dollars in EPS upside on annual basis,” wrote Piper Sandler analyst Harsh Kumar, who has a price target of $850 on Nvidia and an overweight rating. What history shows: Nvidia shares have risen in three of the past four earnings days, Bespoke data shows. The company also beats profit forecasts 84% of the time. Thursday Warner Bros. Discovery is set to report earnings before the bell. A call between analysts and management will then take place at 8 a.m. Last quarter: WBD reported a bigger-than-expected loss and a decline in ad revenue . This quarter: The media giant’s revenue is expected to have fallen more than 5%, according to LSEG. What CNBC is watching: It has been a rough start to 2024 for Warner, with the stock losing 13.6% on concerns of declining TV ad revenue and further disruption from streaming. However, Deutsche Bank analyst Bryan Kraft, who has a buy rating on the stock and a price target of $20, is optimistic about the company’s future. “We continue to believe in WBD’s ability to succeed in the long-term due to its top-tier content engine and library, sports and news programming, and opportunity to achieve a higher level of operational performance following the merger, especially at its current valuation levels,” he said in a note. What history shows: Warner shares have fallen in three of the past five earnings days, including two double-digit declines, per Bespoke.
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