AAP - Hot Stocks: INTC gains on strong outlook; AAP dips on dividend and guidance cut; HPE AMBA slide

2023-05-31 12:27:21 ET

The major market averages fell during the intraday session on Wednesday as investors awaited the congressional debt ceiling decision on the last trading day of May.

Looking at the specific stocks, American Airlines Group ( NASDAQ: AAL ) and Intel Corporation ( NASDAQ: INTC ) both rose on the back of a positive Q2 forecast.

Meanwhile, Advance Auto Parts ( NYSE: AAP ) and Hewlett Packard Enterprise ( NYSE: HPE ) both fell due to disappointing results and outlooks.

And Ambarella ( NASDAQ: AMBA ) shares fell after an analyst downgraded the firm due to weak earnings and guidance.

Gainers

American Airlines Group ( AAL ) shares had gained about 2% on raising expectations for Q2 owing to ongoing demand strength, though at midday the stock had given up gains. The airlines anticipated Q2 adjusted operating margin to be approximately 12.5% to 14.5%, up from prior view of ~ 11.0% to 13.0%, and adjusted diluted EPS to be between approximately $1.45 to $1.65 vs. prior outlook of $1.20 to $1.60 and consensus of $1.31.

Intel Corporation ( INTC ) stock rose approximately 4% after the company said it expected revenue to be at the upper end of its range at a TD Cowen conference. "We think, as we kinda look at how things are playing out for the quarter, that we will end up in the upper half of the range that we gave," said CFO David Zinsner. "We gave a range of $12B plus or minus $500M and we think we are on track at $12B to $12.5B as we close out the second quarter."

Decliners

Advance Auto Parts ( AAP ) stock plummeted more than 34% after missing consensus revenue in Q1 , slashing the dividend and lowering its FY2023 forecast. The company cut its dividend by 83% to retain liquidity and lowered FY2023 revenue guidance to $11.2B-$11.3B vs. its prior view of $11.4B-$11.6B and consensus of $11.44B, and its diluted EPS outlook to $6-$6.50 vs. previous estimates of $10.20-$11.20 and consensus of $10.62.

Hewlett Packard Enterprise ( HPE ) shares fell nearly 7% after the company reported mixed second-quarter results and lowered its revenue forecast for the rest of the year. The company predicted Q3 revenue in the range of $6.7B to $7.2B vs. consensus of $7.24B and adjusted EPS in the range of $0.44 to $0.48 vs. consensus of $0.45.

Ambarella ( AMBA ) stock plunged more than 17% after KeyBanc Capital Markets downgraded the company to Sector Weight from Overweight prompted by weak Q1 earnings and a lower-than-expected Q2 revenue projection. Revenue is expected to be between $60M to $64M vs. consensus of $66.79M.

To keep track of Wall Street's biggest winners and losers throughout the session, head over to Seeking Alpha's On The Move section .

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