WORK - This Week's Repertoire
The next act of the real-life soap opera we’ve been living throughout 2020 begins on Monday’s pre-market, when Royal Caribbean Group (NYSE: RCL) is likely to report another quarter of staggering losses. Dow component Home Depot Inc. (NYSE: HD) heads the week’s blue chip earnings schedule on Tuesday while rival Lowe’s Cos. Inc. (LOW) follows on Wednesday. Hot rocket NVIDIA Inc. (NASDAQ: NVDA) and cloud powerhouse Salesforce (NYSE: CRM) will also report this week.
Royal Caribbean
The cruise operator is expected to report a fourth quarter loss of $4.99 per-share after posting a $1.42 profit in the same quarter last year which was the last profitable quarter during which its fleets were out in the sea. In attempt to stay afloat, RCL has gone to the capital markets several times since then and is counting on vaccines to get back in business.
Home Depot
For the fourth quarter, Wall Street analysts are expecting earnings of $2.37 per share on revenues of $27.1 billion. What analysts are wondering is whether the housing market can remain resilient as Home Depot has benefited from a consistent rise in new home construction and home remodeling projects. But despite rising 6.5% year to date, its stock has seemingly hit a wall as shares have traded flat over the past six months, compared to 16% rise in the S&P 500 index. Nonetheless, the home improvement giant has established a strong track record for beating consensus estimates, with profits beating Street forecast in every quarter over the past half of a decade. Wall Street finds that the pandemic environment has created an opportunity for Home Depot to take market share over the next two to three years but the company’s guidance on Tuesday will show how realistic that forecast is.
NVIDIA
On Wednesday, the graphic chip powerhouse is expected to report another strong quarter with analysts predicting a fourth quarter profit of $1.98 per-share on a revenue of $4.82 billion. Its shares have been 14% year to date, surging 88% over the past year, making them one of the better performers in the entire tech sector. Nvidia has a track record of seven straight quarters of earnings beats so investors will focus more on its growth capabilities in key markets for graphics cards, particularly those that are used in video games. It has also taken the lead in chip productions for high-growth areas such as AI, network data-center and autonomous driving so its guidance will be essential in determining whether the stock will succumb to profit taking or continue its way up.
Nikola
Wall Street expects the troubled Nikola (NASDAQ: NKLA) to lose 34 cents per share. This compares to the previous quarter when the loss came to 31 cents per share on zero revenue.The electric truck maker, which aspires to compete with Tesla (NASDAQ: TSLA) in the clean energy auto industry, has suffered from self-inflicting wounds that made many wonder if it can deliver its flagship product, the Badger pickup truck. Aside from a scathing bearish report, alleging widespread deception, Nikola lost a lucrative partnership with General Motors (NYSE: GM). The troubled electric vehicle company seemingly has a tough road ahead with the new CEO Mark Russell scaling back the company’s prior vision or more precisely, the unattainable goals. If the company achieves to instill optimism that its Badger truck will be ready to be driven at any point in 2021, it will be a massive victory for the stock which has plunged 52% over the past six months.
Salesforce
Wall Street expects Salesforce to earn 75 cents per share on revenue of $5.68 billion as its SaaS business model and its customer relationship management services have become must-haves for companies that need e-commerce and analytics to grow their businesses. But since the company announced its $27.7 billion purchase of Slack (NYSE: WORK), its stock has pulled back. With features that allow organizations to collaborate and communicate securely with multiple partners and vendors, including negotiating deals, Salesforce is going up against the titan itself, more precisely, Microsoft’s (NASDAQ: MSFT) enterprise dominance with Office365. On Thursday Salesforce will need to convince the market of how its integration of Slack will accelerate its position as the world’s leading CRM platform.
The busy IPO market has been lulled to sleep as there are no initial public offerings scheduled for this week.
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