Next week offers fourth-quarter earnings reports from a number of blue-chip companies and household names. In recent weeks, we have gotten mixed earnings reports from big banks and technology companies. While some companies, such as Wells Fargo (NYSE:WFC) and Alphabet (NASDAQ:GOOGL) blew the doors of their Q4 prints, other companies such as JPMorgan Chase (NYSE:JPM) and Facebook parent company Meta Platforms (NASDAQ:FB) disappointed and saw their stocks badly punished as a result. And while markets have not been as volatile so far in February as they were in January, they have proven to be sensitive to earnings beats and misses.
In the coming days we’ll hear from: a major shopping mall operator, pharmaceutical company, restaurant chain, automaker, entertainment conglomerate, beverage maker, and technology concern. Taken together, their prints could move markets positively or negatively.
Here are seven earnings reports to watch the week of Feb. 7:
- Simon Property Group (NYSE:SPG)
- Pfizer (NYSE:PFE)
- Chipotle Mexican Grill (NYSE:CMG)
- Toyota (NYSE:TM)
- Disney (NYSE:DIS)
- Coca-Cola (NYSE:KO)
- Twitter (NYSE:TWTR)
7 Earnings Reports to Watch: Simon Property Group (SPG)
First out of the gate next week is Simon Property Group, the largest operator of shopping malls in the U.S. SPG stock performed strongly over the last year as its properties reopened to the public after being forced to close for most of 2020. Over the past 12 months, Simon’s share price has gained 57% to now trade at $146.48. However, so far this year, the stock has pulled back 8% among broader market volatility. As a cyclical stock that’s tied to the economy, Simon Property’s fortunes are intertwined with Covid-19 and any renewed lockdown measures. Case in point, in-store shopping at its malls was down 23% the weekend before Christmas as the Omicron variant spread.
For the fourth quarter, analysts expect Simon to report earnings per share (EPS) of $1.44 on revenues of $1.24 billion.
It will be interesting to see how the emergence of the Omicron variant of Covid-19, which occurred right before Thanksgiving last November, impacted Simon Property’s results. A big part of the reason for SPG stock’s run higher last year was that the company’s results were better than in 2019, before the pandemic occurred. In the third quarter of last year, for example, Simon Property’s net income was 25% higher than the third quarter of 2019 when its malls and various properties were fully operational and before Covid-19 arrived on U.S. shores.
Speaking of companies whose fortunes are tied to Covid-19, pharmaceutical giant Pfizer also reports results next week and its earnings will be closely aligned with sales of its Covid-19 vaccine and booster shots. The New York City headquartered company most recently made headlines by requesting that the Food and Drug Administration (FDA) expand the use of its Covid-19 vaccine to children under age five. Should the FDA grant the request, it could open up a new market for Pfizer’s Covid-19 vaccine. To date, more than 90,000 young children have been hospitalized with Covid-19 and at least 1,000 have died from the respiratory disease, according to the Centers for Disease Control and Prevention (CDC).
During its previous earnings report, Pfizer said that it expects 2021 sales of its Covid-19 vaccine to total $36 billion and forecast another $29 billion in vaccine sales this year. Those strong sales figures have helped to lift PFE stock over the last year. The company’s share price has gained 52% in the last 12 months to now trade at $52.86 a share, including a 16% gain over the past six months. With the pandemic lingering and the continuous need for booster shots, sales of Pfizer’s Covid-19 vaccine are expected to remain robust for several more years. A pill the company developed to treat Covid-19 was approved by the FDA last December and shipments have begun to various states.
Wall Street expects Pfizer to report EPS of $7.85 on revenues of $220.18 billion when it reports fourth quarter and full year results on Feb. 8.
7 Earnings Reports to Watch: Chipotle Mexican Grill (CMG)
Shares of Chipotle Mexican Grill have been on the downslope lately. Since the start of this year, CMG stock has fallen 16% to $1,457.7 a share. That brings it performance over the past year to a loss of 2.72%. However, many Wall Street analysts remain bullish on the stock and are recommending investors buy shares on the dip. Investment bank Morgan Stanley (NYSE:MS) recently upgraded Chipotle to an “overweight” rating and raised its price target on the stock to $1,920, saying the share price could rally 30% this year. “We see the recent pullback in shares … as an entry point to own the best in class growth stock in restaurants,” wrote Morgan Stanley in a note to clients.
Morgan Stanley, and others, are bullish on Chipotle’s ability to pass higher costs onto customers, grow its share of the fast food market, and push forward with its digital strategy. Chipotle has been aggressive in recent years about opening new store locations and buying back its own stock. The restaurant chain averages 40 to 50 new locations per quarter, and the new outlets are increasingly being opened in foreign markets where Chipotle has lots of room to grow.
Since 2011, the company has repurchased nearly 10% of its outstanding shares, raising the overall value for existing shareholders. For Q4, Wall Street is looking for Chipotle to report EPS of $5.26 on revenues of $1.96 billion.
When we last heard from Toyota Motor, the Japanese automaker had taken the U.S. sales crown away from General Motors (NYSE:GM) for the first time ever. Until 2021, GM had been the top seller of vehicles in the American market every year since 1931. Supply constraints and a global semiconductor shortage led GM’s U.S. sales to fall 13% last year while Toyota managed to grow its 2021 sales by 10%. Toyota got a boost from sales of its increasingly popular gas/electric hybrid model vehicles. How capturing the U.S. sales title impacts Toyota’s fourth-quarter earnings report will be interesting to see. Also of interest will be an update on the company’s electric vehicle plans.
Despite its victory in the U.S. market, Toyota has not been immune to the impacts of the global semiconductor shortage. The company recently telegraphed that it could face output constraints this year and said that achieving its goal of producing nine million vehicles this year will be extremely difficult. That outlook sent TM stock down nearly 5%, its biggest one-day drop since March 2020 when global stock markets crashed due to the pandemic.
Still, Toyota shares have been one of the best performing so far in 2021. Year-to-date, the stock is up 8% to $200 a share, bringing its 12-month gain to 36%. Analysts expect that Toyota will report Q4 EPS of $4.13 on revenue of $65.9 billion when it reports results Feb. 9.
7 Earnings Reports to Watch: Disney (DIS)
Disney needs a strong quarter. In a big way. DIS stock has been in the penalty box ever since the company badly missed Wall Street expectations for its third quarter and warned that subscriber growth to its Disney+ streaming service is beginning to slow.
Since early November, Disney’s share price has declined by about 20%, and, at $140.5 a share, it is now 30% below its 52-week high of $203.02. Some on Wall Street have labeled Disney a “show me” stock, meaning the company has to prove to investors that it is on the right track and producing strong financial results. Only then will the stock reverse higher.
For its part, Disney will be looking to show investors that it is benefitting from the reopening of its theme parks, a slate of movies that were released in theaters during the autumn months, and popular new content for its Disney+ platform, including a new Star Wars series starring the popular bounty hunter Boba Fett. How it all shakes out will be very telling for DIS stock in the year ahead. A miss, and the stock is likely to sink further. But an earnings beat, and all could be forgiven. It’s instructive to note that Disney stock recently sank nearly 7% in sympathy with Netflix (NASDAQ:NFLX) shares after the streaming rival missed on its quarterly print.
Wall Street expects Disney to report EPS of $0.61 on revenues of $18.63 billion.
Coca-Cola continues to be a reliable investment. KO stock is another of the few securities that is actually up year-to-date despite ongoing market volatility. Since the start of January, Coke’s share price has gained 3% compared with a year-to-date loss of 6% for the S&P 500 index. At its current price of $61.21, Coca-Cola’s stock is up 25% over the past year and bumping up against its 52-week high. Not many other stocks can say the same right now. The key to Coca-Cola’s success has been the economic reopening following the pandemic. As sporting events, movie theaters, concerts and other venues have come back online, Coca-Cola’s sales have rebounded.
While some market observers criticize KO stock as “boring” and “stagnant” and claim the shares basically trade as a bond, some notable investors stand by Coca-Cola and its annual dividend yield of 2.75%, notably Warren Buffett, who has held 400 million shares of Coca-Cola for more than 30 years now and is one of the company’s largest shareholders. Of course it helps that Coca-Cola has grown its dividend for 59 consecutive years. And, to be fair, Coca-Cola has not been a slouch. Through the first three quarters of last year, Coke increased its sales by 20% from the same period a year earlier and its operating profit grew by 30%.
Analysts are expecting Coca-Cola to report fourth-quarter EPS of $0.41 on revenues of $8.96 billion.
7 Earnings Reports to Watch: Twitter (TWTR)
Lastly, we’ll get Q4 results from social media powerhouse Twitter. Like a lot of technology companies, TWTR stock has been pulled down sharply this year. The company’s shares have also taken a hit along with other social media companies following the big earnings miss by Facebook parent company Meta Platforms. Year-to-date, Twitter stock is down nearly 16% at $36.4 a share. The stock is now down 33% in the past 12 months. Shareholders no doubt have their fingers crossed for a better-than-expected earnings report that will help to raise the share price from its current trough.
Twitter is still adjusting to new leadership after its co-founder and longtime CEO Jack Dorsey stepped down late last year and new CEO Parag Agrawal took over. High on Agrawal’s “to do” list is finding new ways to monetize the social media platform. Most recently, Twitter has begun pushing into cryptocurrencies, letting users send and receive tips using Bitcoin (CCC:BTC-USD), and has also begun authenticating users’ non-fungible tokens (NFTs).
Analysts will be watching to see if Twitter’s new ventures are positively impacting the company’s bottom line. Wall Street is forecasting that Twitter will report EPS of $0.35 and revenues of $1.58 billion for the fourth quarter.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.