End of April is always an interesting time for investors. Why?
Because it’s when most companies release their earnings for the first quarter of the year.
This week pretty much every big US-tech firm and some very large corporations such as Philips or General Electric, will tell us how well (or not) they fared in the first few months of the year.
As always, we’ve presented our community with 2 options per subject and they decided which ones would be more relevant. In case you would like to participate in this, just make sure to follow our Instagram stories on Sunday :)
P.S. and as always please remember that investing comes with risk, even more in times like now where we see increased volatility and overflow of liquidity in markets.
Alphabet Inc.’s, aka Google, earnings are expected to be bright ($15.70 per share vs. $13.48 expected) despite looming antitrust concerns. Similar to previous quarters, the US-tech giant will have benefitted from increased ad revenues, pushing overall sales volumes 25% higher year-on-year. To put a number on this, analysts expect $51.4bn in revenues, and $43.6bn if you remove traffic acquisition.
While the stock has declined following three of the past seven earnings reports, the shares are up 31% in 2021 and over 80% over the last 12 months. 📈
How much upside is there left? We shall see on Wednesday!
While the company has largely done well during the pandemic, with strong sales of the new Mac and iPad, questions have been raised over the iPhone’s supply chain as well as sales in China. During the fiscal year 2020, iPhone sales accounted for about half of the total revenues, so any minor movements in demand can have big impacts.
Overall the shares in the company have only been up 1.2% this year.
A recurring discussion topic on Apple are its nearly $200bn in cash, equivalent and investments. What does it plan to do with all of this money? 💰
The company could make the bullish move and increase cash payment to shareholders (i.e. through higher dividends or a share buyback).
With the latter, Apple could easily boost its EPS. However it would be a rather unusual move by the company, that has been putting its pile of cash to more productive use in the past.
So we compared Daimler to an electric vehicle producer and guess what, the German car producer came out on top. Surprising?
Not so much, given the German multinational, manufacturer of Mercedes-Benz among others, raised its profit outlook for 2021 on Friday. Although the global chip shortage is likely to impact its sales capacity in the second quarter of the year, the company expects margins on the Mercedes cars and van of 10-12%, considerably higher than before at 8-10%.
On top of that, it has seen higher growth than expected coming from China, with sales up 60% there in Q1 2021. It seems that being unable to travel, wealthier Chinese consumers have used their disposable income on luxury items.
Lastly, Daimler finally unveiled the EQS, their electric sedan seen as a potential contender against Tesla. ⚔
Stocks from the wind producing sector have been a popular choice among investors in the last few months. And lately even more as they were given strong tailwinds by Biden's ambitious focus on sustainability and the virtual climate conference. The stock has gained no less than 13.20% last week.
Besides an already strong position in the spanish market with over 700 MW of ongoing orders, the company is expected to grow strongly in the US market.
Let’s see how strong the wind will be blowing for the German company in the coming months.💨
5. General Electric
Lately, the industrial conglomerate has seen its stock price increase although analysts expectations have been falling. While consensus for earnings per share dropped a mere 67% since January, GE’s stock has climbed over 28% over that same period.
But it looks like this time the company’s earnings will determine whether the stock can stay a winner. After over 2 years as a CEO, Larry Culp has done everything he announced. So now the question is, what’s next?
Earnings are likely to be below that the company would have produced in a non-COVID quarter. And with GE typically generating more of its cash flow later in the year, it seems that investors will be more focused on the company’s balance sheet, which has been completely reshaped over the last few years. Away from aircraft-leasing and biopharma business to refocus on strong jet engine business, natural gas and renewable power generation.
So let’s see how much leeway investors will be giving this time. 🚦