The Week Ahead
As we head into the second week of April, investors will be closely watching several key earnings reports, particularly from the financial sector. On Friday, April 12th, three major players - JPMorgan Chase (JPM), Wells Fargo (WFC), and BlackRock (BLK) - are scheduled to report their latest quarterly results.
JPMorgan Chase is expected to be the first of the big banks to report. The company is projected to post earnings per share of $4.21 on revenue of $42.0 billion, according to consensus estimates. Investors will be looking for insights into JPMorgan's performance across its various business lines, including consumer banking, corporate and investment banking, and asset management.
Wells Fargo, which has been on a road to recovery and has been up 51% over the last 12 months. The company is expected to report earnings per share of $1.09 on revenue of $20.1 billion. The bank's progress in resolving regulatory issues and rebuilding customer trust will be key areas of focus.
Investment management giant BlackRock is also set to report on April 12th. The company is forecast to post earnings per share of $9.25 on revenue of $4.6 billion. Analysts will be interested in BlackRock's asset flows, particularly in its iShares ETF business, as well as any updates on the firm's strategic initiatives.
A Look Back
Levi's Shares Jump 12% on Strong Q1 Results, Upbeat Outlook
Levi Strauss & Co. (LEVI) - ★★★ - Ranked #70 in our Q2 Mid & Small Cap Equity Rankings
Shares of iconic denim brand Levi Strauss & Co. (LEVI) surged 12% in pre-market trading on Thursday following the release of the company's first-quarter financial results.
For the quarter, Levi's reported revenue of $1.56 billion, in line with Wall Street expectations. Earnings per share came in at $0.26, also matching analyst forecasts. The strong performance in Q1 led Levi's to raise its full-year guidance for 2024.
Investors appear encouraged by Levi's ability to navigate the challenging retail environment and deliver consistent financial performance. The company's focus on expanding its direct-to-consumer business and growing internationally also appears to be paying dividends.
Paramount Global Stock Soars 14% on Reports of Tentative Skydance Deal
Paramount Global (PARA) - ★★★ - Ranked #50 in our Q2 2024 Mid & Small Cap Equity Rankings
Shares of Paramount Global (PARA) skyrocketed 14% on Thursday after news broke that the media conglomerate's controlling shareholder has reached a tentative agreement to sell her stake to Skydance Media.
According to people familiar with the matter, Shari Redstone, who controls Paramount through her company National Amusements' nearly 80% voting stake, has agreed to sell her shares to Skydance. The two companies have also agreed on the broad framework for a potential combination.
Paramount and Skydance, led by billionaire David Ellison, have entered into a 30-day period of exclusive talks to work out the details of a merger agreement. However, any final deal would still require approval from Paramount's board.
The talks underscore Redstone's willingness to consider selling her controlling position after years of Paramount's struggling stock performance. Shares have declined sharply as the company has lost TV viewers to streaming and invested heavily into its Paramount+ platform.
Ulta Beauty Stock Plunges 15% as CEO Flags Sharper Demand Slowdown
Ulta Beauty (ULTA) - ★★★ - Ranked #62 in our Q2 2024 Large Cap Equity Rankings
Shares of Ulta Beauty (ULTA) plummeted over 15% on Wednesday after the cosmetics retailer's CEO warned of a significant deceleration in growth across the beauty category over the past two months.
Speaking at the JPMorgan conference, CEO Dave Kimbell said Ulta has seen its growth rate come down much faster than anticipated. Just a few weeks ago, the company said it expected a moderation after three strong years, but the slowdown has proven to be more severe.
Kimbell's comments raised concerns about weaker consumer demand for beauty products amid an uncertain economic environment.
The CEO's remarks strike a more pessimistic tone than Ulta's recent fourth quarter report in early March. While Q4 sales rose 10% year-over-year, transactions declined with the average ticket down 1.9%.
Intel Stock Tumbles 8% After Foundry Business Disappoints
Intel – ★★★★ – Ranked #30 in Q2 2024 Large Cap Equity Rankings
Shares of Intel (INTC) fell 8% on Wednesday after the chipmaker disclosed worse-than-expected financial results for its nascent foundry operations. Wall Street analysts expressed doubts about the unit's near-term prospects.
During its investor meeting Tuesday, Intel executives detailed plans to split the company's operations into two businesses:
1. Intel Products unit selling finished chips
2. Intel Foundry unit providing contract chipmaking services
Currently, the Intel Foundry business gets 95% of its revenue from the Products unit itself. Intel Foundry posted a staggering $7 billion operating loss in 2023, worse than the $5.2 billion loss in 2022. Revenue at the unit plunged 31% year-over-year to $18.9 billion.
Spotify Stock Rises 8% on Plans to Raise Subscription Prices
Spotify - ★★★★ – Ranked #37 in Q2 2024 Large Cap Rankings
Shares of Spotify (SPOT) jumped 8% today after reports that the streaming giant plans to increase subscription prices in several markets, including the U.S. later this year. The price hikes signal Spotify's efforts to boost profitability after years of losses from aggressively pursuing growth.
According to people familiar with the matter, Spotify will raise prices by $1 to $2 in the U.K., Australia, Pakistan, Sri Lanka and Ghana this month. Price increases are expected to follow in the U.S. market later in 2024.
This latest round of price increases is seen as a move to help cover the costs of Spotify's expansion into audiobooks. The company began offering 15 hours of free audiobook listening to some subscribers last year, including in the U.S. where an individual subscription costs $10.99 per month.
UnitedHealth and CVS Stocks Plunge On Unchanged Medicare Advantage Rates
UnitedHealth (UNH) – ★★★★ – Ranked #50 in Q2 2024 Large Cap Rankings
CVS Health (CVS) – ★★★ – Ranked #73 in Q2 2024 Large Cap Rankings
Shares of healthcare giants UnitedHealth (UNH) and CVS Health (CVS) tumbled on Tuesday after the Biden Administration announced that final 2025 Medicare Advantage rates will remain unchanged from initial proposals in January.
The Centers for Medicare and Medicaid Services said late Monday that private Medicare Advantage plan reimbursement rates will increase by an average of just 3.7% next year. This matched the rate increase CMS had proposed back in January, disappointing investors who were expecting a larger final rate hike.
Typically, the regulator raises the Medicare Advantage reimbursement rates higher than the initial proposal when releasing the final rates each year. However, this did not occur for 2025, likely due to federal efforts to control healthcare spending growth.
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