CWS Market Review – July 26, 2019 Crossing Wall Street

CWS Market Review - July 26, 2019 Crossing Wall Street

Revenue and revenue. That is what this week has been about. This week, ten buying record earnings reviews have been thawed. Luckily, most have been fairly good and helped make up for last week's homicide of Eagle Bank.

Raytheon blew past estimates and raised directions. So did Stryker. Sherwin-Williams gained 20 cents a share. Torchmark wins critiques and announced a change! On August 8, Torchmark becomes International Life and the new ticker is GL.

We even have a bunch of earnings for preview subsequent week. If that's not sufficient, there will probably be an enormous Federal Reserve meeting subsequent week. There's rather a lot to do, so we're shifting into this week's CWS Market Review

Company Ticker Date Estimate Outcome Eagle Bancorp EGBN EGBN EGBN EGBN 19659005] 17-Jul $ 1.12 $ 1.08 Danaher DHR 18 Jul $ 1.16 $ 1.19 Signature Financial institution SBNY July 18 July 18 July 18 ] $ 2.71 $ 2.72 RPM Worldwide RPM 22 -Jul $ 1.14 $ 1.24 Sherwin-Williams SHW 23 Jul 23 Jul 23 Jul 19659005] 6.57 Torchmark TMK 24 Jul $ 1.65 $ 1.67 Verify Level Software CHKP 24 Jul $ 1.37 $ 1.37 19659009] Cerner CERN 24- July $ 0.64 $ zero.66 Stryker SYK July 25 $ 1.94 $ 1.98 $ 1.98 $ 1.98 AFL [19659005] July 25 $ 1.07 $ 1.13 Hershey HSY July 25 $ 1 , 17 $ 1.31 Raytheon RTN RTN 19659005] $ 2.64 $ 2.92 Fiserv FISV 25- July $ 0.81 $ zero.82 Moody & # 39; s MCO July 31 31-Jul 31-Jul 31- Jul Church & Dwight CHD 31-Jul $ 0.52 Cognizant Know-how Solutions CTSH 31-Jul zero.92 Financial BR 1-El $ 1.71 Continental Constructing Merchandise CBPX 0-El $ 49 Interc ontinental change 1-Aug $ 0.92 Disney DIS 6 $ 1.76 Becton, Dickinson BDX BDX BDX $ three.05

Begin RPM Worldwide (RPM) introduced on Monday. This was for the fourth quarter, which led to Might. RPM made $ 1.24 a share through the fourth quarter. That was 10 cents greater than estimates

This was an excellent quarter. Revenue grew 2.8% to $ 1.6 billion. Sadly, they’re dended forex forex, but you really can't keep away from it. The corporate sees its earnings for 2020 at $ three.30 to $ 3.42 per share.

This week was the new high ever in stock. From the top of Might, the RPM for us is 25%. I’m elevating the Buy Under version in RPM to $ 71 per share.

On Tuesday Sherwin-Williams (SHW) stated it made $ 6.57 per share for Q2. This beats estimates of 20 cents per share.

Consolidated revenue for the quarter elevated by 2.2% to $ four.88 billion. The web gross sales of stores longer than a yr elevated by 4.three%. Sherwin had its full-yr EPS steerage of $ 20.40 – $ 21.40 per share. I’m so glad that we appreciated this.

On Wednesday, the inventory broke greater than $ 500 for the primary time. I increase $ 513 per share on Buy Under Sherwin.

There have been three purchasing listing outcome reviews on Wednesday. Prior to Verify Level Software (CHKP) stated it made $ 1.38 a share. It beats estimates of 1 cent per share. Revenue rose 4% to $ 488 million, which was according to expectations.

“Second-quarter results were impacted by our 13% growth in security order revenues, which included the advanced threat prevention and CloudGuard family of products,” stated Gil Shwed, founder and CEO of Verify Point Software Applied sciences.

“Within the second quarter, we continued to increase our product portfolio with new technologies together with Malware DNA, a brand new artificial intelligence-based mostly engine to speed up zero-day menace prevention, and CloudGuard Log.ic, which supplies menace security and context-wealthy info. "

Now for steerage. For the third quarter, the checkpoint sees EPS between $ 1.36 and $ 1.44 in income of $ 480- $ 500 million. CHKP estimates full-yr earnings of $ 5.85-6.25 and earnings between $ 1.94 and $ 2.04 billion. I’m very happy with this store. Verify Level stays a purchase order of as much as $ 120 per share.

After closing on Wednesday, Cerner (CERN) reported earnings of 66 cents per share for the second quarter. It gained the street by two cents a share. The corporate stated its reserves got here in at $ 1.432 billion, which was the highest of their range. Revenue grew 5% to $ 1.431 billion. It was Cerner's expectations.

"I am satisfied with the financial results that were in line with our expectations," stated Chairman and CEO of Cerner Brent Shafer. “Along with robust quarterly working results, we’ve made good progress within the early levels of our conversion and set Cerner on an extended-time period basis for profitable progress. Cerner has played a key position within the digitalisation of healthcare and we consider that our subsequent progress era is because of the large opportunity to assist our clients drive the larger advantages of this digitalization. "

Now we are being guided. Through the third quarter, Cerner expects sales of $ 1.405 billion to $ 1.455 billion and full-yr income of $ 5.650 billion and $ 5.850 billion.

Through the third quarter, Cerner expects earnings per share of 65-67 cents. It's vibrant. Wall Street had anticipated 69 cents a share. Cerner sees full yr earnings between $ 2.64 and $ 2.72 per share. This is identical as the earlier step.

All in all, this can be a good report. Earlier this yr, Cerner reached an agreement with Starboard Worth to pay a dividend and lift $ 1.5 billion in buybacks. Cerner continues to be at $ 76 per share.

Torchmark (TMK) modifications its identify! On August 8, Torchmark turns into Globe Life Inc. The brand new image is GL. I am not usually a name for contemporary corporations, but this isn’t dangerous.

The company says that "the name change is part of a brand alignment strategy that enhances the company's ability to build name recognition to recruit potential customers and agents using a single brand."

For Q2, Torchmark reviews $ 1.67 earnings per share. That was two cents a share above Street.

The info seems fairly good. Internet ROE was 12.three%. Internet revenue from ROE, excluding fastened gadgets, on internet realized positive factors was 14.6%. In the course of the yr, internet earnings per share for Torchmark tasks are $ 6.67-6.77. The current worth is about 14 occasions, though the inventory solely hit the new one. I increase the Purchase Under function from Torchmark to $ 94 per share.

Thursday was an enormous day for us. We had five buying record earnings studies. Let's begin Raytheon (RTN). Earlier than the opening bell, the defense contractor reported excellent leads to the second quarter. For Q2, Raytheon earned $ 2.92 per share. It beat the Wall Street consensus at $ 2.64 per share.

Raytheon additionally added yr-round steerage. The previous steerage was from $ 28.6 billion to $ 29.1 billion in gross sales and $ 11.40 to $ 11.60 per share. Based on the brand new tips, sales are $ 28.6 billion and $ 29.1 billion and earnings per share are $ 11.50 – $ 11.70.

Raytheon can also be assisted by a serious defense spending invoice just lately permitted by Congress. Shares rose greater than 4.5% on Thursday. I'm elevating my buy under Raytheon for $ 195 a share. In response to the corporate, the United Technologies merger is predicted to shut in the first half of next yr.

Hershey (HSY) was an excellent quarter, however the control was not that nice. For Q2, the chocolate firm earned $ 1.31 per share. It was up 14.9% and beat the street by 14 cents a share. With this type of achieve, you possibly can anticipate an enormous increase in steerage. Sadly, we didn't get it.

On the plus aspect, I discover that the gross margin revised up was 46.5% within the second quarter. This is up from 44.5% within the second quarter last yr. Internet natural foreign money sales grew 1.Eight%.

Hershey expects sales to grow 2% this yr. Previous steerage was 1% – three%, so not a lot change. Hershey additionally expects earnings for 2019 to be $ 5.68 and $ 5.74 per share. That's a 5 cent improve on the low end. That is after a 14 % return.

On Thursday, Hershey opened sharply decrease, but the inventory subsequently returned deep and rose to a brand new high earlier than closing. I increase Howshey's Buy Under function to $ 155 per share.

AFLAC (AFL) stated they made $ 1.14 a share for Q2 and foreign exchange threw a penny a share. The CEO stated the duck is able to buy again $ 1.three – $ 1.7 billion this yr.

AFLAC did not increase the rules a lot, however they stated the earnings ought to be above the present vary of $ four.10. $ four.30 per share. That is based mostly on a mean change fee of 110.39 yen to the greenback. I increase the Purchase service to lower than $ 57 per share.

Stryker (SYK) reported Q2 earnings of $ 1.98 per share, which was 4 cents better than expected. This is 12.5% ​​greater than a yr in the past. Previously, the corporate had given us earnings steerage of $ 1.90 to $ 1.95 per share. Within the second quarter, natural revenue grew by Eight.5% and operating margin increased to 25.9%. That's pretty good.

I used to be also pleased to see Stryker saying his 2019 steerage. The company estimates that natural sales for the complete yr will improve 7.5% to 8.0%. The corporate expects earnings to be between $ Eight.15 and $ Eight.25 per share. The previous vary was $ Eight.05- $ Eight.20 per share.

This can be a very robust inventory set. I increase $ 223 per share on Purchase Alle Stryker.

Fiserv (FISV) reviews a Q2 results of 82 cents per share. It was a penny better than expected.

This was a very good quarter for Fiserv and essential because the CEO had stated that Q2 is a "low watermark" for revenue progress. Additionally they stated that First Knowledge acquisition would shut on July 29. Fiserv also repeated the complete-yr EPS vary of $ 3.39 to $ three.52


Six earnings studies subsequent week

Next week there are six earnings studies. Three might be on Wednesday, July 31st (CHD, MCO, CTSH) and three others on Thursday, August 1st (BR, CBPX, ICE).

In April Church & Dwight (CHD) released a reasonably good earnings report. The buyer goods company estimates 4 cents per share. I was delighted that gross margins would improve by 20 foundation points to 45.1%. Operating revenue margins elevated 120 basis factors to 23.1 %

CHD repeated the complete-yr EPS steerage of $ 2.43-2.47. This is 7-9% more than final yr. For Q2, CHD expects earnings of 52 cents per share.

Moody's (MCO) additionally had a very good Q1 outcome report. In April, the credit rating agency reported $ 2.07 earnings per share. It beats estimates of 14 cents per share.

Moody's Analytics income grew 16%. The corporate's full-yr forecast was $ 7.85-Eight.10 per share. Moody's remains our most profitable stock this yr, with a YTD achieve of 43.four%. Wall Street expects Q2 earnings of $ 2.01 per share.

I’m very curious to hear what Cognizant Know-how Solutions (CTSH) says Q2-end result report. Their Q1 report was horrible. Wall Street anticipated $ 1.04 per share. As an alternative, CTSH acquired 91 cents per share. The stock fell 18% in two days.

Info also cuts its forecast for the yr. Previously, the company anticipated EPS of no less than $ 4.40 this yr. Now, they see it fluctuate between $ three.87 and $ 3.95.

Where was the weak spot? Apparently, the banking sector has not spent as much. Monetary Providers, which accounts for a few third of its income, declined 1.7%. Karen McLoughlin, CFO, stated: "Our revised full-year outlook reflects first-quarter deficits and expectations of slower growth in financial services and health care for the remainder of 2019."

Consciousness has progressively returned to about half of what it misplaced within two days of trading. Wall Street expects 92 cents a share.

Broadridge Financial Solutions (BR) acquired a very good report in Might (their tax policy three), but the company gave a number of directions. The corporate lowered its full-yr income progress forecast from three % to five % to about 1 %.

BR repeated its full-yr EPS progress from 9% to 13%. Final yr the corporate made $ four.19 a share, so the present outlook is $ 4.57 to $ 4.73 a share. In the course of the first three quarters, Broadridge earned $ 2.94 per share. This represents a This fall result of $ 1.63 and $ 1.79 per share.

The CEO stated: "After the third quarter, Broadridge is in a very good position to produce strong full-year results." BR is now a 40% winner this yr. I'll in all probability increase the Buy Alle worth, but first I need to see the earnings figures.

Continental Constructing Products (CBPX) has been uncommon this yr. The earnings studies have been quite good, but the inventory has not achieved a lot.

Three months ago, a wall firm announced it was making 42 cents a share for Q1. That was eight cents greater than anticipated. Internet sales elevated four.5% to EUR 122 million. To the greenback, and the mural grew 5.5% to $ 649 million. Continental's first-quarter earnings have been up 16.7% on the earlier yr. Working revenue increased by 11.three%.

For Q2, Wall Street expects earnings of 49 cents per share. They need to have the ability to overcome it.

Intercontinental Change (ICE) did properly throughout Q1. The change operator made 92 cents per share. That was two cents greater than Wall Street had anticipated. Their adjusted working margin was 58%. Cash circulate from working actions elevated 14% from last yr.

ICE shares began slowly this yr, however inventory has picked up steam after the spring. ICE set a brand new high of 52 weeks final week. For Q2, Wall Street expects 92 cents a share.

Earlier than I’m going, Smucker (SJM) raised the quarterly dividend from 85% to 88 cents a share. The brand new dividend might be paid on September 3 to report shareholders on August 16. SJM's yield is close to three.11% close to Thursday.

All the things is now. There might be many extra studies subsequent week. There’s additionally an enormous Fed meeting on Tuesday and Wednesday. The political assertion will probably be released at 2 pm on Wednesday. I feel we're seeing a 25 level reduce, but I'm not constructive. Then on Friday we get the July job report. The June report added 224,000 internet jobs, and the unemployment price rose three.7%. Be sure to all the time replace your blog. I'll offer you extra market analysis in the next difficulty of CWS Market Review!

– Eddy

Posted by Eddy Elfenbein on July 26, 2019 at 7:08 pm

The knowledge in this weblog submit displays my views solely and does not represent a suggestion for any specific security or funding. My or our affiliates might maintain positions or other interests within the securities listed on the Blog, see my disclaimer on my web page 47% in the final 13 years. (Extra)