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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 purchasing record earnings reviews have been thawed. Fortuitously, most have been pretty good and helped make up for final week's homicide of Eagle Bank.

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

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

Firm Ticker Date Estimate End result 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 Point Software program CHKP 24 Jul $ 1.37 $ 1.37 19659009] Cerner CERN 24- July $ zero.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 $ zero.81 $ zero.82 Moody & # 39; s MCO July 31 31-Jul 31-Jul 31- Jul Church & Dwight CHD 31-Jul $ zero.52 Cognizant Know-how Solutions CTSH 31-Jul zero.92 Financial BR 1-El $ 1.71 Continental Building Products CBPX zero-El $ 49 Interc ontinental trade 1-Aug $ zero.92 Disney DIS 6 $ 1.76 Becton, Dickinson BDX BDX BDX $ three.05

Begin RPM Worldwide (RPM) announced 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 more than estimates

This was an excellent quarter. Revenue grew 2.Eight% to $ 1.6 billion. Unfortunately, they have been chosen for a bit of Forex, however you actually can't avoid it. The corporate sees its earnings for 2020 at $ 3.30 to $ three.42 per share.

This week was the brand new high ever in inventory. From the top of Might, the RPM for us is 25%. I am elevating the Buy Under model 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 shops longer than a yr increased by 4.3%. Sherwin had its full-yr EPS steerage of $ 20.40 – $ 21.40 per share. I am so glad that we appreciated this.

On Wednesday, the stock broke more than $ 500 for the primary time. I increase $ 513 per share on Purchase Under Sherwin.

There were three purchasing listing end result reviews on Wednesday. Previous to Verify Level Software (CHKP) stated it made $ 1.38 a share. It beats estimates of one cent per share. Revenue rose four% to $ 488 million, which was in keeping with 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 Examine Level Software Technologies.

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

Now for steerage. For the third quarter, the checkpoint sees EPS between $ 1.36 and $ 1.44 in revenue 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 retailer. Verify Level stays a purchase of up to $ 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 came in at $ 1.432 billion, which was the top of their vary. Income 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 operating results, we now have made good progress in the early levels of our conversion and set Cerner on an extended-term basis for worthwhile progress. Cerner has performed a key position within the digitalisation of healthcare and we consider that our next progress era is because of the large alternative to assist our clients drive the higher benefits of this digitalization. "

Now we’re being guided. In the course of 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.

In the course of the third quarter, Cerner expects earnings per share of 65-67 cents. It's vibrant. Wall Street had expected 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 Value to pay a dividend and raise $ 1.5 billion in buybacks. Cerner continues to be at $ 76 per share.

Torchmark (TMK) modifications its identify! On August Eight, Torchmark becomes Globe Life Inc. The brand new symbol is GL. I’m not usually a reputation for modern corporations, but this is not 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 stories $ 1.67 earnings per share. That was two cents a share above Street.

The info appears fairly good. Internet ROE was 12.three%. Internet revenue from ROE, excluding fastened gadgets, on internet realized positive factors was 14.6%. Through the yr, internet earnings per share for Torchmark tasks are $ 6.67-6.77. The present worth is about 14 occasions, although 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 purchasing record earnings stories. Let's begin Raytheon (RTN). Before the opening bell, the protection 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 sales and $ 11.40 to $ 11.60 per share. In line with the 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 protection spending bill just lately accepted by Congress. Shares rose more than four.5% on Thursday. I'm raising my purchase under Raytheon for $ 195 a share. In line with the company, the United Technologies merger is predicted to close in the first half of next yr.

Hershey (HSY) was a very good quarter, however the management was not that great. 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’ll be able to anticipate an enormous increase in steerage. Unfortunately, we didn't get it.

On the plus aspect, I find that the gross margin revised up was 46.5% within the second quarter. This is up from 44.5% within the second quarter final yr. Internet natural foreign money sales grew 1.8%.

Hershey expects sales to develop 2% this yr. Earlier steerage was 1% – 3%, so not a lot change. Hershey additionally expects earnings for 2019 to be $ 5.68 and $ 5.74 per share. That's a five cent improve on the low finish. This is after a 14 % return.

On Thursday, Hershey opened sharply decrease, but the stock 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 forex threw a penny a share. The CEO stated the duck is able to purchase back $ 1.3 – $ 1.7 billion this yr.

AFLAC didn’t increase the guidelines a lot, however they stated the earnings ought to be above the current range of $ 4.10. $ 4.30 per share. This is based mostly on a mean change price of 110.39 yen to the dollar. I increase the Buy service to lower than $ 57 per share.

Stryker (SYK) reported Q2 earnings of $ 1.98 per share, which was four cents higher 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. In the second quarter, organic revenue grew by 8.5% and operating margin elevated to 25.9%. That's fairly good.

I used to be additionally happy to see Stryker saying his 2019 steerage. The corporate estimates that natural sales for the complete yr will improve 7.5% to 8.zero%. The company expects earnings to be between $ Eight.15 and $ Eight.25 per share. The previous range 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) studies a Q2 result of 82 cents per share. It was a penny better than anticipated.

This was a superb quarter for Fiserv and essential because the CEO had stated that Q2 is a "low watermark" for income progress. Additionally they stated that First Knowledge acquisition would shut on July 29. Fiserv additionally repeated the complete-yr EPS range of $ three.39 to $ 3.52

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Six earnings studies subsequent week

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

In April Church & Dwight (CHD) launched a reasonably good earnings report. The buyer items company estimates four cents per share. I used to be delighted that gross margins would improve by 20 basis points to 45.1%. Operating revenue margins increased 120 basis factors to 23.1 %

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

Moody's (MCO) also had an excellent Q1 outcome report. In April, the credit standing company 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 stays our most profitable inventory this yr, with a YTD achieve of 43.four%. Wall Street expects Q2 earnings of $ 2.01 per share.

I am very curious to listen to 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 inventory fell 18% in two days.

Info additionally cuts its forecast for the yr. Beforehand, the company expected EPS of a minimum of $ four.40 this yr. Now, they see it fluctuate between $ 3.87 and $ three.95.

The place 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."

Awareness has regularly returned to about half of what it lost inside two days of buying and selling. Wall Street expects 92 cents a share.

Broadridge Monetary Options (BR) acquired a great report in Might (their tax policy 3), however the firm gave several directions. The company 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 current outlook is $ four.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 results 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 Purchase Alle worth, but first I need to see the earnings figures.

Continental Building Products (CBPX) has been uncommon this yr. The earnings reviews have been fairly good, however the inventory has not carried out much.

Three months in the past, a wall company announced it was making 42 cents a share for Q1. That was eight cents greater than anticipated. Internet gross sales elevated 4.5% 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 profit elevated by 11.3%.

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

Intercontinental Trade (ICE) did properly during Q1. The trade operator made 92 cents per share. That was two cents greater than Wall Street had anticipated. Their adjusted operating margin was 58%. Money stream from operating actions increased 14% from last yr.

ICE shares began slowly this yr, but stock has picked up steam after the spring. ICE set a new high of 52 weeks last 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 new dividend can be paid on September three to document shareholders on August 16. SJM's yield is close to three.11% near Thursday.

Every part is now. There will probably be many extra stories next week. There’s additionally an enormous Fed assembly on Tuesday and Wednesday. The political statement can be released at 2 pm on Wednesday. I feel we're seeing a 25 level reduce, however I'm not constructive. Then on Friday we get the July job report. The June report added 224,000 internet jobs, and the unemployment fee rose three.7%. Ensure you all the time update your blog. I'll offer you more market evaluation within the subsequent difficulty of CWS Market Review!

– Eddy

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

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