- Bank of America (BAC) is hoping an earnings win can turn a rough year around.
- Charles Schwab (SCHW) has used its innovation to fare better than most so far in 2022.
- Johnson & Johnson (JNJ) has outperformed in 2022, and an earnings beat could push it higher.
- Netflix (NFLX) needs to show stronger growth to keep investors happy.
- Tesla (TSLA) is strong enough to shrug off worries about Elon Musk’s split attention.
- Procter & Gamble (PG) has enjoyed positive attention lately as investors focus on consumer stocks.
- AT&T (T) is in a spotlight as it completes a spinoff of its WarnerMedia division.
Earnings season is back in full swing with a number of leading blue-chip companies on deck to release their latest earnings reports. Over the next week, we’ll hear from major financial institutions, consumers goods companies, a leading electric vehicle maker, a streaming powerhouse and a legacy technology concern. Taken together, they should provide an accurate report card on the health of corporate America.
The first week of earnings season saw mixed results from the largest U.S. banks, and their first-quarter prints helped to contribute to a choppy market that ultimately ended down for the week.
Strong showings from leading companies in the days ahead could help to renew confidence in investors who appear to have been shaken by runaway inflation, an escalating war in Europe, and a renewed Covid-19 outbreak in China.
Here are seven stocks reporting earnings the week of April 18.
| BAC | Bank of America | $37.57 |
| SCHW | Schwab | $82.75 |
| JNJ | Johnson & Johnson | $179.90 |
| NFLX | Netflix | $341.13 |
| TSLA | Tesla | $985 |
| PG | Procter & Gamble | $158.57 |
| T | AT&T | $19.54 |
Bank of America (BAC)
Earnings from the big banks conclude next week with the first-quarter results of Bank of America (NYSE:BAC). The second-largest lender in the U.S. with $3 trillion of assets is expected to report earnings per share (EPS) of 74 cents on revenues of $23.11 billion for the first three months of the year.
The bank just made headlines after its chief investment strategist, Michael Hartnett, forecast a coming recession in the U.S. The dire prediction came after it was revealed that inflation reached 8.5% in March of this year, its highest reading since 1981. Runaway consumer prices and aggressive interest rate hikes by the U.S. Federal Reserve to tame it could lead to what Hartnett called a “recession shock” in America.
Like all bank stocks, shares of BAC have been on a downswing this year. So far in 2022, Bank of America’s stock has declined 16% to $37.57 as the outlook for both the U.S. and global economies darkens.
Charles Schwab (SCHW)
Along with the big banks, earnings are also being released by financial services companies and investment firms, including Westlake, Texas-based Charles Schwab (NYSE:SCHW). SCHW stock has been holding up better than most financial and bank stocks in the face of worsening macro-economic conditions. Year to date, Charles Schwab stock is down less than 2%. However, the company’s share price has risen 23% in the past year to now change hands at $82.75.
The company’s success is largely due to its constant innovation. A pioneer of fractional shares, Charles Schwab recently unveiled a new direct indexing solution called “Schwab Personalized Indexing” that provides tax management and enhanced stock portfolio information to retail investors. These kinds of products have helped Charles Schwab develop a loyal customer base.
Wall Street is looking for Charles Schwab to report EPS of 84 cents and revenues of $4.83 billion for the first quarter on or around April 18.
Johnson & Johnson (JNJ)
Shares of Johnson & Johnson (NYSE:JNJ) have outperformed so far in 2022. JNJ stock is up 5% year to date at $179.90 per share. That compares to a year to date decline of 8% for the benchmark S&P 500 index.
Over the last 12 months, Johnson & Johnson stock has gained 12%. The solid returns can be attributed to the company sidestepping the legal cases brought against it alleging that its baby powder caused cancer.
Additionally, the company has won approval from the U.S. Food and Drug Administration (FDA) for its new treatment against Myeloma, a deadly form of cancer. The FDA approval has also spurred a rally in JNJ stock.
It will be interesting to see how the company’s first-quarter results look and the impact they could have on the share price. Analysts are forecasting that Johnson & Johnson will announce EPS of $2.61 on revenues of $23.67 billion when it delivers Q1 results on April 19.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) needs to impress with its first-quarter results. The streaming giant has been in the proverbial dog house ever since it warned of slowing growth amid enhanced competition during its last earnings report. NFLX stock is down 43% year to date at $341.13 per share. All of the gains the stock achieved during the pandemic have largely been wiped out.
What will it take to get Netflix’s stock back on track? Better-than-expected subscriber growth would be a big catalyst. During its last print, the company forecast that it would add 2.5 million subscribers during the recently completed first quarter of 2022. That’s well short of the nearly four million new subscribers added in Q1 2021.
NFLX stock plunged 20% immediately after the company delivered that forward guidance.
Analysts are calling for Netflix to deliver EPS of $2.90 on revenues of $7.93 billion next week. But all eyes will be on the subscriber numbers. The new season of Stranger Things is available for streaming on May 27!
Tesla (TSLA)
Shares of electric vehicle maker Tesla (NASDAQ:TSLA) fell more than 3% on the day it was revealed that company chief executive officer (CEO) Elon Musk is offering to spend $43 billion to buy Twitter (NYSE:TWTR) and take the social media company private. Investors appear to be concerned that Musk will become distracted if he owns Twitter and take his focus off the electric vehicle company he built into a global powerhouse.
Musk also currently runs two other privately held companies, SpaceX and The Boring Company.
Whether Musk can juggle it all remains to be seen. But Tesla shows no signs of slowing down. The EV maker has brought new plants in Austin, Texas and Berlin, Germany online and its deliveries have remained strong despite a global shortage of semiconductors and other automotive parts.
So far this year, TSLA stock has slumped 7% to $985 a share. Analysts are calling for the company to report EPS of $2.26 and revenues of $17.76 billion on April 20.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) has been getting a fair amount of attention lately as investors look for consumer staples stocks with strong pricing power in the wake of sky-high inflation and concerns about a potential recession.
The worries have placed the maker of items ranging from Gillette razor blades to Tide laundry detergent on the radar of Wall Street and Main Street investors. Consequently, PG stock has gained 11% since mid-March despite broad market volatility during that time. The company’s shares now trade at just under $160 each.
Investment bank Raymond James recently placed an “outperform” rating and a price target of $175 per share on PG stock, citing improved top and bottom-line growth. Raymond James price target implies another 10% of upside for PG stock in coming months. A strong earnings report could certainly help to boost the share price further.
Analysts are predicting that Procter & Gamble will report EPS of $1.30 and revenues of $18.73 billion for this year’s first quarter on April 20.
AT&T (T)
Analysts are also turning bullish on AT&T (NYSE:T) stock after the company successfully spun off WarnerMedia into a new publicly traded venture called Warner Bros. Discovery (NASDAQ:WBD). The spin-off saw Warner Bros. combine with the Discovery network to create a streaming powerhouse. The $43 billion deal gives AT&T cash that it can apply to its substantial debt load of more than $180 billion.
It also frees up AT&T to concentrate on its core wireless internet business.
Owing largely to the WarnerMedia spin-off, T stock has risen nearly 10% in the past five trading sessions, and is up 13% over the last month, at $19.54 per share. Analysts like that AT&T is now free to focus almost entirely on the rollout of its fifth-generation (5G) wireless business and pay down its hefty debt load. The streamlined focus is just what the legacy technology company needs, say many analysts.
It will take some time for the change to show up in AT&T’s results, however.
For the first quarter of this year, analysts expect AT&T to report EPS of 59 cents on revenues of $29.53 billion when it announces its latest results on April 21.
On the date of publication, Joel Baglole held a long position in BAC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.