Now, this is what investing is all about. When big-name companies report earnings it lights a fire under investors as they start snatching up stocks that can post solid sales and earnings figures.
And while this week hasn’t started off on the best foot, there are a number of earnings announcements that are sure to make headlines.
Here’s my take on the 10 big-names to watch this week, with their respective release dates:
Wednesday (April 25)
Boeing (NYSE:BA): Expectations are for 23% sales growth and 19% earnings growth. The company has a strong history of earnings surprises, but analysts aren’t quite as excited about this quarter as they have in the past and buying pressure is weak. I rate this stock as a hold.
Dr Pepper Snapple (NYSE:DPS): I love this company. I’ve recommended this company to my Blue Chip Growth members for the last year and while we’ve made some nice double-digit gains, the 3.4% dividend payment has been fantastic. This is a safe beverage company with solid fundamentals across the board. I rate DPS a buy.
Harley-Davidson (NYSE:HOG): With the weather warming up, I’m starting to see the bikers hit the road and have been hearing that signature roar from Harleys lately. As for the company, HOG has had some trouble with earnings surprises and sales growth lately. But buying pressure has been solid, lifting the stock 37% in the last year. This company is a bit of a mixed bag and I rate it as a cautious buy.
Thursday (April 26)
Altria Group (NYSE:MO): While it doesn’t look like the company will have a blowout quarter with 1.7% sales growth and 11% earnings growth, I love the steady 5.1% dividend and the steady gains from this tobacco company. The two-year chart for MO is spectacular and I expect more of the same. This is another Blue Chip Growth stock that I rate as a strong buy.
Revlon (NYSE:REV). This beauty company doesn’t pay a dividend, does not have a strong history of earnings surprises or growth and hasn’t done much to get analysts excited about its upcoming earnings report on Thursday. The only bright spots are cash flow and the buzz that the rejected bid for Avon (NYSE:AVP) brought to the sector. I don’t recommend buying either company.
In the healthcare sector, Eli Lilly (NYSE:LLY) and Bristol-Myers Squibb (NYSE:BMY) will report earnings on Wednesday and Thursday, respectively. And Merck (NYSE:MRK) will report on Friday. Of the three, I like BMY better. BMY has one blemish when it comes to earnings surprises, but gets high marks in nearly every category. LLY, on the other hand, gets failing grades in sales growth, operating margin growth and earnings growth–all are critical components to earnings season success. MRK has below average earnings growth, earnings momentum and sales growth. If you want a play in this sector, BMY is the better choice.
Last on my list of stocks to watch this week is Starbucks (NASDAQ:SBUX). I profiled this stock last week and gave the stock my full buy recommendation. The company is clearly the big kahuna when it comes to coffee. Travel to any major urban center in the U.S. and I can guarantee that you’ll only be a few blocks away from a Starbucks location.
In terms of fundamentals, the company could firm up its earnings growth and surprises, but buying pressure, return on equity, sales growth, operating margin growth and the fact that the company has a cult-like following make this company a strong buy.