The bulls are parading around Wall Street on Wednesday as better-than-expected earnings from International Business Machines Corp. (NYSE:IBM) sent shares soaring to their best gain in eight years — never mind the 22nd consecutive decline in revenues. IBM’s success pushed the Dow Jones Industrial Average definitively up and over the 23,000-level that was teased on Tuesday.
As I’ve covered recently, valuations are very extended, volatility is massively depressed (Societe Generale warns these conditions occur less than 2% of the time), and sentiment is white hot. Schwab recently noted that new brokerage account activity is occurring at a rate not seen since the dot-com bubble. Everyone is apparently all in.
Yet breadth is poor as the bulls focus on a narrow group of stocks. Wednesday’s action is a perfect example of this, with IBM’s explosion sucking all the air out of the room. Key big-tech stocks are basically unchanged on the day.
With that in mind, here are five blue-chip stocks getting left behind by “Dow 23,000:”
Blue-Chip Stocks Left in the Dust: Chevron (CVX)
Chevron Corporation (NYSE:CVX) shares are under pressure after getting hit with a couple of analyst downgrades. The drop in CVX comes despite reports of a larger-than-expected crude oil draw, as U.S. production was idled due to hurricanes. BMO Capital Markets cut the stock to neutral, while Societe Generale cut it to hold. This has led Chevron to cut below its 20-day moving average for the first time since late August.
The company will next report results on Oct. 27, before the bell. Analysts are looking for earnings of $1.00-per-share on revenues of $34.62 billion. When it last reported on July 28, earnings of 77 cents missed estimates by 10 cents on a 17.8% rise in revenues.
Blue-Chip Stocks Left in the Dust: Merck (MRK)
Merck & Co., Inc. (NYSE:MRK) shares have been drifting lower in recent weeks after being turned away from multi-month resistance near $66. Watch for possible return to year-to-date support near $61, which would be worth a decline of around 5% from current levels. Volatility has been connected to mixed messages from President Trump on healthcare reform and drug price policy.
MRK will next report on Oct. 27, before the bell. Analysts are looking for earnings of $1.03-per-share on revenues of $10.5 billion. When it last reported on July 28, earnings of $1.01-per-share beat estimates by 14 cents on a 0.9% rise in revenues.
Blue-Chip Stocks Left in the Dust: Nike (NKE)
Nike Inc (NYSE:NKE) shares are stagnating, currently sitting at near year-to-date lows around $51, and trading near levels first reached in the summer of 2015. Down from highs above $66 which were hit two years ago, shares have struggled in this relatively cautious retail environment amid intensifying competition from online rivals like Amazon.com, Inc. (NASDAQ:AMZN), which is reportedly looking at tapping Nike for its own sportswear line.
The company will next report results on Dec. 19, after the close. Analysts are looking for earnings of 40-cents-per-share on revenues of $8.4 billion. When the company last reported on Sept. 26, earnings of 57 cents beat estimates by 9 cents on a 0.1% rise in revenues.
Blue-Chip Stocks Left in the Dust: Pfizer (PFE)
The company will next report results on Oct. 31, before the bell. Analysts are looking for earnings of 64-cents-per-share on revenues of $13.15 billion. When the company last reported on Aug. 1, earnings of 67-cents-per-share beat estimates by a penny on a 1.9% decline in revenues.
Blue-Chip Stocks Left in the Dust: Procter & Gamble (PG)
Procter & Gamble Co (NYSE:PG) shares are drifting lower, threatening to fall below their 50-day moving average in a major way for the first time since April. This is happening amid a management battle with activist investor Nelson Peltz’s Trian Fund Management. Trian is trying to get representation on the board, with a recent election claimed to be “too close to call” by the fund amid dissatisfaction with management’s current strategy.
The company will next report results on Oct. 20, before the bell. Analysts are looking for earnings of $1.07 on revenues of $16.7 billion. When the company last reported on July 27, earnings of 85-cents-per-share beat estimates by 7 cents on a 0.1% decline in revenues.