Stocks rose and ended lower Friday as investors weighed the worrying surge in new ones against apparent advances in vaccines. The small cap was the only outlier and ended the day green.
Since the pandemic began nine months ago, more than 12 million cases of coronavirus have been reported in the US. The country has not only set records for daily infections, but also for the number of COVID-related fatalities.
Wall Street will have a shortened trading week, with the stock market closing for Thanksgiving on Thursday, November 26 and closing at 1:00 PM ET on Friday.
However, a full list of earnings reports and data reports will be released in the preceding days, giving investors the opportunity to monitor additional developments in the ongoing health crisis.
Below we highlight one stock that is likely to be at a loss in the coming days and one that has proven that it can increase even in this unclear market environment:
Share to buy: Best Buy
Best Buy (NYSE 🙂 was one of the major retail players this year, with the consumer technology giant benefiting from the rapid growth in e-commerce and online sales during the coronavirus pandemic.
Since the start of the year, shares of the Richfield, Minnesota-based company have gained 36%, surpassing the 10% rise in the benchmark S&P 500 since the start of the year as it remains one of the few electronics stores that are thriving. even with increasing competition from Amazon.com (NASDAQ :).
The stock ended Friday at $ 119.14, pulling back to its all-time high of $ 124.82 on November 5, bringing the largest US consumer electronics retailer to a market cap of $ 30.8 billion .
Best Buy, which reported second-quarter revenues and revenues, is expected to report third-quarter results on Tuesday, November 24, before opening the US market.
According to consensus estimates, the tech gadget retailer should make a profit of $ 1.70 a share, a 50% increase from earnings per share of $ 1.13 in the same quarter a year earlier.
Revenues are expected to grow 12% year-over-year to nearly $ 11 billion as consumers flocked to the digital app to order computers, tablets and other home-working equipment amid the ongoing national health crisis.
Investors will therefore want to keep a close eye on Best Buy's domestic online sales growth, which rose by a staggering 242% in the previous quarter, even as most stores reopened after previous closings.
Despite high expectations, we expect Best Buy to post another one, driven by the continued spike in e-commerce spending following the coronavirus outbreak.
A major earnings update to watch: comments on the overall economy and health of the US consumer from executives at Best Buy's post-earnings conference call. This could indicate what the company is predicting as the number of virus cases soar in the run-up to the holidays.
Stock To Dump: Avis Budget Group
Investors may want to stay away from Avis Budget Group (NASDAQ 🙂 this week after a number of US states and cities regain social security. have imposed distance restrictions in an effort to slow the rapid spread of the virus before the winter season.
U.S. public health workers are also urging the public to refrain from holiday gatherings. With Thanksgiving just days away, demand for rental cars is likely to remain low.
To date, shares of the Parsippany, New Jersey-based car rental company have underperformed the S&P 500 over the past year, with Avis up below 8%, while the S&P was up 10 over the same period.
The stock closed at $ 34.79 on Friday, giving it a market capitalization of approximately $ 2.4 billion.
Avis Budget Group Daily Chart
Avis was consensus estimates for revenues and revenues when it released its third quarter financial results on October 29, even as earnings and revenues fell sharply year-on-year.
The car rental company reported adjusted earnings per share of $ 1.13, about 62% lower than earnings per share of $ 2.96 in the same period a year ago. Revenues plummeted 44% from the year-earlier quarter to $ 1.53 billion, above the consensus estimate of $ 1.44 billion.
However, the rise in earnings did not impress investors as management warned that it expects the travel environment to remain challenging given the impact of the pandemic.
Given the difficulties of underlining car rental services, revenues from the US segment – which contributes nearly 73% of total revenues – fell 40% year-on-year to $ 1.114 billion.
Taking this into account, CAR stocks appear to remain under additional pressure for the next few days as investors brace themselves for a difficult holiday travel season.
