This year's historic stock market decline in a bear market seems to be old news. Up to and including the Thursday before the Good Friday holiday, the price rose by about 26% from its low on March 23.
Investor optimism driving this comeback is fueled by an improving view of the coronavirus outbreak, massive monetary and fiscal stimulus from the government, and hopes that oil-producing countries will be able to close a deal to their reduce production.
Nevertheless, this rally is still very shaky, given the uncertainty surrounding COVID-19 and its impact on corporate earnings. Some of the largest companies in the United States are expected to release their Q1 earnings in the coming week, although fears of massive economic damage and a profit recession continue to weigh on sentiment.
When earnings reports are released, investors will want to know if these US megacaps are able to predict an immediate future direction and what their worst scenarios might be if the global lockdowns are extended. The following are three large-cap companies we follow: each comes from a different industry, and each releases results the following week:
1. Johnson & Johnson
Global healthcare giant Johnson & Johnson (NYSE 🙂 will report first-quarter earnings before the market opens on Tuesday, April 14. The stock has been under pressure in the past year due to concerns that the growing number of legal disputes involving baby powder may harm revenues and future growth potential.
But the coronavirus pandemic has brightened the prospects for solid health care stocks that are resilient when investors turn to them for their safe dividends. And the New Jersey-based company complies with that law.
J&J shares have fallen only 3% this year. They closed at $ 141.23 on Thursday, compared to the 14% dip in the S&P 500 Index during the same period. According to the average analyst estimate, the drug manufacturer will record a share profit of $ 19.86 billion on sales for a period of $ 2.05.
We believe that Johnson & Johnson will slowly overcome the dispute issues and can be a good bet for patient investors whose focus deserves steadily growing dividends. The company has a great pipeline of new medicines and a great history of increasing the payout for 55 years in a row. It currently delivers a quarterly dividend of $ 0.95 per share, which has risen 7% per year over the past five years, with an annual return of 2.69%.
2. Citigroup
One of the largest banks in the United States, Citigroup (NYSE :), will report first-quarter earnings before entering the market on Wednesday April 15 opens. The lender's gains and upcoming guidance are important for markets to assess the health of consumer finances and the economy at large, both of which have been affected by the corona virus.
Citigroup shares have benefited from the continued cost savings of the New York-based lender over the past decade and the portfolio rebalance.
But the stock has lost 40% of its value this year amid the virus-induced selloff, as economists see the economy plunge into a deep recession. The company's shares were strong participants in the comeback rally. They rose more than 7% on Thursday to close at $ 47.41. Citigroup is able to post $ 1.90 in earnings per share on revenues of $ 19 billion, according to average analyst predictions.
In addition to the bottom numbers, investors will also focus on Citigroup's efficiency ratio, or expenses as a percentage of earnings. This measure has risen below 60% in the past four years, making Citi the only major global bank capable of sustaining such a winning streak.
3. Schlumberger
Now that the market is totally confused about falling prices and production overflow due to a price war combined with a shrinking global economy , it's not hard to see what's in store when oil and gas giant Schlumberger (NYSE 🙂 reports its first quarter earnings on Friday, April 17, before opening.
Schlumberger operates in more than 120 countries and provides the broadest range of products and services to the oil and gas industry, from exploration to production. But the company's business is likely to decline sharply the rest of the year as major oil companies cut back on their spending to save money during this period of oil price collapse.
Because of these fears, SLB shares have lost about 60% of their value this year. The stock closed at $ 16.47 on Thursday, after down around 5% on the day. Analysts expect $ 0.26 per share on revenues of $ 7.6 billion on average.
The company's future guidelines may provide some insight into the extent of the damage caused by the price war on the oil markets and the future of the currently whopping 11.57% dividend yield, equating to $ 2 per share per years.
