AAPL, CMG, FB, AMZN, GILD: Stocks To Watch

Updated on

Tuesday, April 26

Stocks Apple

Stocks CMG

Wednesday, April 27

Stocks FB

Thursday, April 28

Stocks AMZN

Stocks GILD

Apple (AAPL)

Information Technology – Computers & Peripherals | Reports April 26, after the close

The Estimize community is looking for EPS of $2.02 on revenue expectations of $52.15 billion, 5 cents higher than Wall Street on the bottom line and close to $650 million greater on the top. Since Apple last reported, EPS estimates have declined 14% and revenues by 10% in reaction to CEO Tim Cook’s announcement that this would be the worst report of 2016. This would mean the first YoY decline for profits since FQ4 2013, and the first decline for sales since FQ2 2003!

Stocks Apple

What to watch: The iPhone continues to be AAPL’s biggest growth catalyst, accounting for two thirds of its revenue in any given quarter. Apple is in the middle of a product cycle right now, with the iPhone 7 not expected to be released until the fall, which explains why this is expected to be the weakest quarter of the year. iPhone sales reached a record high of 74.8 million to kick off fiscal 2016. However, this was nearly the same sales peak Apple (AAPL) reached in the year-ago period. The rest of Apple’s portfolio, made up of tablets, computers and watches, constitutes roughly one-third of revenue. These products have struggled lately, primarily driven by weakness in China, currency headwinds and low upgrade demand. Last quarter, Apple (AAPL) sold 16.1 million iPads, compared to 21.4 million a year earlier. Upgrade demand for these tablets have been abysmal so it makes sense that the iPad 2 is still the most widely owned iPad to date. Meanwhile, the Apple Watch has come with mixed reviews. Most tech savvy consumers know the second iteration is always better than the first, so the next version of the watch might be the spark Apple is looking for. Computer sales haven’t been a highlight either, with Mac sales down 2% in FQ1 2016.

Chipotle (CMG)

Consumer Discretionary – Hotels, Restaurants & Leisure | Reports April 26, after the close.

The Estimize consensus calls for EPS of -$0.99 as compared to the Street’s expectation for -$1.06. Revenues are estimated to come in at $857.4 million, just slightly below the sell-side’s $857.5 million. Unsurprisingly, estimates have decreased significantly since the company last reported, 141% on the bottom-line and 12% on the top. Compared to the same period last year, this represents a projected decline in growth of 121% for EPS and 21% for revenues.

Stocks CMG

What to Watch: Once the poster child of fast casual, Chipotle has been in a free-fall over the last few months due to a series of health scares. As a result, the CDC investigated the restaurant chain. In the aftermath, CMG tightened procedures to surpass industry standards and CEO Steve Ells promised to be the “safest place to eat” at the end of last year. Just 10 days later there was a second outbreak infecting 5 individuals in three states. As of February, the CDC declared the Chipotle-related E. Coli outbreak over. The stock increased 4% on the news, but is down 46% in the last 12 months. In Q4, both revenues and earnings growth were negative for the first time since Q4 2008. In addition, same store sales fell for the first time in the company’s history, down 14.6%. With customers likely still weary of Chipotle stores, the burrito chain is expected to face contracting same store sales, slower traffic and declining average ticket orders again in Q1.

Facebook (FB)

Information & Technology – Internet Software & Services | Reports April 27, after the close

After Wednesday’s closing bell we get results from Facebook. The consensus data is calling for earnings per share of $0.66 on $5.3 billion in revenue, 3 cents higher than Wall Street on the bottom line and nearly $100 million greater on the top. Estimates have been increasing lately, with EPS expectations up 13% in the past three months and revenue estimates increasing 6%.  Year-over-year, profits and sales are estimated to grow by 57% and 50%, respectively.

Stocks FB

What to watch: The social media darling, Facebook, is poised to open up 2016 with a bang when they report first quarter earnings on Wednesday. Last quarter, Facebook reported 1.59B monthly active users (MAU), a resounding 14% YoY increase. This is crucial in the industry because a stronger social network leverages more opportunities for valuable interactions, user growth and revenue. Compared with its peers, Twitter and Linkedin, Facebook is far ahead in both MAUs and DAUs. Facebook has also developed an interest in growing internationally. Despite lower revenue per user in emerging markets, Mark Zuckerberg has been drawn to expanding in India, home to more than one billion people. By reaching a larger audience, Facebook’s instant ads will create more value for advertisers. However, FB no longer relies solely on ad revenue and has expanded its ecosystem to services and applications. Notably, Facebook’s past acquisitions of WhatsApp, Oculus Rift, and Instagram have performed remarkably well, with Oculus Rift shipments just beginning last month. Facebook is also looking to take on peers such as LinkedIn with “Facebook at Work” and Yelp’s local business and services platform.

Amazon (AMZN)

Consumer Discretionary – Internet Retail | Reports April 28, after the close.

The Estimize consensus is calling for EPS of $0.64 on $28.0 billion in revenue, three cents higher than Wall Street on the bottom line and around $60 million higher on top. Since the start of the quarter, estimates have fallen 6% for EPS but increased 2% for revenue. Despite the decline in estimates, profits are anticipated to increase 624% and revenues 23%.

Stocks AMZN

What to watch: After continually being scrutinized for posting losses, Amazon is coming off three straight quarters of profitability. Amazon Prime and the dominance of Amazon Web Services (AWS) is expected to carry the retailer in 2016. During the past 2 years, Amazon Prime memberships have nearly doubled, up to 54 million, and almost half of all adults in the U.S. have Prime subscriptions. In fact, a quarter of all active Amazon shoppers are Prime members. In hopes of converting more customers to Prime, Amazon raised the minimum order total for free shipping for non-Prime members from $35 to $49 earlier this year. On the other hand, AWS is currently the leading in the cloud infrastructure industry, representing about 30% of the market. In recent years, large enterprises such as Netflix have migrated to AWS to be its platform provider which validates their credibility and reliability. In addition, Amazon has begun expanding its web services in five new regions this year, including China, India, and the U.K.  Heavy investments in global expansion on top of Google and Microsoft’s ascension in cloud computing will put pressure on Amazon’s margins. On the bright side the expected growth in cloud computing and Internet of Things (IoT) should support an optimistic outlook as Amazon continues to expand its web services.

Gilead Sciences (GILD)

Health Care – Biotechnology | Reports April 28, after the close

For Gilead, the Estimize community is expecting per share earnings of $3.25, 13 cents higher than Wall Street and corporate guidance. Revenues are expected to come in at $8.227 billion vs. $8.085 billion from the Street. Estimates for earnings have increased a mere 2% since the Q4 report, with sales estimates increasing 5%. Overall, GILD’s streak of double-digit growth on the top and bottom-line is projected to come to an end this quarter, with growth of 8% and 10%, respectively.

Stocks GILD

What to watch:  Over the last four quarters Gilead has posted positive earnings surprises of 5.9% on average, and is expected to beat again this Wednesday. Gilead is the market leader in Hepatitis C treatments, with two popular drugs Sovaldi and Harvoni. Their Hep C franchise, along with other antivirals, make up 90% of the company’s revenue stream. However, the benefit of these drugs to the bottom-line is waning as they have been on the market for a year and half now and are also curative. More competition is set to hit the Hep C market soon, with Merck recently approved to release its rival drug. Merck’s treatment imposes a direct threat to Gilead especially since the drug is cheaper than Harvoni. In order to diversify revenues, Gilead is focusing on growing other core offerings including HIV and Hep B treatments.

What are you expecting for these names? Get your estimates in here!

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