The stock market’s earnings problem: Morning Brief

Laveta Brigham

Tuesday, September 22, 2020

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Earnings are expected to improve dramatically. Which isn’t always great for stocks.

The stock market’s tough September continued on Monday.

All three major indices fell to start the week with the S&P 500 declining for its fourth-straight day, its longest losing streak since February.

And so after the market enjoyed its best August in decades and the rally off of the March lows seemed unstoppable, bulls are now facing the biggest test since the spring. And the upcoming earnings season poses a huge challenge to the market’s current narrative.

In a note to clients on Monday, Nick Colas, co-founder at DataTrek Research, flagged the following chart from FactSet, which shows how investors expect corporate earnings to evolve in the coming year.

S&P 500 earnings are expected to have inflected. (Factset)
S&P 500 earnings are expected to have
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Positive Start to the Q3 Earnings Season

Laveta Brigham


Morgan Stanley Bets on These 3 Stocks; Sees Over 40% Upside

Did the stock market’s epic rally just need a little breather? The last few weeks have seen stocks experience their first meaningful correction since the bull market kicked off in March. Now, the question swirling around the Street is, will the rally pick back up again, or is more downside on the way?According to Morgan Stanley’s chief U.S. equity strategist Mike Wilson, uncertainty regarding the presidential election and stalemate on the next stimulus package could lead to declines in September and October. “On the correction, there’s still downside as markets digest the risk of congressional gridlock on the next fiscal deal. While we think something will ultimately get done, it will likely take another few weeks to get it over the goal line,” he noted.However, Wilson argues the recent volatility in no way signals the end of the

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This Week’s 5 Must-See Earnings Charts

Laveta Brigham

Earnings season isn’t over yet.

While it has mostly wound down, there are still 150 companies expected to report earnings this week.

Those include some of the hottest companies on the Street, including three retailers making new all-time highs, a pizza chain disguised as a convenience store and a beaten down gaming stock.

Most have solid earnings track records.

But are they too hot to handle into the earnings report?

This Week’s 5 Must-See Earnings Charts

1.    Lululemon LULU has a solid earnings surprise track record with just 3 misses in the last 5 years. However, one of those 3 happened last quarter as the coronavirus pandemic hit its Asia business hard. Shares are up 55.9% year-to-date and were hitting new highs. While it’s expected to post solid numbers again, is it too hot to handle here?

2.    RH RH has a great earnings surprise record with just 2 misses

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Why Is Square (SQ) Up 11.1% Since Last Earnings Report?

Laveta Brigham

It has been about a month since the last earnings report for Square (SQ). Shares have added about 11.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Square due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Square Reports Q2 Earnings

Square reported second-quarter 2020 adjusted earnings of 18 cents per share, against the Zacks Consensus Estimate of a loss of 8 cents per share. Notably, the company had reported earnings of 21 cents in the year-ago quarter and a loss of 2 cents in the prior quarter.

Net revenues of $1.92 billion surpassed the Zacks Consensus Estimate of $1.14 billion. Further, the figure improved

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Caleres Inc (CAL) Q2 2020 Earnings Call Transcript

Laveta Brigham

Image source: The Motley Fool.

Q2 2020 Earnings Call
Sep 1, 2020, 4:30 p.m. ET” data-reactid=”33″Caleres Inc (NYSE: CAL)
Q2 2020 Earnings Call
Sep 1, 2020, 4:30 p.m. ET

Good afternoon and welcome to the Caleres Second 2020 Earnings Conference Call. My name is Erika and I will be your conference coordinator. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. As a reminder, this conference is being recorded.

At this time, I would like to turn the call over to Logan Bonacorsi, Vice President of Investor Relations. Please go ahead, miss.

Good afternoon. I would like to thank you for joining our second quarter 2020 earnings call and webcast. A press release with detailed financial tables as well as our quarterly slide presentation are available at Please … Read More

Copart (CPRT) to Report Q4 Earnings: What’s in the Cards?

Laveta Brigham

In the last reported quarter, the Texas-based online vehicle auctioning company reported weaker-than-expected returns amid coronavirus woes. The top and bottom lines also deteriorated from the year-ago levels.

The company — which is the eBay EBAY of auto auctions — outpaced the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average surprise being 1.5%. This is depicted in the graph below:

Copart, Inc. Price and EPS Surprise


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Edited Transcript of 1508.HK earnings conference call or presentation 30-Aug-18 1:30am GMT

Laveta Brigham

BEIJING Aug 31, 2020 (Thomson StreetEvents) — Edited Transcript of China Reinsurance Group Corp earnings conference call or presentation Thursday, August 30, 2018 at 1:30:00am GMT

Ladies and gentlemen, good morning. I’m the secretary to the board, Zhu Xiaoyun, of the China Reinsurance. Welcome to China Reinsurance (Group) Corporation Limited 2018 interim results announcement.

It is the reporting period and it is a great pleasure for us to meet you again online on the business performance in the first half year. And we would also like to share with you our future plans, and this format is a conference call. We will use Mandarin to conduct the meeting, while we also provide English-Chinese simultaneous translation service. Also at the meeting, we will continue with our communication with you on the latest information. Please follow our website at Investor’s calendar for more details.

Now shall I introduce the management team before … Read More

Edited Transcript of EUR.WA earnings conference call or presentation 25-Aug-20 1:00pm GMT

Laveta Brigham

Aug 29, 2020 (Thomson StreetEvents) — Edited Transcript of Eurocash SA earnings conference call or presentation Tuesday, August 25, 2020 at 1:00:00pm GMT

Eurocash S.A. – Financial Director & Member of the Management Board

Eurocash S.A. – CEO & President of the Management Board

Eurocash S.A. – IR Director

Eurocash S.A. – Member of Management Board

Magdalena Kupiec, Eurocash S.A. – IR Director [1]

Good afternoon. Welcome to Eurocash S.A. Financial Results Presentation. We are very happy to have you all with us today.

And before I’m going to pass over to Luis Amaral, I’m going to (inaudible) (Operator Instructions)

Luis Manuel Conceicao do Amaral, Eurocash S.A. – CEO & President of the Management Board [2]

Yes. Hello. Good afternoon. As you saw, we published yesterday night results, and now we try to present to you how the business is going. It’s obvious for all the players that (inaudible) year … Read More

Edited Transcript of RHP.AX earnings conference call or presentation 24-Aug-20 11:00pm GMT

Laveta Brigham

Cheltenham Victoria Aug 26, 2020 (Thomson StreetEvents) — Edited Transcript of Rhipe Ltd earnings conference call or presentation Monday, August 24, 2020 at 11:00:00pm GMT

Thank you for standing by, and welcome to the rhipe Full Year 2020 Investor Briefing Conference Call. (Operator Instructions)

I would now like to hand over the conference to Mr. Dominic O’Hanlon, Chief Executive Officer and Mark McLellan, Chief Financial Officer. Thanks, Dominic.

Thank you, Carl. And Good morning, everybody. We appreciate you taking the time to attend our FY ’20 results presentation and we’re pleased to share with you the results for the full year. We’re going to talk you through the financial highlights for the business, provide you with an operations update. I’ll then hand to Mark McLellan who’ll take you through our financial results. And then we’ll give you a wrap on our outlook for the year and what we expect to … Read More