With corporate earnings season in full swing, there is no sign yet that there is anything that can break the back of this bull-run. Both the S&P 500 and Nasdaq Composite indexes hit fresh records on Friday after Twitter (NYSE:TWTR) and Google-parent Alphabet (NASDAQ:GOOGL) posted robust earnings.
This coming week, more than 100 S&P 500 companies are scheduled to report, amid renewed risk appetite from investors who are awaiting an expected rate cut by the Federal Reserve.
With so much at stake in a single week, it’s always a good strategy to stay on the sidelines until any headline risk passes. Here are the top 3 stocks we're keeping an eye on as earnings season heads into full swing:
1. Apple
Apple (NASDAQ:AAPL) will report fiscal third-quarter earnings on Tuesday after the market close. The maker of iPhones is expected to record $2.09 a share in profit on sales of $53.35 billion, according to analysts’ consensus forecast.
The tech giant is struggling to satisfy growth-hungry investors amid the lingering trade dispute between the U.S. and China. In the previous quarter, Apple reported that quarterly sales dropped 5% from a year earlier, mainly due to weak growth in China where iPhone sales fell by 17%.
The biggest risk that Apple is facing is a possible disruption of the company’s massive supply-chain system in China if the two countries fail to resolve differences.
Despite these challenges, investors still sent Apple’s shares higher this year, mainly encouraged by the company’s push to broaden its revenue base by offering new services. Apple stock price has climbed 33% this year, closing Friday’s session at $207.74.
The services segment, which includes app-store sales, mobile payments and streaming-music subscriptions, will be closely watched by investors as the number of iPhones the company sells stagnates.
2. Procter & Gamble
Consumer staple giant Procter & Gamble (NYSE:PG) is scheduled to report earnings for fiscal Q4 before the market opens Tuesday. Analysts on average expect earnings per share of $1.05 up from $0.94 a share a year ago. Sales for the same period are forecast to have increased 2% over the period to $16.86 billion.
P&G’s organic sales, which exclude items like acquisitions and currency effects, gained 5% in the company’s fiscal third quarter that ended in March. At that time, P&G had revised its organic growth guidance for this year to “a solid 4%” -- up from a previous range of 2-4%, helped by robust growth in its two biggest markets, the U.S. and China.
Despite it being a mature and often slow-moving stock, P&G shares, which finished the trading week at $114.73, have outperformed the broader market this year. The stock has surged 25% in 2019 compared with the S&P’s increase of about 20%.
What’s propelling the maker of Tide detergent, Pampers diapers and Crest toothpaste higher is the growing belief among investors that the company’s turnaround plan has started paying off and the bearish spell in its revenue growth is over.
To counter smaller disruptive competitors who have started chipping away at PG's market share, the company has been focusing on 10 big product segments to help streamline both focus and profits.
3. Beyond Meat
The plant-based meat substitute producer, Beyond Meat (NASDAQ:BYND) will release Q2 earnings on Monday after the market close. According to the analysts consensus forecast, the company is likely to produce a $0.13 a share loss in its second earnings report since going public in May. Sales are likely to have surged 20% from the previous quarter to $48.29 million.
The stock, which closed at $234.90 on Friday, has been the darling of investors, surging more than 900% since going public. Behind this massive rally are expectations that the company's vegetable-based products have huge market potential.
Beyond Meat’s biggest attraction is that its products come surprisingly close to real meat in taste, smell, texture and appearance.
Beyond Meat’s second-quarter earnings will serve as a key test as investors would like to see evidence that the share price surge isn’t a bubble and it’s actually backed by sales momentum. Shares have rallied more than 20% in the past five trading days as the company has won another top restaurant partner, Dunkin Brands Group Inc (NASDAQ:DNKN).