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5 Must See Earnings Charts

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·3 min read
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Earnings season picks up with over 250 companies expected to report earnings this week.

Included in that group are many of the big regional banks, the first of the FAANG stocks with Netflix, Tesla, and a bunch of other companies that could tell us a lot about the consumer and a possible recession.

Look to the consumer-focused companies for insights as to what is going on with the consumer.

The big banks have, so far, not seen much, if any, stresses among consumers on spending or loans. A strong job market has put a floor under the economy.

But for how long? The Fed is intentionally trying to slow it and will eventually succeed.

 

Can the US avoid a hard landing?

 

5 Companies to Tune into for Recession Insights This Week

1.    Lithia Motors LAD

Lithia Motors has beat 9 quarters in a row, with its last earnings miss in 2020. That’s impressive during the pandemic.

The auto retailers were supposed to have had “peak” earnings in 2021 as how many consumers need to buy a car at this stage of the pandemic?

But Lithia’s earnings are expected to rise another 19.5% in 2022.

Shares are down just 4.5% year-to-date and are dirt cheap with a forward P/E of 5.9.

Is Lithia a hidden gem?

2.    DR Horton, Inc. DHI

DR Horton has beat on earnings 13 quarters in a row. It’s last miss was actually well before the pandemic hit, in 2019.

DR Horton’s fiscal 2022 earnings are expected to rise 50% as it delivers homes from its large backlog.

But what happens going forward? Have cancellation rates risen? Are they slowing the opening of new communities?

DR Horton’s shares are cheap, with a forward P/E of just 4.3.

But with the economy still slowing, should investors stay on the sideline with DR Horton?

3.    Tractor Supply TSCO

Tractor Supply has been one of the big pandemic retail winners. It has beat on earnings 9 quarters in a row with its last miss in 2020.

Shares have fallen nearly 15% year-to-date but that is outperforming the S&P 500 which is down 19% during the same time period.

Tractor Supply isn’t cheap, with a forward P/E of 21.4.

Is this a buying opportunity in Tractor Supply, one of the retail superstars?

4.    Domino’s Pizza DPZ

Domino’s Pizza has missed on earnings two quarters in a row as inflationary pressures hit the restaurant industry.

Earnings are expected to decline 6.9% this year.

Domino’s Pizza shares are down 28% year-to-date but are up off their May lows, adding 7% in the last month.

Shares still aren’t cheap, even with the sell-off, trading with a forward P/E of 32.

Domino’s is considered an “affordable” restaurant choice for a family dinner. Will Domino’s Pizza provide key insights into consumer thinking this summer?

5.    Schlumberger SLB

Schlumberger is one of the few companies that still has a perfect 5-year earnings surprise track record as the pandemic wiped out many of the great earnings surprise streaks.

This oil services company is expected to see earnings rise 45.3% in 2022.

Yet shares have plunged 16% in just the last month. Schlumberger is cheap with a PEG ratio of just 0.4. A PEG ratio under 1.0 means it has both growth and value.

Schlumberger also pays a dividend, currently yielding 2.2%.

Is this a buying opportunity in Schlumberger?


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Schlumberger Limited (SLB) : Free Stock Analysis Report
 
Domino's Pizza Inc (DPZ) : Free Stock Analysis Report
 
Tractor Supply Company (TSCO) : Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
 
Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
 
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