Hot stocks to watch today: Among companies in the Standard & Poor's 500 Index that have reported earnings results, about two-thirds have beat analysts' sales targets, the highest percentage since mid-2011, according to Barclays.
Investors hope the streak continues as earnings continue to roll in. Reports today (Wednesday) include results from a couple of media giants, a major oil driller, a snack food leader, and more.10 Hot Stocks to Watch Today: TWX, FOXA, MDLZ, and More
Hot Stocks to Watch No. 1: Time Warner Inc. (NYSE: TWX) is scheduled to post Q2 numbers before the open. Expectations are for the media giant to report earnings per share (EPS) of $0.84, up from $0.83 in the same quarter a year ago. The focus today isn't likely to be on earnings, but instead on media mogul Rupert Murdoch's attempts to buy TWX. Time Warner has rejected Murdoch's $80 billion overtures and is intent on going it alone. It was reported that Murdoch's Twenty-First Century Fox was going to increase its offer with proceeds from the sale of its Italian and German Sky TV assets - as much as $13.5 billion. But late Tuesday, CNBC reported Twenty-First Century withdrew the offer, sending TWX shares swooning some 11% afterhours.
Hot Stocks to Watch No. 2: Twenty-First Century Fox Inc. (Nasdaq: FOXA) also reports earnings Wednesday, at a time not specified. Forecasts have the entertainment conglomerate posting fiscal Q4 EPS of $0.38, up from $0.31 in the year-ago quarter. Again, attention will be on the withdrawn bid for Time Warner. FOXA was expected to make an aggressive case for a TWX buy on today's earnings conference call. Following the hostile offer's withdrawal late Tuesday, investors will be listening instead to what FOXA has planned for the future. FOXA shares jumped 7.83% after-hours Tuesday.
Hot Stocks to Watch No. 3: Mondelez International Inc. (Nasdaq: MDLZ) will post Q2 numbers Wednesday morning. Analysts expect the snack food leader to report EPS of $0.39, up from $0.37 in the same quarter a year ago. Since splitting from Kraft Foods Group Inc. (Nasdaq: KRFT) in Oct. 2012, Mondelez's numbers have been soft. Pressured by tight consumer spending and weakness in emerging markets, Mondelez's sales have suffered, most notably across its chewing gum brands. Sales aren't expected to have picked up much in 2014's first half.
Hot Stocks to Watch No. 4: Viacom Inc. (Nasdaq: VIAB) is set to report fiscal Q3 numbers Wednesday morning. Expectations are for the media behemoth to post EPS of $1.44 for its fiscal Q3, up sharply from $1.29 in the same quarter a year ago. Whisper numbers have VIAB reporting EPS of $1.46. Amid the flurry of mergers, acquisitions, and spin-offs in the sector, VIAB is well positioned to make a deal or a move with its substantial free cash flow, thanks to its healthy share repurchase program. Since 2011, Viacom has bought back more than 207 million shares for roughly $12 billion, removing more than 30% of outstanding shares. With $8 billion left in its repurchase authorization, the company can further reduce its outstanding shares by another 20% to 25%.
Hot Stocks to Watch No. 5: Devon Energy Corp. (NYSE: DVN) reports Q2 earnings before today's open. Expectations are for the independent energy company to post EPS of $1.40, up sharply from $1.21 in the same quarter a year earlier. Whisper numbers have DVN reporting EPS of $1.46. Heading into the earnings release, bullish option activity has spiked, according to OptionMonster. Some 9,000 September 80 calls were purchased on July 22, most priced at $1.57. The buy was more than 400 times the previous open interest in the strike, indicating fresh money was put to work on the long side.
Hot Stocks to Watch No. 6: Murphy USA Inc. (NYSE: MUSA) is scheduled to announce Q2 results after Wednesday's close. Analysts expect the retail chain of motor fuel products and convenience merchandise to post EPS of $0.89 per share on revenue of $4.92 billion. According to eMarketer's new ranking of top U.S.-based retailers with the highest sales per square feet, MUSA is No. 2 on the select list at $4,221. That's not far behind the leader, Apple Inc. (Nasdaq: AAPL), which boasts $4,551 in sales per square foot.
Hot Stocks to Watch No. 7: Transocean Ltd. (NYSE: RIG) will post Q2 results after today's closing bell. Analysts expect the international provider of offshore contract drilling services for oil and gas wells to report EPS of $1.12 on revenue of $2.27 billion. Last quarter, RIG beat EPS estimates by a whopping $0.40 and comfortably beat revenue forecasts. BMO Capital Markets recently boosted its rating on RIG to "Market Perform" from "Underperform" and hiked its price target to $43 from $34. The stock has an average rating of "Hold" and a consensus price target of $44.43.
Hot Stocks to Watch No. 8: Ralph Lauren Corp. (NYSE: RL) will report fiscal Q1 2015 numbers Wednesday morning. The upscale retailer is expected to post EPS of $1.76, down notably from EPS of $1.94 posted in the same quarter a year ago. Whisper numbers are a penny less than forecasts at $1.75. While the company surpassed estimates in the last quarter, guidance issued for this quarter and the full year was below analysts' expectations. The company expects FY15 revenue to grow 6% to 8% to $7.9 billion. That is shy of analysts' estimates of revenue and earnings of $8 billion and $8.69 per share. The luxury retailer, however, is not curtailing expansion efforts. RL plans to further invest in new products, particularly accessories, and Polo for women. It will also continue to grow internationally. The company believes these moves will create greater value for shareholders. Of 24 analysts who cover RL, 14 rate it "Buy" and 10 have a "Hold" rating.
Hot Stocks to Watch No. 9: Zulily Inc. (Nasdaq: ZU) is set to post Q2 numbers after today's close. Analysts expect revenue to increase 87.5% year over year (YOY) to $271.9 million, the higher end of the company's guidance of $261 million to $276 million. Adjusted net income is expected to be $4.57 million, up 15% YOY, with an adjusted EPS of $0.36. The online retailer has beaten analysts' adjusted EPS forecasts in four out of eight quarters. The consensus analyst recommendation is "Buy," with a median price target of $48.86, according to Nasdaq research. With shares currently trading at $34.42, that's an attractive 42% upside potential.
Hot Stocks to Watch No. 10: Prudential Financial Inc. (NYSE: PRU) will post Q2 numbers after the closing bell. Expectations are for the financial services company to reports EPS of $2.34, up from $2.30 in the same quarter a year ago. Whisper numbers are bullish, with PRU posting EPS of $2.42. Rating agency Fitch recently reaffirmed its positive outlook on PRU, citing its improved operating and earnings profile, which has benefited from recent acquisitions and improved market conditions.
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