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Yahoo
15 hours ago
- Business
- Yahoo
Earnings Preview: What to Expect From Kroger's Report
Cincinnati, Ohio-based The Kroger Co. (KR) operates as a food retailer in the United States. With a market cap of $47.2 billion, the company also operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. The company is expected to announce its fiscal Q2 2025 earnings results on Thursday, Sept. 11. Ahead of this event, analysts expect the company to report an adjusted EPS of $0.99, up 6.5% from $0.93 in the year-ago quarter. It has surpassed or matched Wall Street's earnings estimates in each of the last four quarters. More News from Barchart Warren Buffett Warns Inflation Turns Business Into 'The Upside-Down World of Alice in Wonderland' But Weeds Out 'Bad Businesses' Why GOOGL Stock May Be the Market's Next Big Winner Alphabet Posts Lower Free Cash Flow and FCF Margins - Is GOOGL Stock Overvalued? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. For fiscal 2025, analysts expect the company to report an adjusted EPS of $4.76, up 6.5% from $4.47 in fiscal 2024. In addition, adjusted EPS is anticipated to grow 9.7% year-over-year to $5.22 in fiscal 2026. Over the past year, KR shares surged 34.1%, outperforming the S&P 500 Index's ($SPX) 18.3% gains and the Consumer Staples Select Sector SPDR Fund's (XLP) 4.9% returns over the same time frame. On June 20, KR shares grew 9.8% following the release of its Q1 earnings. The company's revenue totaled $45.1 billion, missing the Street's estimates. Moreover, its gross margin expanded by 100 bps year-over-year. KR's adjusted EPS for the quarter came in at $1.49 and surpassed the consensus estimates by 2.8%. The consensus opinion on KR stock is moderately optimistic, with an overall 'Moderate Buy' rating. Out of the 20 analysts covering the stock, opinions include 11 'Strong Buys' and nine 'Holds.' The mean price target of $76.84 indicates a 7.5% upside potential from current price levels. On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Business
- Yahoo
Should You Grab This ‘Strong Buy' Semiconductor Stock Ahead of Earnings?
Cadence Design Systems (CDNS) is in focus this Monday ahead of its upcoming Q2 2025 earnings report, scheduled for release after today's closing bell. Analysts project non-GAAP earnings per share (EPS) of $1.57 and revenues between $1.25-1.27 billion, representing an impressive 18.7% year-over-year growth. Ahead of earnings, the specialized semiconductor design stock set an all-time high price at $335.16 on July 25, reflecting widespread investor optimism going into the Q2 results. CDNS is up 10% year-to-date, outpacing the broader S&P 500 Index ($SPX). The stock ended last week perched above its upper Bollinger Band, suggesting that CDNS shares could be somewhat overbought going into tonight's earnings. More News from Barchart Alphabet Posts Lower Free Cash Flow and FCF Margins - Is GOOGL Stock Overvalued? Tech Earnings, Tariff Deadline and Other Key Things to Watch this Week Option Volatility And Earnings Report For July 28 – Aug 1 Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Overall, the options market is pricing in a post-event price swing of 6.12% in either direction for Cadence stock, which is less dramatic than its average earnings reaction of 7.41% over the past four quarters. Inside the Chip Business at CDNS While the rally in CDNS raises the odds for a 'sell the news' earnings reaction, the stock's strength has been driven by positive results in its core electronic design automation (EDA) business, which boasts exceptional gross profit margins of 86%. The EDA business has been booming amid increasing demand in the artificial intelligence (AI), hyperscale, and automotive markets. Cadence's AI portfolio, which includes Cerebrus, Verisium AI, and Allegro X AI solutions, has experienced rapid adoption as system companies develop next-generation AI products. The System Design and Analysis division shows promising momentum, driven by solutions like Allegro X and AI-powered Substrate Router, while the IP business division is projected to achieve 26.5% year-over-year growth due to rising demand for AI and chiplet solutions. However, there are over potential distortions to Q2 results due to U.S.-China tech tensions and export restrictions, with Cadence and peer Synopsys (SNPS) cleared to resume exports to the mainland as recently as July 3. Is CDNS Stock a Buy? Recent analyst upgrades for CDNS have boosted investor confidence, with Loop Capital raising its price target to $370 and Goldman Sachs initiating coverage with a 'Buy' rating and ambitious $380 target. The company's strategic partnerships with industry leaders like Nvidia (NVDA), Taiwan Semiconductor (TSM), Qualcomm (QCOM), and Intel (INTC) position it favorably for continued growth in the rapidly growing semiconductor space, and the stock boasts a 'Strong Buy' rating overall from the 19 analysts in coverage. With a substantial backlog of $6.4 billion and current remaining performance obligations (RPO) of $3.2 billion as of the most recent quarter, the company demonstrates strong business momentum despite macroeconomic uncertainties. The ratable software model and expanding relationships with foundry partners further strengthen Cadence's market position. That said, ongoing macroeconomic uncertainties and export control issues with China warrant monitoring - and at current prices, investors should be particularly wary of jumping on the CDNS bandwagon ahead of earnings. In addition to the typical event risk associated with quarterly earnings, the stock's rally appears somewhat stretched right now, which raises the odds for a negative post-event reaction. This article was created with the support of automated content tools from our partners at Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever. On the date of publication, Elizabeth H. Volk had a position in: NVDA. All information and data in this article is solely for informational purposes. This article was originally published on
Business Insider
2 days ago
- Business
- Business Insider
The Week That Was, The Week Ahead: Macro & Markets, July 27, 2025
Everything to Know about Macro and Markets The S&P 500 (SPX) touched new intraday highs on Friday, ending the week up 1.5%. Major indices finished the week on a strong note, thanks to solid corporate earnings and favorable trade developments. The Nasdaq-100 (NDX) and the Dow Jones Industrial Average (DJIA) ended the week 0.9% and 1.3% higher, respectively. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Weekly Gains on Strong Earnings and Trade Deals The S&P 500 posted its fifth straight day of closing records on Friday. Interestingly, the index ended above the 6,300 level for the first time on Monday. Strong earnings reported by several companies, notably by Google parent Alphabet (GOOGL) and telecom giant Verizon (VZ), fueled last week's rally. According to FactSet, out of the 34% of S&P 500 companies that have reported Q2 results so far, 80% have exceeded earnings expectations, a proportion that is above the 5-year average of 78%. However, the magnitude of earnings surprises is below average levels. Additionally, the trade agreement between the U.S. and Japan eased concerns about the ongoing tariff wars and contributed to last week's rally. U.S. President Donald Trump called it 'perhaps the largest Deal ever made,' while adding that Japan would invest $550 billion in the U.S. The deal lowers the tariffs on auto exports, a major driver of Japan's economy, to 15% from the existing 25% that is imposed across countries. A Big Week Ahead The week ahead is expected to be quite eventful, given that it includes the August tariff deadline, the July Federal Open Market Committee (FOMC) meeting, earnings reports from four of the Magnificent 7 stocks, and some key economic releases. The Federal Reserve's two-day policy meeting will be in focus this week, especially due to President Trump's persistent attacks on the central bank's Chair Jerome Powell. The independence of the Fed is being debated, with reporters expected to question Powell about the same at the post-meeting press conference. Despite growing pressure from Trump to slash interest rates, the Fed is expected to hold the benchmark short-term borrowing rate steady in a target range of 4.25% to 4.50%. Meanwhile, the August 1 deadline to raise tariffs is approaching this week. Trump's erratic trade policy decisions have been making headlines. Following the trade agreement with Japan, all eyes are on the possibility of a deal with the European Union (EU). Aside from Trump's trade stance, earnings from four of the Magnificent 7 stocks – Meta Platforms (META), Microsoft (MSFT), Amazon (AMZN), and Apple (AAPL), are eagerly awaited. Investors will be focusing on the commentary from management of these companies regarding the business backdrop and artificial intelligence (AI) spending. Finally, the Personal Consumption Expenditure (PCE) price index report, scheduled for release on Thursday, and the July nonfarm payrolls report, due on Friday, could impact investor sentiment. Experts expect the jobs report to indicate a deceleration in job additions in July compared to the previous month. Meanwhile, the PCE price index is expected to show a rise in inflation. Stocks That Made the News Alphabet impressed investors with its market-beating second-quarter revenue and earnings. The company raised its capital expenditure guidance for 2025 from $75 billion to $85 billion to support robust demand for its cloud offerings amid the ongoing AI boom. Verizon also delivered upbeat results for the June quarter, thanks to strength in its wireless service business. The company raised the lower end of its full-year earnings guidance to reflect strong demand for its premium plans and the Trump administration's new tax law. IBM (IBM) stock fell even after delivering better-than-expected second-quarter results. The company's software business lagged the Street's revenue expectations. The tech giant also noted that some clients are being cautious in signing new deals due to geopolitical pressures. Tesla (TSLA) reported dismal second-quarter results, with the electric vehicle (EV) maker's CEO Elon Musk cautioning investors about a 'few rough quarters' ahead due to the expiration of the federal tax credits. TSLA stock is down 22% year-to-date, as investors are concerned about weak demand due to macro pressures and rising competition, a lack of innovation, and Musk's political ambitions. Intel (INTC) reported mixed results for the second quarter. The chip giant exceeded the consensus revenue expectations, but the bottom line fell short of estimates. Further, CEO Lip-Bu Tan announced significant cuts in chip factory construction. The company is streamlining its operations and cutting costs in an attempt to revive its business. Kohl's (KSS) made headlines this week as it became the latest stock to join the meme stock frenzy. Retail investors are buying stocks of companies like Kohl's and online residential real estate platform Opendoor Technologies (OPEN), which generally have high short seller interest, to trigger rapid rallies. UnitedHealth (UNH) stock declined after the health insurer disclosed in an SEC filing that it 'proactively' reached out to the U.S. Department of Justice (DOJ) after reports of investigations into certain aspects of the company's participation in the Medicare program surfaced. The company added that it has started complying with formal criminal and civil requests from the DOJ. Data analytics company Palantir Technologies (PLTR) stock continued to rally this week, thanks to AI tailwinds. PLTR stock is now one of the 20 most valuable companies in the U.S. Paramount (PARA) secured the Federal Communications Commission's (FCC) approval for the $8 billion merger with Skydance Media. The Q2 2025 earnings season is in full swing, with many prominent U.S. companies' earnings scheduled for this week. Spotlight will be on the earnings reports of PayPal (PYPL), Visa (V), Boeing (BA), SoFi Technologies (SOFI), UnitedHealth (UNH), Microsoft (MSFT), Meta Platforms (META), Alibaba (BABA), Ford (F), Apple (AAPL), Amazon (AMZN), Exxon Mobil (XOM), and Chevron (CVX).
Business Insider
4 days ago
- Business
- Business Insider
U.S. Stock Futures Edge Up as S&P 500 and Nasdaq Continue Record Run
U.S. stock futures were slightly higher on Thursday evening, following yet another day where both the S&P 500 Index (SPX) and the Nasdaq Composite closed at record highs. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 were up 0.07%, 0.11%, and 0.10%, respectively, at 7:36 p.m. EDT on July 24. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Stocks kept climbing Thursday, with the S&P 500 and Nasdaq hitting new all-time highs during the day and at the close. This brings the S&P 500's total record closes for 2025 to thirteen, four this week alone. The Nasdaq also set three records this week, topping 21,000 on Wednesday. However, the Dow Jones witnessed a slight dip of 0.7%. The recent surge to new highs has been bolstered by a robust earnings season and recent developments in international trade. Earlier this week, President Trump announced a 'massive' trade deal with Japan, which notably includes 15% 'reciprocal' tariffs. In a notable event on Thursday evening, President Trump publicly clashed with Fed Chair Powell over renovation costs during a visit to the Federal Reserve. During the discussion, President Trump gave a renovation cost that Fed Chair Powell publicly said was wrong. However, after Powell's correction, President Trump softened his stance on the Fed chief, reassuring markets by stating he had no plans to fire him.
Yahoo
6 days ago
- Business
- Yahoo
What an Elevated CAPE Ratio Means for Stocks
Since we specialize in options here at Schaeffer's Investment Research, I usually focus on technical analysis, sentiment gauges, and seasonal patterns. These types of indicators lend themselves to shorter term time frames. This week, I'm shifting gears a bit and examining the P/E ratio on the S&P 500 Index (SPX). Specifically, I'm looking at the Shiller CAPE (Cyclically Adjusted Price Earnings) Ratio. This metric calculates the P/E ratio of S&P 500 stocks while smoothing out earnings by examining the past ten years and adjusting them for inflation. The chart below shows the current CAPE Ratio of about 38 is extremely high. We have the data since 1928 and the only two times that it was higher than now was in the late 1990's, just before the tech bubble popped and for a brief period in 2021. Next, let's see how the S&P 500 has performed given the reading on the CAPE Ratio. S&P 500 Returns & CAPE Ratio The tables below summarize S&P 500 returns of various timeframes based on the level of the CAPE Ratio. The returns are annualized, which makes the figures, especially at longer timeframes, more intuitive. For reference, since 1928, the average one-year return of the S&P 500 is about 8%. So that's a good benchmark for comparison for each timeframe. The first table shows how stocks performed with the CAPE Ratio above 25, our current situation. The second table shows how stocks performed at the other extreme, when the CAPE Ratio was below 12. An elevated CAPE Ratio has typically led to an underperforming stock market. At longer term timeframes, the difference has been large. With the CAPE Ratio above 25, the S&P 500 has averaged a return of 6.6% over the next year with 69% of the returns positive. However, when the CAPE Ratio was below 12, the average return was 15.4% with 80% of the returns positive. Buy and hold investors should be nervous about the long-term results. With the CAPE Ratio elevated, the S&P 500 has averaged a return of 4.2% per year with 53% of the returns positive. When the CAPE Ratio was below 12, the five-year annualized return was 11% and, amazingly, every single one of the returns was positive. The last time we saw a reading below 12, however, was 1986. For completeness, here is a table showing S&P 500 returns with the CAPE Ratio between 12 and 25. Interestingly, the index has performed better all the way out to two years with the CAPE Ratio above 25 compared to when the ratio was between 12 and 25. It's long term investors with time horizons of at least five years who might want to lower expectations. Implications The data above shows a high CAPE Ratio has led to a significantly underperforming stock market over the next several years. This should make buy and hold investors nervous. As options traders, we are less affected, and this shows up in the data. With the CAPE Ratio above 25, the S&P 500 has performed better or just as well compared to when the ratio was at more moderate levels as far out as the next two years. Sign in to access your portfolio
