A Rough Day in the Market
It’s a bloodbath in the market today as the S&P 500 Index (SPY) is down over 1% and the Nasdaq Composite Index (QQQ) is nearing a 2% decline, and five popular stocks are making big moves lower. Let’s take a quick look at each, so you can dig deeper and see if you should be a buyer of one or more of them.
United Rentals, Inc. (NYSE: URI) is down about 9.7% following the release of its third-quarter earnings results after the market closed yesterday. The equipment rental giant reported revenues of $2.12 billion and adjusted EPS of $4.74, which beat analysts’ expectations of $2.02 billion in revenue and $4.56 in adjusted EPS. The company also raised its revenue outlook for the year, now calling for a range of $7.77 billion-$7.87 billion compared with its previous outlook of $7.64 billion-$7.84 billion.
A beat and raise is about as good as it gets, and United Rentals’ valuation is intriguing, so I think the sell-off is overdone.
Textron Inc. (NYSE: TXT) is down about 9.4% following the release of its third-quarter earnings results before the market opened this morning. The aircraft manufacturer reported revenues of $3.2 billion and adjusted EPS of $0.61, both of which came up short of analysts’ expectations of $3.5 billion in revenue and $0.76 in adjusted EPS. The company also narrowed its outlook on the full year, now calling for adjusted EPS in the range of $3.20-$3.30 compared with its previous outlook of $3.15-$3.35.
The earnings miss was ugly, and Textron’s revenue and EPS were down on a year-over-year basis, so I think the beatdown is warranted and could continue in the trading sessions ahead.
Snap-On Incorporated (NYSE: SNA) is down about 7.7% following the release of its third-quarter earnings results before the market opened this morning. The equipment manufacturer reports revenues of $898.1 million and adjusted EPS of $2.88, which were mixed compared with analysts’ expectations of $929 million in revenue and $2.86 in adjusted EPS.
Mixed results are less than ideal, and it’s important to note that Snap-On’s revenue declined on a year-over-year basis, so I think the sell-off is warranted and I would not touch the stock today.
Sealed Air Corp (NYSE: SEE) is down about 9.3% following a press release in which it provided preliminary results for its third quarter and also lowered its full-year outlook. The packaging solutions provider stated that it expects net sales of approximately $1.2 billion and adjusted EPS in the range of $0.60-$0.61 in the third quarter, which came in mixed compared with analysts’ expectations of $1.19 billion in revenue and $0.65 in adjusted EPS.
For the full year, Sealed Air stated that it now expects net sales of approximately $4.7 billion and adjusted EPS in the range of $2.40-$2.45, which is down from its previous outlook of net sales of approximately $4.75 billion and adjusted EPS in the range of $2.45-$2.55.
Mixed preliminary results and an outlook reduction. Ouch, your stock deserves this, Sealed Air.
Activision Blizzard, Inc. (Nasdaq: ATVI) is down about 6.7% following a press release by the video game giant stating that its newly-released Call of Duty: Black Ops 4 game had sold more than $500 million in the first three days of its release, which apparently was not good enough for Wall Street.
Activision Blizzard is one of the best ways to invest in the rise of e-gaming and video games in general, so I think any continued weakness in the stock would represent an attractive entry point for long-term investors.