SP 500 Earnings: Walmart and Nvidia Report This Coming Week

Nvidia’s weighting in the various indices / ETF’s:

  • SP 500: 4.25%
  • Nasdaq 100 (QQQ): 5.21%
  • Semiconductor ETF (SMH): 25%

Recent analyst target price changes:

  • 2/16/24: Loop Capital starts NVDA w a target price of $1,200;
  • 2/15/24: Piper Sandler $620 to $850;
  • 2/13/24: UBS from $580 to $850;

Nvidia reports Wednesday, 2/21/24 after the closing bell. Per Briefing.com, street consensus expects $4.59 in EPS on $20.4 billion in revenue. (Clients have no direct investment in NVDA shares, but instead are long primarily through the QQQ’s and the SMH.)

Walmart reports Tuesday morning, February 20, 2024, before the opening bell. When Walmart reported their Q3 ’24 in mid-November ’23, the stock fell from $170 to $150 in the days following on a gross margin miss, and some not very-well explained one-time litigation charges. Here is this blog’s earnings preview for Walmart’s Q4 ’24 (ends January ’24).  Like Alphabet, Amazon, and META, Walmart is getting into advertising, which could help margins over and above what AI and supply-chain automation might achieve in terms of margin expansion.

SP 500 data:

  • The forward 4-quarter estimate (FFQE) fell $0.20 this week from $242.77 to $242.57;
  • The PE ratio fell to 20.6x from last week’s 20.7x;
  • The SP 500 earnings yield rose 2 basis points to 4.85% from 4.83% last week;
  • The Q4 ’23 bottom-up SP 500 EPS estimate has risen for 6 consecutive weeks, ending last week at $56.93;
  • The SP 500’s EPS “upside surprise” for Q4 ’23 earnings ended the week at 6.9%, up from +6.8% last week, and 6.4% the week prior;
  • The revenue upside surprise for Q4 ’23 is 1.1% as of this week;

Summary / conclusion: Some say Q4 ’23 earnings season unofficially ends this week, and this clip from this blog’s quarterly EPS and rev growth rate from LSEG’s “earnings scorecard” shows that expected Q4 ’23 EPS growth rate is now 9.6% versus $.4% expected in early January ’24. Q4 ’23 earnings wound up much stronger than expected for Q4 ’23, on mainly inline revenue growth.

Look at that round trip in “expected” SP 500 EPS growth starting at the peak on 9/30/23, and then through Friday, 2/16/24.

This happens more than you think.

Thursday night’s, February 15th’s earnings reports from Applied Materials (AMAT), Trade Desk and Coinbase were very strong. It would be great to see Nvidia pull back 10% this week, but with AMAT’s report it also tells me “old semi’s” like Applied, Micron, are still in the good part of the cycle.

The 2nd half of February calendar returns have not been great. I was trying to find the bar chart with 100 years of history on how / where the 2nd half of February returns were displayed (couldn’t find it) but it’s one of the worst 2 week periods of the year.

The SP 500, the Nasdaq 100 and the QQQ’s could use a good flush.

None of this is advice or a recommendation. Past performance is no guarantee of future results. Investing can involve the loss of principal, even with short time horizons. Readers should gauge their own comfort with portfolio volatility and adjust accordingly.

Thanks for reading.



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