Studying the markets and observing what’s to come are essential to succeed in the stock market. While advanced online trading brokers have brought in a range of features to ensure effective trading, you still need to study analyst opinions and be a keen observer of the markets.
Costco Exceeds Earnings Estimates
The week has been dominated by some positive news of companies exceeding their earnings estimates, particularly one company that has been doing so consecutively - Costco Wholesale ($COST). The company has been doing great for two years now. Its sales growth has been strong, and its profit margin has managed to keep expanding.
Its adjusted EPS (earnings per share) soared to $8.19 in fiscal 2019 from $5.89 it posted in fiscal 2017. This has been having a positive impact on its shares too. In the last two years, Costco has been among the hot performing large-cap stocks. It has doubled during that period from lower than $160 in 2017 October to nearly $300 currently. However, analyst Adam Levine-Weinberg reckons this momentum couldn’t be sustained.
Apple’s Earnings Report Hugely Anticipated
There is also the expectation of Apple’s ($AAPL) earnings report later this month. While October’s second half will start with Netflix ($NFLX) providing its Q3 update on the 16th, followed by Facebook ($FB), Apple’s update on the 30th of October will be particularly interesting because its fiscal Q4 results will provide investors with insight into revenue from its iPhones as well as its services sector. There has been a recent decline in iPhone revenue, and investors will want to see the decline bottom out. And since the iPhone does not drive Apple’s growth anymore, investors will be expecting the services segment to show strong growth to make up for that.
Revenue from iPhone sales declined this year in all three quarters reported till now, following strong growth last year. Back in fiscal 2018, Apple witnessed significant demand for iPhone X, iPhone 8 and 8 Plus models when revenue had a 17% jump. If revenue keeps pulling back in 2020 fiscal, Apple’s profits could take a big hit.
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