These Companies Just Slashed Their Earnings Guidance — Should You Buy?
Portfolio Pulse from Aditi Ganguly
Despite the S&P 500's strong performance in 2023, Wall Street anticipates a pessimistic earnings outlook for Q4 due to interest rates and economic challenges. FactSet reports a 5.8% decline in estimated EPS for S&P 500 companies since Sept. 30. Boeing, FedEx, and Lululemon have all cut their earnings guidance, yet analysts remain optimistic with Buy ratings and significant potential upsides for their stocks.
December 29, 2023 | 8:00 pm
News sentiment analysis
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NEUTRAL IMPACT
FedEx shares rose 43% this year but fell 11% recently due to a negative revenue outlook. Analysts from Stephens & Co. and Barclays maintain Overweight ratings with high price targets.
FedEx's recent share price drop due to negative revenue outlook is countered by analysts' positive ratings and expectations of interest rate cuts, leading to a neutral short-term impact.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Boeing cut its production outlook for Q4 but saw a 36% YTD stock increase. Lufthansa ordered 40 planes, and UBS Group maintains a Buy rating with a $315 target.
Despite the reduced production guidance, Boeing's stock has performed well, and the new Lufthansa order along with UBS's Buy rating and high price target suggest a positive short-term impact.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Lululemon's Q3 revenue beat estimates, but Q4 growth is uncertain. Stifel maintains a Buy rating with a $596 target, over 16% potential upside.
Despite Lululemon's cautious Q4 outlook, the strong Q3 performance and Stifel's optimistic view with a high price target indicate a positive short-term impact on the stock.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 85