The earnings season, typically a volatile yet critical time for investors, is nearing its conclusion. Amidst the flurry of reports, a few heavyweight companies are still preparing to unveil their financial results for the third quarter. Notable among these are Home Depot and Disney, both of which are expected to provide insights that may influence the trajectory of stock market performance following the recent election-induced rally. With over 450 companies from the S&P 500 already having reported their earnings, a striking 74% have managed to surpass analysts’ projections, according to data from FactSet. Now, as we approach the final stretch, the focus shifts to the expectations surrounding these remaining giants.
Scheduled to release its earnings report in the premarket on Tuesday, Home Depot is a primary focus for market observers. Previous guidance from the home improvement retailer indicated a headwind in sales momentum due to a more subdued consumer sentiment. Analysts from LSEG now predict a slight decline in year-over-year earnings, which reflects broader concerns about the housing and DIY market.
According to UBS, Home Depot is anticipated to report disappointing same-store sales figures, resulting from a notable downturn in demand for larger home improvement projects. This shift could force construction professionals to downscale their renovations and tackle smaller endeavors, potentially impacting the company’s bottom line. However, some analysts highlight that ongoing innovation and fresh product lines may help to sustain revenue in select categories. Historically, Home Depot has demonstrated resilience, having outperformed earnings expectations for 17 consecutive quarters, a streak that provides investors with a mixture of optimism and caution.
Following Home Depot, Live Nation Entertainment will also release its quarterly earnings before the market opens. The entertainment giant reported robust operating income last quarter, even though its revenues were in line with expectations. For this quarter, forecasts indicate a 10% decline in earnings compared to last year. However, the stock’s performance remains strong, enjoying a surprising 31% increase so far this year. Morgan Stanley has raised its price target for Live Nation, signaling confidence in its capability to capitalize on the persistent demand for live events and concerts.
Despite the projected dip in earnings this quarter, the overall sentiment remains positive, fueled by an anticipated upturn in 2025. Live Nation has seen a history of stock appreciation after earnings announcements, further solidifying its standing as an industry leader amidst changing consumer preferences.
As the week progresses, all eyes will turn to Walt Disney, which is slated to release its earnings report on Thursday morning. After a satisfactory previous quarter where the company beat expectations, the focus now shifts to Disney’s guidance for future growth. Analysts estimate that Disney may showcase a year-over-year earnings growth of over 30%, bolstered by strategic investments in its streaming services, which have recently turned a profit.
However, investor interest lies heavily in Disney’s outlook, as conveyed by Guggenheim analyst Michael Morris. The clarity on revenue and operating income projections could serve as a crucial indicator for market performance. Despite facing challenges following its last couple of earnings releases, where shares dropped significantly, the strong performance in the streaming sector could be a game-changer.
Finally, after the market closes on Thursday, Applied Materials is set to provide insights into its performance. The company previously reported results that exceeded expectations, and analysts are optimistic about slight growth in both earnings and revenues this quarter. Yet, it is worth noting that Applied Materials’ stock has not kept pace with the broader semiconductor industry, which has experienced tremendous growth. Investors are keen to see if Applied Materials can pivot its strategy to align with the soaring semiconductor sector represented by the VanEck Semiconductor ETF. Historically, the company tends to see minor uplift on earnings announcement days, which may reflect consistent investor confidence.
As these major players gear up to report their third-quarter earnings, investors are left scrutinizing every bit of information for trends that could ultimately dictate the market’s direction. With some companies facing potential declines while others look to seize opportunities, the convergence of diverse investor sentiments offers a captivating landscape leading into the final earnings countdown.