Stocks Plummet as Earnings Reports Disappoint; Adobe and SLB Trade Around Buy Points
Stock markets experienced a sharp decline last week as earnings reports disappointed investors. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq composite all fell significantly, driven, in part, by a surge in the 10-year Treasury yield. Additionally, the reaction to earnings and guidance from companies has been predominantly negative.
However, despite the overall negative sentiment, there are several S&P 500 stocks worth considering. Adobe and SLB (Schlumberger) are currently trading around buy points, indicating potential opportunities for investors.
Adobe’s stock saw a 2.7% drop in Friday’s market session, closing at 540.96. However, it managed to find support above the 50-day line and closed above the 21-day line. On a weekly basis, Adobe’s stock declined by 1.4%.
MarketSmith reports that Adobe shares have formed a flat base with a buy point of 570.24. Additionally, the relative strength line for Adobe stock is rising, indicating its outperformance compared to the broader S&P 500 index. Furthermore, Adobe’s earnings-per-share growth has accelerated in the last two quarters.
Adobe recently announced over 100 new generative AI features and updates for its creative software at its annual Max conference in Los Angeles. The company received positive reactions from Wall Street analysts, and its stock has shown strength in the market.
Meanwhile, SLB’s stock dropped 2.9% to 58.21 on Friday after the company reported its third-quarter earnings, falling below the 50-day line. On a weekly basis, SLB’s stock fell by 1.3%.
SLB has a short flat base with a buy point of 62.12. Aggressive investors can consider Wednesday’s high of 61.20 as an early entry point. Despite the ongoing Israel-Hamas war clouding the oil market outlook, SLB remains optimistic about its international operations’ growth. The majority of SLB’s sales come from its international work, with revenue from its international segment growing 12% to $6.61 billion.
Another company worth considering is Fair Isaac Corporation (FICO), which saw a 0.8% dip in its stock price to 912 on Friday but gained 1.9% for the week. FICO has a flat base with an official entry of 916.41.
FICO, a data analytics company, is best known for its FICO score—a measure used by consumer lenders in the U.S. to assess consumer credit risk. Analysts anticipate FICO’s earnings to grow 20% in Q4, with revenue increasing 11%. Over the next four fiscal years, analysts forecast solid EPS growth for FICO, anticipating earnings to reach $40.70 per share by 2027.
UnitedHealth Group (UNH) saw a 0.9% drop in its stock price to 527.03 on Friday and experienced a 2.3% decline for the week. However, the company’s Q3 results exceeded estimates, and it slightly increased its low-end 2023 earnings guidance.
UnitedHealth’s adjusted earnings rose 13.3% to $6.56 per share compared to the previous year, while revenue climbed 14.2% to $92.36 billion. The company raised its full-year 2023 EPS guidance and has a positive outlook for the fourth quarter.
Lastly, Costco’s stock fell 2.25% to 552.93 on Friday, losing 2.45% for the week. The stock dropped below the 571.16 buy point from a flat base and closed the week below the 50-day line.
Costco reported its full-fiscal year and fourth-quarter results in September, which showed a slowdown in earnings growth. However, total revenue grew by 9.5% to $78.94 billion.
CEO Craig Jelinek will step down on January 1, 2023, and COO Ron Vachris will take over as chief executive. Despite the recent downturn in the stock’s performance, Costco remains a prominent player in the retail industry.
In conclusion, while the overall market experienced a decline due to disappointing earnings reports, there are opportunities for investors. Adobe and SLB are trading around buy points, indicating potential for growth. Additionally, FICO, UnitedHealth, and Costco offer investment possibilities, despite recent stock price declines. As always, investors should conduct thorough research and consider their risk tolerance before making any investment decisions.
Disclaimer: This article is for informational purposes only and should not be considered as financial advice. The market is subject to volatility, and investors should conduct their own research before making any investment decisions.
