Wall Street has a busy week ahead packed with earnings from these stock giants. Find out what to watch for in reports from Gilead Sciences, Inc. (NASDAQ:GILD), Yahoo! Inc. (NASDAQ:YHOO), Chipotle Mexican Grill, Inc. (NYSE:CMG) and Alphabet Inc (NASDAQ:GOOGL).
Read Wall Street’s Week Ahead Part 2, here, to see what’s ahead for other companies reporting this week including GoPro, LinkedIn, and General Motors.
Gilead Sciences, Inc.
Gilead will be reporting Q4 earnings on Tuesday, February 2, after market close. Analysts expect the company to post earnings of $2.99 on revenue of $8.11 billion, compared to the same quarter of last year in which the company posted $2.18 and $7.2 billion, respectively.
Gilead is a bio-tech favorite thanks to its dominant position in the hepatitis C market. Harvoni and Sovaldi, its two hepatitis C flagship products, are responsible for more than half of the company’s revenue. Analysts will be looking for prescription growth in these areas. Analysts are also expecting updates on the company’s robust pipeline, which includes therapies to treat HIV, cancer, and colitis.
Although Gilead has dominated the hep C market, the company has new competition in the arena: Merck. Late last week, Merck earned FDA approval for a competing hepatitis C drug. Merck’s hep C regimen will be priced at $54K, compared to Gilead’s Harvoni and Sovaldi which are priced at $94K and $84K, respectively. Although Merck’s entrance into the market will not be reflected in this earnings report, analysts are wary to see how it will impact future sales.
According to TipRanks, 10 analysts are bullish on Gilead while 2 remain neutral. The average 12-month price target between these 12 analysts is $126.82, marking a 53% potential upside from where shares last closed.
Chipotle Mexican Grill, Inc.
The fast-casual Mexican food chain will report Q4 earnings Tuesday, February 2, after market close. Analysts expect the company to post earnings per share of $1.87 on revenue of $1.01 billion, down from the same quarter of last year in which the company posted earnings of $3.84 on revenue of $1.07 billion.
These decreases are due to the E. coli nightmare that Chipotle seemed unable to wake up from this quarter. What started a few months ago with a handful of incidents in Oregon slowly spread across the country. Two weeks ago, CEO Steve Ells said he was “hopeful” that the CDC would announce the official end of the outbreaks. Ells said, “We know that Chipotle is as safe as it’s ever been before.” However, analysts are bracing for this to take a toll on the company’s sales and margins. Investors are hoping for a strong outlook that proves the company can put this episode behind it. Aside from the virus outbreak, analysts are also wary of the impact that rising beef costs will have on earnings.
According to TipRanks, 12 analysts are bullish on Chipotle, 2 are bearish, and 14 remain on the sidelines. The average 12-month price target between these 28 analysts is $529.95, marking a 17% potential upside from where shares last closed.
Google’s relatively new parent company, Alphabet, will post Q4 earnings tomorrow after market close. Since Alphabet was created to allow offshoot projects to focus on exploratory endeavors, the company has already explained that it will post earnings in two segments: Google and “Other Bets.” For both segments combined, analysts estimate Alphabet will post EPS of $8.09 on revenue of $20.8 billion, compared to $6.88 and $18.1 billion, respectively, in the same quarter a year prior.
Investors are looking forward to this first glimpse into Google’s moonshot projects, which include endeavors such as Nest Labs and Calico. Analysts are bracing for losses in these experimental segments, though estimates range from loses of $1 billion to $3 billion.
Google, Alphabet’s core business, consists of search, YouTube, Chrome, Android, and others. Analysts will be looking for Google’s advertising revenue levels, margins, and profitability. Estimates find that Google search rules an overwhelming 90% of the search engine market, though analysts remain concerned about Google’s declining cost-per-click levels due to lower engagement rates on Mobile.
According to TipRanks, 19 analysts are bullish on Alphabet while 1 remains neutral. The average 12-month price target between these 20 analysts is $876.76, marking a 15% potential upside from where shares last closed.
Yahoo will post fourth quarter earnings on Tuesday, February 2 after market close. Analysts expect the company to post earnings of $0.13 on revenue of $1.19 billion, down from $0.30 but slightly up from $1.18 billion, respectively, in same quarter of last year.
The company has come under increasing pressure as its market share for advertising continues to slip to competitors such as Google and Facebook. Many have been pressuring for a change in management, pointing at CEO Marissa Mayer, who many claim have failed to reinvigorate the company. Analysts will be listening for turnaround plans for the search engine segment of Yahoo during the conference call.
Furthermore, at this point it seems that Yahoo will not be spinning off its remaining shares of Alibaba. However, the company may instead spin off its core Internet business into an independently publicly traded company. Separately, analysts will be keeping an eye on margins as the company invests in new hires and better content to fuel engagement.
According to TipRanks, 7 analysts are bullish on yahoo while 6 remain on the sidelines. The average 12-month price target between these 13 analysts is $40.18, marking a 36% potential upside from where shares last closed.