Earnings season is the heartbeat of the market - and every week brings a fresh set of opportunities and risks. With each report, we get new information about corporate health, investor sentiment, and the sectors driving leadership (or lagging).
In the Weekly Beat, we spotlight the most important earnings reactions from the prior week - the winners, the losers, and the surprises that moved markets. Then we shift our focus forward, breaking down the biggest setups and expectations for the week ahead.
Whether it’s mega-cap leaders, niche growth stories, or the sectors most tied to the economy, we’ve got you covered on what traders need to know right now.
After reporting a double beat, Gilead Sciences $GILD had its best earnings reaction in 12 quarters. The market is optimistic about its recently FDA-approved drug for HIV prevention.
The advertising agency, Trade Desk $TTD, reported a double beat, but suffered its worst earnings reaction ever. The long-time CFO, Laura Schenkein, unexpectedly stepped down, sparking concerns over the future of the company.
There weren't any S&P 500 earnings reactions to cover, so we highlighted Franco-Nevada $FNV, which had its 3rd consecutive positive earnings reaction.
They are benefiting in a significant way from higher precious metal prices. Their net income has increased 210% year-over-year, far outpacing the underlying commodities.
Cardinal Health $CAH posted mixed results, and got slammed for it. The -7.2% reaction snapped a streak of 5 consecutive positive earnings reports, and was the worst earnings reaction in 17 quarters.
The primary reason for the selloff was due to management announcing the acquisition of Solaris Health for $2.4B. While this seems like a great long-term move, the market doesn't like the short-term hit to cash flows.
There weren't any S&P 500 earnings reactions to cover, so we highlighted CoreWeave $CRWV and Webtoon Entertainment $WBTN. The reactions were opposites.
CRWV reported mixed results, and the market punished shareholders with the most significant 1-day decline in the stock's short history. WBTN smashed Wall Street's expectations and surged over 80%, which was the stock's best day ever.
The networking hardware and software giant, Cisco Systems $CSCO posted better-than-expected headline results. However, the market was disappointed with the management team's forward guidance.
Like CSCO, the manufacturer of heavy machinery, John Deere $DE reported better-than-expected headline results, but gave disappointing forward guidance. This resulted in the worst earnings reaction in 14 quarters.
What's happening next week 👇
Retailers and Chinese stocks will be the most important earnings events next week.
The reports we'll be monitoring closest are Walmart $WMT, Home Depot $HD, Baidu $BIDU, and Kingsoft Cloud $KC.
Beyond those, we’ll also be watching:
The wannabee Costco $COST, BJ's Wholesale Club $BJ
One of the largest cybersecurity companies, Palo Alto Networks $PANW
The struggling retailer, Target $TGT
and many more.
It's set to be another eventful week, so there will be plenty to cover in The Daily Beat.
Now, let’s dig into the setups we'll be monitoring closest next week.
Here's the setup in WMT ahead of Thursday's earnings report 👇
Walmart is expected to post revenues of $175.89B and EPS of $0.73 in Thursday's earnings event.
The stock recently found resistance at the peak from earlier this year, but the bigger picture is more bullish as the price has been grinding up the right-hand side of a multi-month accumulation pattern.
If they sell the number, we expect the buyers to quickly step in as they continue to carve out this base.
On the flip side, nothing would be more bullish than if the bulls gapped the stock to new all-time highs.
Here are the past 3 years of earnings results & reactions for WMT 👇
Fundamentally, Walmart is a steady engine. Revenue growth has lived mainly in the ~2–8% year-over-year lane, while diluted EPS growth has ranged from low-single digits to low-20s depending on mix and pricing.
The reactions tell the story best...
2024 produced four straight green prints as execution and guidance beat cautious positioning.
That momentum snapped earlier this year with a -6.5% hit, then the bears followed through in May.
This week, the bears are trying to extend that new streak of negative earnings reactions to three.
Here's the setup in HD ahead of Tuesday's earnings report 👇
Home Depot is expected to report revenues of $45.42B and EPS of $4.72 in Tuesday's earnings event.
The stock is carving out a textbook accumulation pattern, and this earnings reaction could be the catalyst to resolve it.
Our line in the sand for HD is 420.
Below there, it's still messy.
But a close about that level would mark the beginning of a brand-new primary uptrend.
Here are the past 3 years of earnings results & reactions for HD 👇
Home Depot is more than just a retailer - it’s a proxy for the health of the U.S. housing and renovation cycle.
Recently, stabilization in housing turnover has sparked optimism that demand for big-ticket DIY and contractor supplies could rebound. The market will be listening closely to the management team's commentary on the housing market.
The company's EPS has been consistently declining for the past 3 years, but revenues started to rebound a year ago. The market will be watching closely to see if they can begin to drop that revenue growth to the bottom line.
The earnings reactions for HD reinforce the sloppy technicals. One quarter, the market rewards them for reporting, then the next quarter, they hate it. Snip snap, snip snap.
We want to see HD establish a new streak of positive earnings reactions before we can have any conviction in a breakout above 420.
Here's the setup in BIDU ahead of Wednesday's earnings report 👇
Baidu is expected to report revenues of $4.58B and EPS of $1.84 in Wednesday's earnings event.
Heading into the report, price is sitting right at a shelf of former lows. It's a make-or-break level.
The long-term trend is capped under heavy overhead supply, but near-term, everything hinges on 83.
Hold it, and BIDU can rally back toward triple digits.
Lose it, and the stock has big problems.
Here are the past 3 years of earnings results & reactions for BIDU 👇
Baidu is at the center of China’s search and AI ecosystem, but the bigger story is whether its cloud and AI bets can offset a slowing core ad business.
After a long streak of top and bottom-line growth, the company started reporting negative growth a year ago.
This also coincided with a new streak of consecutive negative earnings reactions, which is now up to 4 quarters.
Despite the negative earnings reactions recently, we have noticed positive drift after each of these sell-offs. This tells us that the bears don't have complete control of the stock.
Will this be the quarter that BIDU finally gets blasted below 83 and enters a new primary downtrend? We're about to find out!
Here's the setup in KC ahead of Wednesday's earnings report 👇
Kingsoft Cloud is another Chinese name that reports next week. It's one of the hottest Asian names in the market as it has recently rallied from 2 to 22 in 5 months.
They are expected to report revenues of $308M and EPS of $-0.13 in Wednesday's earnings event.
After a sharp reversal earlier this year, KC has settled into a tight consolidation.
Over the intermediate term, the path of least resistance is decisively higher, so long as it remains above the April 2023 peak.
This earnings event could serve as the catalyst to resolve the short-term consolidation, sparking a fresh leg higher.
On the flip side, if the bulls don't show up, the price will likely be stuck in the penalty box for another quarter.
Here are the past 3 years of earnings results & reactions for KC 👇
Kingsoft Cloud is a smaller player in China’s cloud infrastructure market, often viewed as a high-beta proxy for broader risk appetite toward Chinese tech.
As you can see, this company has a long history of negative EPS prints, though revenue growth has stabilized more recently.
The key is how the market has responded... KC has been rewarded in 2 of the last 3 earnings events, showing that investors are willing to give it credit for execution - even when fundamentals lag.
With another report due Wednesday morning, the bulls are hoping to keep that momentum alive and extend the run of positive surprises.
Thank you for reading.
- The Beat Team
P.S. If you want the best retail coverage on Wall Street, you need to be following Jeff Macke. Nobody breaks down the sector like he does - from big-box giants like Walmart and Home Depot to the high-flyers and the mall names in between.
Jeff’s research, Macke’s Retail Roundup, is hands down the best way to stay ahead of the most important trends in the retail space. He’s been doing this for decades, and when it comes to separating the winners from the losers, there’s nobody better.
With a packed retail earnings slate this week, there’s no better time to get plugged into Macke’s work.
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