American stocks had a strong performance this week as the Federal Reserve embarked on an interest rate cutting cycle in its bid to engineer a soft landing. The S&P 500 index jumped to a record high and analysts see it continuing its strong performance.
Similarly, the Dow Jones and Nasdaq 100 indices continued their strong comeback while American bond yields plunged. Globally, other top indices like the German DAX, Japan Nikkei 225, and French CAC 40 also continued rising.
Looking ahead, stocks will likely continue reacting to the Federal Reserve action since most companies have already published their financial results and the third-quarter numbers are around the corner. Here are some of the top stocks to watch next week.
Accenture | ACN
Accenture is the biggest IT consulting company in the world with a market cap of over $220 billion. The company partners with other firms across all industries to implement their technologies.
Over the years, the company has become a specialist in industries like cloud computing, application development, cybersecurity, and artificial intelligence.
This year, however, the Accenture stock price has not done well even as IT spending accelerates. It has dropped by over 4% this year, underperforming the likes of Infosys, Cognizant Technology, and Wipro.
This performance happened after it missed both on revenue and earnings in the last financial results. Its revenue came in at $16.47 billion, missing estimates by $72 million while its earnings per share of $3.04 was lower than expectations by $0.03.
Therefore, its next earnings, scheduled on September 26, will be important as they will provide more colour about its business. Analysts expect its revenues to come in at $16.37 billion and its EPS to drop to $2.65.
Micron | MU
Micron is a leading technology company with a market cap of over $96 billion. It is a semiconductor firm that focuses on storage and memory solutions. As a result, the firm has become a major player in the artificial intelligence industry.
Micron stock has not done well this year as concerns about its inventories and growth rise. It has risen by less than 5% this year and is down by over 43% from its highest point this year. Analysts at Stifel, JP Morgan, and Citigroup have also trimmed their expectations about the company.
Therefore, Micron’s financial results on September 25 will provide more information about its business. On the positive side, its up revisions in the past 90 days has been higher than the negative ones. Analysts see its revenue coming in at $7.65 billion, up from $6.8 billion in the last quarter.
Read more: Micron vs. Nvidia: why Micron might be the smarter AI investment
Costco | COST
Costco, one of the biggest players in the retail industry, will also publish its financial results on September 26.
These numbers will come at a time when its business and stocks are doing well. It has jumped to a record high, bringing its valuation to over $402 billion.
Costco’s results will shed light on the number of subscribers after the company increased prices recently. They will also provide more information about the state of the American consumer as inflation growth slows.
The average revenue estimate is $79.99 billion, up from $58.5 billion in the previous quarter and $78 billion in the same period last year. Costco has a long record of beating analyst estimates on earnings and revenues.
The biggest concern about the Costco stock is that it is highly overvalued. It has a forward P/E ratio of 54, higher than Nvidia. That is a big number for a company whose forward growth estimate is 6.46%.
Read more: Costco stock is more overvalued than Nvidia: still a buy?
AutoZone | AZO
AutoZone stock has pulled back sharply in the past few weeks. It has dropped in the last four consecutive days, reaching its lowest point since July 26. Also, it is down by over 65 from its highest point this year.
AutoZone’s performance has diverged from Carvana, which has gone parabolic, reaching a high of $170, up by almost 280% this year.
Its stock has underperformed because it missed its revenues in the last financial results. Its $4.2 billion revenue missed estimates by about $48.75 million. These numbers meant that its business was not growing as consumers slowed their vehicle purchases.
Analysts expect its revenue to come in at $6.22 billion while its earnings per share will be $53.41. It has had five down revisions in the last 90 days against 3 up revisions.
There will be more companies that will publish their earnings next week. Stitch Fix, the online clothing retailer, will release its earnings on Monday. While its stock has more than doubled from its lowest point this year, it remains sharply lower than its all-time high.
The other top companies to watch will be KB Home, THOR Industries, Cintas Corporation, Jefferies Financial Group, and CarMax.
Read more: Carvana stock price has more upside despite stretched valuation
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