Why You Need to Be Your Own Stock Analyst
Sell-side analysts are often criticized for acting too slowly when it come to downgrading companies and lowering estimates. That means if you rely on the experts, you'll be reacting late too.
Sell-side analysts are often criticized for acting too slowly when it come to downgrading companies and lowering estimates. That means if you rely on the experts, you'll be reacting late too.
Or will it disappoint? Investors -- and taxpayers -- will be watching on Thursday, when GM posts its latest earnings. Despite analyst expectations of a full-year profit, the automaker has warned that fourth-quarter results will fall "significantly" from previous periods.
U.S. companies are raising their outlook not just for oversees growth, but for domestic profits as well. The last time American executives were this optimistic, stocks climbed 39% over the next 3 1/2 years, data compiled by Bloomberg show.
The "new normal" coined by Pimco posits a long era of diminished earnings and stock prices as overleveraged consumers and companies cut back. But it's not playing out that way. It seems Corporate America is growing less and less dependent on America.
Citigroup on Monday morning reported third quarter net income of $2.2 billion, topping Wall Street estimates and marking its third consecutive quarterly operating profit. Citi shares were up as much as 2.3% in premarket trading.
The earnings crunch rolls on this coming week, and analysts are looking for strong quarterly results, especially from Avon, Broadcom, Chevron and Southwest Airlines. Motorola, Weyerhaueser and Sunoco are expected to revert to profit from losses in the same quarter last year.
U.S. automaker Ford drove to a $2.6 billion profit in the second quarter, zooming past analyst expectations. Looking forward, CEO Alan Mulally said that he expects "even better financial results in 2011."
Ford Motor is set to deliver strong earnings when it reports second-quarter results Friday. After disastrously low sales in 2009, the auto industry as a whole has been in recovery mode this year -- and Ford has been one of the biggest beneficiaries of the revival.
While the sector is revving up, the chip and storage segments show the highest gains in revisions to earnings estimates. For instance, since earnings season kicked off, analysts' estimates for chipmakers have risen by 12.5%. Tech investors take note.
The industry titan is expected to post a soft quarter with an improving outlook. But analysts are still wary of its General Electric Capital Services bogeyman. Watch out if GECS's losses and impairments surpass the company's projections of $13 billion to $19 billion.
The irrational despondence that set in during the grips of the downturn is now giving way to unfounded exuberance. The most concrete sign of that now: Analysts expect S&P 500 companies to rack up earnings increases next year at an unprecedented rate.
The admission overshadows a good profit report for its fiscal third quarter. But the quarterly report covers a period before the gas-pedal recall and others, so the profit is likely to be short-lived as Toyota scrambles to make repairs and rebuild its reputation.
By all accounts, Ford Motor is on a roll, and analysts are hoping to see an upbeat fourth quarter when the automaker reports earnings on Thursday. Compared to other manufacturers, Ford is in an enviable position.












