ECB hiked rates by another 75 bp – as expected. The bank flags further tightening ahead, but dropped the reference on “next several meetings”. That backs our view that the ECB is set on another hike in December, but will then take stock and the battle between hawks and doves will become more heated, as Lagarde flags the shift to decisions to be taken at a meeting-by-meeting basis. The ECB decided to change the terms of the TLTRO loans after all, with the rate from November 23 to maturity the average key rate. At the same time, the bank offered more opportunities for early repayment of the loans. The renumeration of minimum reserves will be at the deposit rate now. EURUSD is holding just above parity for now, as markets digest the initial announcement and wait for Lagarde’s presser.
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
USDIndex – Slumped to under 110.00to109.40.US new home sales dropped -10.9% in September, in line with expectations and BOC surprised markets with only a 50bp interest rate hike to 3.75%.Macklem had suggested more concern over risks from higher inflation following the rise in the latest CPI data. However, it will continue to tighten, sees terminal rate at 4.5%, there is still “excess demand,” in the economy and that a technical recession is just as likely as modest growth, cutting 2022 growth forecast to 3.3% from 3.5%, 2023 to 0.9% from 1.8%, and 2% in 2024 from 2.4%.
Stocks sank (NASDAQ+2.25%) underperformed. Poor earnings and guidance from big tech (Google plunged -9%), and then Meta (-5.6%) missed and sank -20% after hours, wiping $67 billion off its market cap. Concerns over Apple and Amazon today.Asian markets rose initially but closed/ are closing mixed. (Nikkei –0.32%, Hang Seng 1.60%),European FUTS also mixed. AUD imports prices 3 x higher than expected, but German GfK Consumer Climate not as bad as expected.
EUR – leaped over parity 1.0000,land topped at1.0093 earlier,now ahead of the ECB at 12:15 GMT.
JPY – Cooled again, under 146.00 to 145.40 lows, ahead of the BOJ rate announcement later tomorrow. Friday’s pre-BOJ intervention peak took the pair to 152.00.
GBP – Sterling rallied again (another 150+ pips) yesterday to test 1.1600 and trades to 1.1645 today. UK’s mid-term Fiscal statement was postponed from Monday to Nov. 17 as Gilts continue to recover with tax rises and spending cuts expected.
Stocks – Wall Street were mixed with big moves for Tech stocks in particular. US500 closed -28.5 (-0.74%) at 3830, FUTS trades at 3850 now.
USOil – rallied from $84.35 lows again yesterday to test $88.40 after inventories showed draw downs, back to $87.60 now. IEA Oil Inventories – big build 2.588M vs 1.029M.
Gold – weaker USD helped a rally to $1675, yesterday before moving back to $1662 now.
BTC – rallied again to test $21.0k, back to $20.7k now and holdingthe important $20k.
Today–ECB Announcement & President Lagarde’s PC, US Quarterly PCE Advance, GDP Advance and Durable Goods.EARNINGS – Amazon, Apple, Intel, Caterpillar, McDonalds, Gilead, AB InBev, Credit Suisse, (in-line), Deutsche Lufthansa, and more.
Biggest FX Mover @ (06:30 GMT) GBPJPY (-0.71%) Tank from over 170.00 yesterday to 168.80 now. MAs aligned lower, MACD histogram & signal line negative & falling, RSI 28.05, OS but still falling, H1 ATR 0.299, Daily ATR 2.762.
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
The energy industry has made big profits this year, with oil companies ExxonMobil, Chevron and Shell each generating more than $45 billion in revenue in the second quarter. However, the outlook for the future is not so bright, and the energy sector has lowered their earnings expectations due to the deteriorating macroeconomic outlook. According to FactSet, that downward revision of earnings forecasts for companies in the Energy sector has been a substantial contributor to the decline in the overall earnings growth rate for the S&P 500.
However, the Energy sector is still expected to report the highest revenue growth of the eleven sectors, at 116.4%. Year-on-year higher oil prices contributed to an increase in earnings for the sector, as the average oil price in Q3 2022 was at $91.43, or 30% above the Q3 average price last year which was around $70.52.
There have been calls from Biden for US energy companies to leverage their profits into new production, rather than giving more money to shareholders, due to geo-political considerations. In the past, big oil companies have invested in new production during boom times, but those decisions often boomerang when prices drop. Before the war in Eastern Europe broke out, companies were also under pressure to limit spending on fossil fuels and focus on renewable energy.
Meanwhile, ChevronCorp., which has a market cap of $338,890,689,347, is expected to report earnings on Friday, October 28, 2022 before the market open. The report is for the fiscal quarter ending Sep 2022. Reported second quarter results, which topped consensus on still strong commodity prices and product margins, pushed Chevron’s two segments to a better-than-expected bottom line. Chevron has reported adjusted earnings per share of $5.82, and Revenue of $68.8 billion also reached 23.2% above consensus. The two segments are the upstream division (exploration and production) and the downstream business, namely refining crude oil into fuels such as gasoline and diesel oil.
Chevron is expected to benefit from the realized power of oil and natural gas. As a reflection of this price increase, the Zacks third-quarter average selling price for crude was pegged at $89 per barrel, up significantly from a year earlier, when the company earned $58 in the United States and $68 overseas. Furthermore, the Zacks Consensus Estimate for the third-quarter average selling price for natural gas is pegged at $10.32 per thousand cubic feet compared to $3.25 (US) and $6.28 (international) in the same period in 2021.
The increase in realization from year to year is likely to have supported Chevron’s upstream segment’s revenue and cash flow. In fact, for the quarter to be reported, the Zacks Consensus Forecast for the upstream unit was pegged at a profit of $8 billion, representing a huge jump from the previous year’s quarterly revenue of $5.1 billion.
Chevron is also expected to have reaped the rewards of a better macro-environment in the downstream (or refining) unit. With the post-pandemic demand recovery driving margins higher, the company will see segment revenue soar year over year. Echoing Chevron’s healthy downstream dynamics, the Zacks Consensus Estimate for reported quarterly earnings is projected to be $2.4 billion. The figure represents a remarkable increase from the $1.3 billion profit reported in the last year’s quarter. The price of Chevron is at rank #3 (hold) according to Zacks. It’s safe to say Chevron will benefit from a surge in crude oil and natural gas prices for the reported quarter.
The Zacks Consensus forecast for third-quarter earnings is pegged at $5.10 per share, representing a 72.3% jump on the previous year’s quarterly reported figure of $2.96. For quarterly sales, the consensus value of $59 billion represents a 31.9% increase from the amount reported in the previous year’s quarter.
In addition to Zacks, Jefferies Financial Group analyst L. Byrne anticipates that the oil and gas company will earn $4.94 per share for the third quarter with a “hold” rating on the stock. The consensus estimate for Chevron’s current full-year earnings is $17.84 per share.
Technical Overview
#Chevron continued its 140.46 rebound by breaking through resistance 166.81 on Wednesday last week and trading at around 174.00 on Tuesday, October 25, 2022. During October Chevron has gained over 17% erasing all of its Q3 losses. Technically the Chevron price is still likely to rise to test the top of 182.38 which formed last June, or about 4.5% of the current price. The RSI indicator is approaching the overbought level, while the MACD has not given any indication of weakening momentum.
On the downside, a move below the support at 166.81 would spoil the outlook with support seen at 2 price levels, at 158.93 and 153.97. But overall, the bullish trend still dominates the price movement, as seen from the movement above the 26 MA average, both in the daily and weekly periods. A break above the 182.38 peak would confirm the continuation of the bullish trend for the projected FE 138.2% (187.85) of the drawdown of 132.52–166.81 and 140.46.
https://www.tipranks.com/stocks/cvx/forecast
Citing Tipranks, based on 16 Wall Street analysts who offered 12-month price targets for Chevron in the last 3 months, the average price target is $177.31 with a forecast high of $202.00 and a forecast low of $145.00. The average price target represents a 1.84% change from the last price of $174.10.
Reporting from MarketBeat, several other research analysts have recently also considered Chevron. Truist Financial lowered their price target from $170.00 to $166.00 and assigned a “hold” rating in research notes on Tuesday, July 19. Goldman Sachs Group is rated “neutral” and set a target price of $172.00 in a research report on Thursday, August 4. Wells Fargo & Company raised their target price from $118.00 to $185.00 and gave the company an “overloaded” rating in a research report on Monday, August 1. According to MarketBeat.com, Chevron have a consensus rating of “Medium Buys” and an average target price of $169.25.
Market Analyst – HF Educational Office – Indonesia
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Speculation that mounting recession risks will turn central banks more cautious has continued to linger.
European gas prices nudged higher today, and TTF is trading above EUR 100 per megawatt hour again, after EU energy ministers pushed out the deadline for an agreement on a new crisis tool to cap prices to November 24. The work on a new market benchmark will take even longer and the changes are not expected to kick in before next spring. Still, with unusually warm weather and the progress on EU wide steps to tackle the rise in prices, European gas is still set for a sharp monthly decline.
Oil prices meanwhile have nudged higher as risk appetite improved and the dollar corrected, with the USOIL trading at $86.30 per barrel at the moment. Supply restrictions and concerns over the global growth and thus demand outlook remain the main driving factors.
Elsewhere, China’s official GDP numbers may have been better than expected supporting a bit Oil prices, but they were below official targets, and unemployment nudged higher. There were also customs data showing that demand had remained subdued. China’s Covid strategy has been capping activity in China, which is the world’s largest crude importer, and these data coupled with weak PMI reports have highlighted risks to global growth and demand. The decision by OPEC+ to cut supply will likely continue to put a floor under prices. But, with central bank still on course to deliver sizeable rate hikes, recession fears remain and will likely cap any advance.
EU leaders last week agreed to another raft of measures, designed to tame volatile energy markets. Germany conceded some ground, which means the path is in theory paved for a brief intervention to control gas costs until a new pricing system has been developed. However, the details still need to be hammered out by energy ministers, and there is still some risk that individual countries will veto what they come up with.
European Commission President Charles Michel nevertheless called it “a very good and solid roadmap”, although European Council President Charles Michel admitted that it is a “list of measures that is going to be worked on further”. A separate proposal, which effectively is a scheme to limit the price of gas used by power producers, will also progress to further discussions. Finally EU leaders agreed on a voluntary approach to jointly purchase gas after Hungary vetoed demands for a mandatory approach. We have a classic EU compromise that helped to put a lid on European gas prices, which are now down more than -25% compared to the levels seen a week ago.
Gold prices meanwhile, have moved higher and are heading for a weekly as well as a monthly gain, as the US Dollar corrects. The USDIndex has dropped below 110 as Treasury yields decline and traders reign in rate hike bets. At the same time disappointing reports from the tech sector are weighing on the outlook. Bullion traded at $1674, up 1.3% on the day and around 2.8% on both the week as well as the month. Silver continues to outperform, but both metals are still below levels seen a year ago.
However, concern that China’s “zero Covid” policy will continue to constrain growth, and that US-China tensions will flare up again, will continue to weigh on market sentiment overall.
Prices for agricultural commodities also remain in focus as food price inflation remains a major driver of global inflation pressures. UNCTAD meanwhile highlighted that a renewal of the Black Sea Grain Initiative remains crucial to secure the ongoing supply of world markets and keep a lid on prices, which have actually come down somewhat in recent months.
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
AmazonInc., the titan of consumer products and subscription retailing, which also makes and sells electronic devices, has a market capitalization of $1215.58B. It expects to report the results of the third fiscal quarter of 2022 ending in September on October 27 after the market close. Amazon represents approximately 6.93% of the US100.
Percentage that comprises the Big Tech of the US100 Source: Bloomberg
Amazonranks second in the ranking of the main cloud application providers and with the highest brand value in 2022 according to its revenues worldwide with more than $18,000 million and $350,273 million respectively, according to Statista.
Zacks positions AMAZON Rank #4 (Sell) in the Top 19% position (#49/252) of the Internet and commerce industry. For this report, an EPS of $0.24 is expected (although for Nasdaq it is $0.23) with a -27.66% ESP, which would be a growth of -22.58% y/y compared to the same quarter last year. A profit of $128.05B is expected, which would be a year-over-year growth of 15.56% compared to $110.81B last year. The company has a P/E ratio of 666.59 and a PEG ratio of 29.57.
The estimate has had 1 upward revision and 0 downward revisions in the last 60 days. The company has exceeded expectations 7 times in the last 10 reports, although the last two have been negative.
Last quarter the company posted EPS of $0.10 and earnings of $121.23B.
The Amazon Web Services (AWS) cloudregistered a profit increase of more than 31% in the second quarter and is expected to continue thanks to the growth of the segment that carries an increase of 35% in what goes of the year. AWS generalized the availability of its services AWS Cloud WAN and AWS IoT FleetWise where the latter helps to collect and transfer data from millions of vehicles to the cloud in real time with monetization. It also made available three serverless analytics options for Amazon EMR, Amazon MSK, and Amazon Redshift. These movements are expected to be favorable for the increase in customers and revenues this quarter.
The growth in advertising revenues which have become a growth catalyst for the company, giving an 18% growth in sales in the last quarter, is expected to remain a positive factor with growth of 24%.
The Prime Day that took place earlier this quarter on July 12 and 13 is also expected to be a key driver of earnings, giving an increase of 8.1% for its online commerce and 17% for revenue from services for outside vendors. In addition, the development and strengthening in its grocery service and grocery retailing thanks to the expansion of its Amazon Fresh stores in the US have also provided a good tailwind.
The growth and expansion of Amazon in countries such as India, Australia, the United Kingdom and Canada is expected to strengthen its position in the global market.
Its streaming services like Amazon Prime Video and Amazon Music have seen strong momentum in recent quarters thanks to the expansion in its content portfolio, possibly increasing Prime subscribers and adding to the list of favorable earnings factors as it is expecting a 13% increase, according to Wall Street.
The growth and development of Amazon smart devices with the introduction of the new generation of Echo devices (Echo Dot and Dot Kids, Echo Auto and Echo Studio), Fire TV Cube and the new Alexa Voice Remote Pro along with the growth and introduction of the new Kindle tablets (Kindle, Kindle Kids and Kindle Scribe) coupled with the expansion of its Blink and Blink Mini Pan tilt smart security cameras (some of these devices already sold out) also favor the company.
Sales of services that are higher-margin and recurring have outpaced product sales for the first time this year. This means increased profitability and cash flow for the company and its shareholders.
Negative Factors
The strong inflation that the world is experiencing has been the main burden for the company, as it struggles with high transportation costs due to the increase in fuel and energy prices.
This coupled with interruptions in the supply chain (a mishap that Amazon is trying to solve with Amazon Warehousing & Distribution which allows sellers to solve problems related to it) and a possible continuation of the slowdown of 4% y/y in the last quarter in online shopping, which is Amazon’s main business, will have an impact on the results.
Technical Analysis – Amazon D1 – $120.44
The Amazon price fell to a low of 101.39 after its stock split in June. Following this, the price gave an upward impulse until leaving highs at 146.53. After failing to maintain the psychological level of 140.00, the price formed a bearish channel that gave a discount to the Fibo 88.6% at 106.54 (lows at 105.30), and with these last 2 lows they formed a bullish divergence on the RSI.
Currently the price has recovered the 110.00 level and is above the 20-day SMA testing the psychological level of 120.00 along with the bearish direction of the channel at the time of this writing awaiting the results.
Should the gains prove positive we could see a bullish push to drive the price towards the August highs in the 140.00-146.53 area. Otherwise, and if the result is worse than expected, the price could fall again to the June lows at 101.39 and even to the psychological level of 100.00 that we have not seen since October 2009.
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
USDIndex – Slumped to under 111.00to110.75. Weak Housing, the Richmond Manu. Index and Consumer Confidence, added to the outlook, initiated on Friday that rapid rate rises are beginning to have an impact and thus Fed funds futures continue to pare expectations for the terminal rate. From 5.1% rate as soon as March early last week, implied rates have eased and are showing a 4.88% rate in May, 4.73% in September and hitting 4.50% by December.
Stocks rallied (NASDAQ+2.25%) for a third consecutive day and weighing on yields but US10yr still holds over 4.0%.Riski Sunak, confirmed as new UK PM lifting GBP, Gilts & UK100. MSFT & Alphabet both missed Earnings after hours. Asian markets hit 2.5 year lows again but remain positive. (Nikkei +0.80% Hang Seng 0.86%),European FUTS also higher. AUD CPI hit a 32-yr high at 7.3%.
EUR – leaped over 100 pips from 0.9850,lows yesterday to0.9978now ahead of an expected 75 bp rate hike from the ECB on Thursday.
JPY – Cooled from yesterday’s pivot at 148.85, through 148.00 to 147.85 now, again ahead of the BOJ rate announcement later this week.
GBP – Sterling rallied strongly (over 230 pips) yesterday to test the key 1.1500 psychological level as Sunak became PM and ruthlessly implemented his own cabinet.
Stocks – Wall Street rallied again yesterday (+1.07-2.25%) SNAP a further +15.52% after Fridays drumming,TSLA+5.29% & TWTR +2.45%, (Musk said the deal to be done by Friday). MSFT & GOOGL both -6.75% AMC.US500 closed at 3859, FUTS trades at 3830 now.
USOil – from $83.00 lows again yesterday to test $85.50 after inventories showed draw downs, back to $84.70 now.
Gold – dipped to $1640, yesterday before breaching $1660 to test $1665 resistance.
BTC – rallied from$19.2k support to breach the important $20k to trade at $20.1k now.
Today– EZ M3, US New Home Sales, BoC Announcement.EARNINGS – Meta, Boeing, BASF, Deutsche Bank (beat), Mercedes-Benz (profits significantly higher), Standard Chartered (beat) Barclays, and more.
Biggest FX Mover @ (06:30 GMT) AUDUSD (+0.56%) Rallied from 0.6300 yesterday to 0.6435 ynow following surprise rise in AUD CPI, next resistance 0.6450. MAs aligned higher, MACD histogram & signal line positive & rising, RSI 72.82, OB but still rising, H1 ATR 0.00165, Daily ATR 0.01100.
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
With blue-chip profits surging, 2022 could be a record year for FTSE 100 cash returns. Here are the 10 stocks with the highest dividend yields in the FTSE 100.
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Earnings season has once again kicked off and the world’s biggest company (by market capitalization), the world’s second biggest mobile phone manufacturer and simultaneously the world’s largest technology company (by revenue), Apple (NASDAQ: AAPL), will be releasing its earnings report for the fourth quarter on 27th October 2022 after market close.
Background
The American multinational technology company is based in Cupertino, California and specialises in consumer electronics, software, and online services, and currently has a market capitalization of $2.40 trillion. To understand the scale of Apple, it’s important to understand how the company has evolved and diversified its operations since its inception when the only thing it sold was the Apple Personal Computer.
Since 1976 the company has primarily run its operations around the flagship iPhone and has had steady growth into a plethora of related sectors from this one product. The portfolio now includes the App store, Apple Music, Apple Pay and cloud services. In terms of other devices, Apple now designs, manufactures, and sells the Apple Watch, AirPod, iPad, MacBook as well as the HomePod. Other services that have appeared as offshoots behind these devices include subscription-based services like Apple TV, Apple news, Apple Card, and Apple Arcade. All the above have become significant cash-cows for the company outside of the flagship product.
The expectation from Wall Street and the wider market is an increase on the year-on-year revenue in the fourth quarter to $88.47 billion and earnings per share to $1.26 which represents a 1% increase from last year in the same quarter. AAPL earnings are forecast to rise by 9% in the fiscal year 2022 and an additional 6% in the year 2023. This growth is largely expected to be driven by the release of the popular flagship iPhone 14 model that the company launched in September. Adding to this is a bouquet of new colours recently launched for the newly redesigned iPad, as well as the next generation iPad Pro housing the innovative M2 chip.
Undoubtedly, the market will be keeping an eye on how well the initial uptake and demand has been for the new products because this will be a leading indicator into how the 1st quarter, which coincides with the busy holiday season and peak shopping activity, will drive top-line growth as far as sales are concerned.
While there has been a high level of initial demand for the flagship model iPhone 14 Pro, there have been significant concerns around the demand seen for the models on the lower range such as the iPhone 14 Plus, amid Apple backing off from increasing production to meet anticipated demand which didn’t materialize and resulted in a request being made to one manufacturer in China to cease the production of the components for the above-mentioned model.
With that being said, the market still believes that strong demand emanating from the US will carry the growth curve and drive sales, followed by Europe and China as the subsequent largest consumers. In addition to the real-world demand for the products, the stock market could potentially begin to show signs of reaching the floor and making its way back up to a bullish market, as talks begin to make the rounds that the FED may begin to ease the aggressive pace of Interest rate hikes after the 75 bps rate hike that is expected in November, and this could provide significant impetus for the stock and share price well into Q1 and Q2 2023 for Apple.
Technical Analysis
At the time of writing, price is trading at $149.04 and a large contingent of equities research analysts have a consensus forecast on the stock and an average price target of $185.00. A high estimate of price reaching $220.00 has been made and a corresponding low estimate of $95.00.
In terms of market structure, price action has been locked in a range this year between a high of $182.15 and a low of $130. Current price action has approached the lower end of the range in a corrective nature, printing out a potential reversal pattern in the form of a descending channel. If price yields a significant impulsive wave, the bulls could take control and drive price to test the upper end of the range. Conversely, a break below the current pattern could see sellers testing the lower end of the range.
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Mastercard’s Q3 Earnings Report will be released on October 27, 2022. Given the prior quarter’s results, which surpassed Wall Street projections, the business is poised to establish another record.
Excluding unusual events, Q2 adjusted net sales rose by 27% and adjusted operating income increased by 40% year over year. Operating expenditures climbed by 12%, with acquisitions accounting for a 5% rise. Operating income increased by 40%, despite a one-point decline due to acquisitions [1].
The 27% rise in net revenue was largely driven by domestic and cross-border transaction and volume growth, and also service expansion, which was offset in part by growth in rebates and incentives. EPS increased 40% yearly to $2.56, including a $0.05 contribution from stock buybacks. The company repurchased $2.4 billion in stock during the quarter and an additional $448 million until July 25, 2022 [2].
The company looks for a solid Q3 as it expects net revenue to climb at the high end of the high teens, excluding acquisitions [3].
During the Q2 report call, Sachin Mehra, Chief Financial Officer, said, “From an operating expense standpoint, we expect Q3 operating expenses to grow at the high end of a low double-digit rate versus a year ago on a currency-neutral basis, excluding acquisitions and special items.” The company also mentioned that given the current interest rates, they have an expense run rate of around $115 million each quarter on the other income and cost line. It excludes equity investment gains and losses, which are excluded from our non-GAAP measurements. The company anticipates a 19% to 21% tax rate in Q3. In Q4, we anticipate a tax rate of around 19% [4].
Analyst forecasts for Q3 2022 earnings per share range from 2.37 to 2.68 with a consensus estimate of 2.58, whereas forecasts for Q3 2022 sales range from 5.5B to 5.8B with a consensus estimate of 5.7B. Recently, the company introduced Crypto Source, which will help financial institutions in offering crypto trading [5].
Mastercard will serve as a “bridge” between Paxos, a cryptocurrency trading platform that PayPal presently uses to offer a similar service, and banks.
According to the company, its duty is to keep banks in compliance with regulations by following crypto compliance requirements, authenticating transactions, and providing anti-money-laundering and identity monitoring services.
#Mastercard Stock Analysis
2022 has been rough. After gaining a high of 399.92, it reached a low of 276.87 in the second week of October. The price is currently down almost 30% from highs. The price is below the 200-day MA on the daily chart, and the RSI is near the neutral level.
The next resistance for Mastercard lies around 314.98. If it crosses this level, the stock could reach 339.48, the level it achieved on September 12. On the flip side, the stock’s support lies around 264.19. If the price breaches this level, it could further dip towards 249.67 [6].
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
