Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Do Earnings Warnings Really Matter?

by September 18, 2022
September 18, 2022
Do Earnings Warnings Really Matter?

Of course they do. One of the key metrics in any business valuation is earnings/earnings growth. When a company cuts its forecast, Wall Street must decide whether it’s a “one off” type of earnings miss or if it’s more indicative of a longer-term trend. The latter is clearly worse, but any negative earnings forecast or change is going to increase the number of skeptics. FedEx Corp (FDX) lost more than 21% of its value on Friday after cutting both its revenue and earnings forecast. Was it justified? Perhaps, but maybe a bigger question is whether United Parcel Service (UPS) deserved to be whacked 4.5% for the business sins of FDX. This is many times where opportunities lie. UPS has been outperforming FDX for the past couple years – obviously, for good reason. Market participants are much more comfortable with the business plan and strategy of UPS. Below is a chart of UPS and, in the bottom panel, you’ll see a “paired” chart, where UPS has been the BIG winner vs. FDX for quite awhile. Check this out:

With the exception of March through June of this year, UPS has been crushing FDX on a relative basis. So when FDX announces a cut to its revenue/earnings forecast, should we automatically assume UPS has similar business troubles, because they’re in the same industry? I don’t think so. UPS has been trading in a price range from 170-230 for more than a year and Friday’s sympathy drop takes UPS closer to this range support. 170 would seem to be a very solid reward-to-risk entry point, if you want exposure to this area of the market – especially after FDX lowered prices for everyone.

Using “pairs” like I did in the above example is a great technical way to compare stocks within the same industry. It’s a very quick visual that provides us the Wall Street consensus as to how the big firms view two companies. On Monday, I plan to do a similar comparison, examining two very well-known companies in one of the best-performing industry groups of 2022. You might be surprised by the winner in this pairing. If you’re not already a FREE EarningsBeats.com Digest newsletter subscriber (no credit card required), CLICK HERE to enter your name and email address and receive this comparison.

Happy trading!

Tom

0
FacebookTwitterGoogle +Pinterest
previous post
President Trump Calls for Death Penalty for Drug Dealers and Human Traffickers During Ohio Rally (VIDEO)
next post
Democrat Candidate for GA Governor, Abrams, Supports Abortion “Up Until the Time of Birth”

You may also like

Stock Market Still Has Legs, Bitcoin Sees a...

November 10, 2023

Did Friday’s Reversal Mark A Major Bottom?

March 8, 2025

DP Trading Room: Black Swan Monday

January 27, 2025

Be Careful With These Topping Candles

February 2, 2025

Holiday Shopping Bonanza: Retail Stocks You Need to...

November 2, 2023

The AUTOMATED Way to Find Strong Stocks Making...

June 3, 2023

Post Tech Earnings & FOMC — Give Retail...

February 1, 2024

Decoding 10-Year Treasury Yields: A Monthly/Secular Perspective Overview

February 21, 2024

This Is Why You Shouldn’t Have Bought Disney...

February 12, 2023

Monthly Chart Points to Much Higher Oil Prices...

October 11, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved