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

Master Momentum Using Price Swings and Fibonacci Grids

February 8, 2024

What NOT To Do as a Trader

August 30, 2023

The Case for a Tactical Stock Selloff

January 17, 2024

MACD Reverse Divergence

April 20, 2023

Opportunities in Industrials and Materials

September 27, 2024

DP Trading Room: What’s Up With Semiconductors?

May 20, 2024

Hopeful Market Breadth Signs Emerge; Smart Money Flows...

August 27, 2023

DP Trading Room: Why the PMO is Better...

February 26, 2024

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

November 2, 2023

Are The Markets Just Pulling Back, or Is...

June 24, 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

    • Duffy just got an additional job in Trump’s administration, and he’s not the only one wearing multiple hats

      July 11, 2025
    • ‘It will happen quickly’: State Dept poised to act after Supreme Court green-lights agency layoffs

      July 10, 2025
    • Hegseth tears up red tape, orders Pentagon to begin drone surge at Trump’s command

      July 10, 2025
    • SCOOP: Sen Ron Johnson readies subpoenas for FBI, DOJ in Butler shooting probe

      July 10, 2025
    • Jackson defends controversial, fiery SCOTUS dissents as telling people ‘how I feel’

      July 10, 2025
    • How to Find Compelling Charts in Every Sector

      July 10, 2025

    Categories

    • Business (8,444)
    • Investing (2,115)
    • Politics (16,002)
    • Stocks (3,199)
    • 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