by Ian Harvey
January 29, 2018
Successful Recommended Options Trades For Last Week
Earnings Results for the Week Beginning January 22, 2018
|January 16, 2018||BAC MARCH 16 2018 32.000 CALL||P.P: 40%|
|January 16, 2018||FAST FEB 2018 57.500 CALL||P.P: 33%|
|January 19, 2018||SNAP FEB 16 2018 13.000 PUT||P.P: 43%|
|January 19, 2018||SYMC FEB 16 2018 26.000 PUT||P.P: 85%|
|January 22, 2018||STLD FEB 16 2018 48.000 CALL||P.P: 50%|
|January 22, 2018||NFLX FEB 16 2018 230.000 CALL||P.P: 365%|
|January 23, 2018||VZ FEB 16 2018 52.500 CALL||P.P: 182%|
|January 24, 2018||LRCX FEB 16 2018 210.000 CALL||P.P: 89%|
|January 25, 2018||CELG FEB 16 2018 105.000 CALL||P.P: 85%|
|January 26, 2018||ABBV FEB 16 2018 105.000 CALL||P.P: 678%|
NOTE: P.P: – Potential Profit
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Options Trades to Consider Based on Expected Earnings Reports:
Tuesday, January 30
McDonald's Corporation (NYSE:MCD) – will report before the market opens. MCD is expected to present solid comps growth which will drive quarterly results. Also, increased focus on refranchising is likely to boost earnings, but it may have an adverse impact on revenue growth in the quarter.
Analysts expect earnings at $1.59, representing a year-over-year increase of 10.4%. The same for revenues is projected to be $5.3 billion, down 12.8% from the prior-year quarter.
Of the 35 analysts covering MCD, 71% recommend a
"buy." Barclays raised its target price for MCD from $193 to $205
earlier this month; and Cowen & Company had already raised MCD target price
from $185 to $200, in addition to Nomura's target price increase from $180 to
MCD's aggressive re-franchising plan is the reason
consensus estimates are projecting revenue to decline. MCD is currently going
through a transition that will result in just 5% of its locations to be
corporate owned. This will mean that MCD will give up its restaurant revenue
when it re-franchises locations to independent owners, although the company
collects a higher proportion of royalties, franchise fees, and rent charges
which are quite lucrative.
The net result creates a smaller business with larger
The fast-food chain's has made a major turnaround
under CEO Steve Easterbrook. Easterbrook has turned this business around to the
point where it's now doing three times the same-store sales of Starbucks in the
Option trade to consider: Buy the MCD MARCH 16 2018 180.000 CALL at approximately $3.50.
Pfizer Inc. (NYSE:PFE) – will report before the
market opens. Analysts expect PFE to report EPS of 56 cents, up
19%, on flat revenue of $13.69 billion.
shares have moved out of a two-month consolidation range, marking a 21%+ rise
from the low set in August. The catalyst was headlines that European regulators
had approved PFE's diabetes drug Steglatro developed in collaboration with
Merck & Co.
products like Xeljanz (rheumatoid arthritis) and Ibrance (breast cancer) as
well as older products like Lyrica (neuropathic pain), Chantix (smoking
cessation) and Eliquis (blood thinner) are likely to contribute meaningfully to
the top line.
Sutent and Bosulif were approved for line extensions in the fourth quarter
while Ixifi, Pfizer’s second biosimilar version of Johnson & Johnson’s JNJ
blockbuster drug Remicade, was also launched in December.
well there were two new leukemia treatments - Besponsa/inotuzumab ozogamicin
(approved in EU in June 2017 and in the United States in August 2017) for
relapsed/refractory acute lymphoblastic leukemia (ALL) and Mylotarg for newly
diagnosed CD33-positive acute myeloid leukemia (AML) - were approved in
top-of-this, the bottom line is likely to be driven by cost savings and share
these new products and line extensions should bring in some additional sales in
the fourth quarter.
Option trade to consider: Buy the PFE MARCH 16 2018 39.000 CALL at approximately $0.85.
Wednesday, January 31
Boeing Co (NYSE:BA) – The aerospace giant will report before the market opens. The
consensus earnings estimate is $2.91 per share on revenue of $24.74 billion and
the Earnings Whisper number is $2.98 per share. Consensus estimates are for
year-over-year earnings growth of 17.81% with revenue increasing by 6.24%.
The aerospace giant has already reported that
commercial aircraft deliveries rose to 209 in Q4 from 185 a year ago as
production rates ramp up.
Short interest has decreased by 3.5% since the
company's last earnings release.
Overall earnings estimates have been revised higher
since the company's last earnings release.
Last year, Boeing had a
strong start in terms of aircraft order activity. It ended the year on an even
stronger note, more than making up for a lull over the summer. The net result
was a spectacular year, as Boeing brought in 912 net orders in 2017.
Boeing's operational performance was also exceptional in 2017, with free cash flow expected to surge more than 30% compared with the 2016 total of $7.9 billion. The company's strong order activity puts it in good position to continue delivering steady free cash flow growth for the next several years.
Option trade to consider: Buy the BA MARCH 16 2018 360.000 CALL at approximately $8.40.
Thursday, February 01
Apple Inc. (NASDAQ:AAPL) – will report after the market closes.
The company is forecast to report earnings of
$3.81 per share, up from $3.36 during the same period last year. AAPL shares
are down 1.0% year to date.
Some analysts have recently
lowered their sales forecast for iPhones during the quarter, and these lower
estimates have pushed the stock down already for the year. The latest non-financial metrics consensus
estimates show that analysts expect Apple to report total iPhone unit sales of
79.791 million, which would represent a 1.9% gain from the 78.290 million
witnessed in the year-ago quarter.
Expect analysts to seize on weakening sales of
the new iPhone X. And even if Apple presents a perfect report analysts will
find some way to make Apple look bad. Expect a pullback!
Option trade to consider: Buy the AAPL MARCH 16 2018 170.000 PUT at approximately $5.80.
Friday, February 02
Chevron Corporation (NYSE:CVX) – will release their earnings report before the market opens. In 4Q17, analysts expect Chevron to post EPS of $1.33, soaring over 500%. CVX’s revenue is expected to be ~$38.74 billion in 4Q17, 23% higher than its 4Q16 revenue.
In 3Q17, Chevron’s revenue beat Wall Street analysts’ estimate by 6.3%. The company’s EPS (earnings per share) of $1.03, which amounted to $0.85 after adjusting for special items, missed analysts’ estimate of $0.98 by ~13%. However, its 3Q17 adjusted EPS were 73% higher than its 3Q16 adjusted EPS.
Between 4Q16 and 4Q17, crude oil prices rose; this could lead to higher upstream earnings for Chevron. Its downstream earnings are likely to be stronger in 4Q17 due to wider refining cracks—we’ll review this in the next part.
which is positively correlated with WTI, may have been boosted by higher oil
prices and the recently announced corporate tax cut to 21%. This reform
could bring huge benefits for Chevron in the form of higher net earnings and
cash flow. It’s no surprise that Chevron stock is skyrocketing.
Analysts have upgraded Chevron….
Option trade to consider: Buy the CVX MARCH 16 2018 135.000 CALL at approximately $2.00.
An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
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