by Ian Harvey
January 05, 2019
Options Trades to Consider Based on Expected Earnings Reports:
Wednesday, January 08, 2020
Walgreens Boots Alliance Inc. (NASDAQ:WBA), a global pharmacy-led, health and wellbeing enterprise, will report earnings before the market opens. The consensus earnings estimate is for $1.40 per share on revenue of $34.63 billion; and the Whisper number is much the same at $1.41 per share.
Consensus estimates are for earnings to decline year-over-year by 4.11% with revenue increasing by 2.48%.
For the last reported quarter, it was expected that Walgreens would post earnings of $1.41 per share when it actually produced earnings of $1.43, delivering a surprise of +1.42%.
Over the last four quarters, the company has beaten consensus EPS estimates three times.
Walgreens Boots is benefiting from the transfer of prescriptions from Rite Aid stores. Increase in comparable pharmacy sales and comparable prescriptions are also expected to have driven growth in the segment during the first quarter of fiscal 2020.
Several developments including the extension of strategic partnership with Kroger, nationwide offering with FedEx, alliance with Centene, a leading Medicaid insurer, and RxAdvance, a cloud-based pharmacy benefit manager, a multi-year Medicare agreement with UnitedHealthcare comprising a new co-branded Medicare Advantage plan with Walgreens Boots being the only preferred Retail Pharmacyhave been boosting growth in this space of late. All these positives are expected to have contributed to the company’s top line.
Short interest has decreased by 30.6% since the company's last earnings release.
WBA stock has gained 20% since touching a six-year low in late August. And there’s a case that the gains should continue.
Option trade to consider: Buy the WBA JAN 17 2020 57.500 PUTS at approximately $0.70.
The beer and spirits specialist, Constellation Brands, Inc. Class A (NYSE: STZ), will report earnings before the market opens. The consensus earnings estimate is $1.90 per share on revenue of $1.95 billion; and the Whisper number is much the same at $1.91 per share.
Consensus estimates are for earnings to decline year-over-year by 19.83% with revenue decreasing by 9.75%.
For the last reported quarter, it was expected that Constellation Brands would post earnings of $2.61 per share when it actually produced earnings of $2.72, delivering a surprise of +4.21%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
STZ stock still trades about 20% below May 2018 highs. Its acquisition strategy over the past few years looks misguided at the moment. Cannabis company Canopy Growth, in which Constellation invested over $4 billion last year, has seen its shares plummet. Constellation paid $1 billion for brewer Ballast Point in 2015, and sold the business for an undisclosed, but likely tiny, amount in December.
Growth is another concern. Beer sales more broadly are being pressured by consumer shifts to other products, including hard seltzer. Constellation is launching new products, including a Corona hard seltzer, but its playing catch-up in that category to the likes of Boston Beer and Anheuser-Busch InBev.
Short interest has decreased by 7.7% since the company's last earnings release.
Option trade to consider: Buy the STZ JAN 17 2020 190.000 CALLS at approximately $2.45.
Bed Bath & Beyond Inc. (NASDAQ:BBBY), a specialty retailer
of domestic merchandise and home furnishings, will report earnings after the
market closes. The consensus earnings estimate is $0.03 per share on revenue of
$2.86 billion; but the Whisper number is a bit higher at $0.04 per share.
Consensus estimates are for earnings to decline year-over-year
by 83.33% with revenue decreasing by 5.68%.
Overall earnings estimates have been revised lower since the
company's last earnings release.
New CEO Mark Tritton, hired away from Target, will have his
first chance to lay out his plans for a turnaround at the struggling retailer.
Tritton already has cleaned house in the executive ranks. News on the dividend,
capital allocation and the store footprint may follow during Wednesday
afternoon’s conference call.
Tritton will have a high bar to clear. BBBY stock already
has more than doubled from August lows, including a nice jump after the hiring
was announced. Even with shares valued at 8 times forward earnings, the market
is pricing in an improvement from the recent trend of steadily declining
However, any plan will not be that convincing in its rescue of Bed Bath & Beyond at this point. But Tritton will have a chance to convince at least some of the skeptics on Wednesday.
Option trade to consider: Buy the BBBY JAN 17
2020 16.000 PUT at approximately $0.95.
Thursday, January 09, 2020
Electrical equipment maker AZZ Inc (NYSE: AZZ) will
report earnings before the market opens. The consensus earnings estimate is
$0.84 per share on revenue of $276.30 million.
Consensus estimates are for year-over-year earnings growth
of 42.37% with revenue increasing by 15.36%.
The stock has a market capitalization of $1.23 billion, a
price-to-earnings ratio of 23.60 and a beta of 1.38. The company has a fifty
day moving average price of $41.67 and a 200-day moving average price of
$42.45. AZZ has a 1-year low of $35.81 and a 1-year high of $50.36. The company
has a current ratio of 2.55, a quick ratio of 2.01 and a debt-to-equity ratio
AZZ last announced its quarterly earnings results on Thursday, December 5th. The industrial products company reported $0.59 EPS for the quarter, beating the consensus estimate of $0.56 by $0.03. AZZ had a net margin of 6.35% and a return on equity of 9.89%. The business had revenue of $236.20 million for the quarter, compared to analyst estimates of $234.90 million. During the same quarter in the prior year, the business earned $0.43 EPS. AZZ’s quarterly revenue was up 6.0% on a year-over-year basis. Equities research analysts forecast that AZZ will post 2.79 EPS for the current fiscal year.
Option trade to consider: Buy the AZZ JAN 17 2020 45.000 CALLS at approximately $1.60.
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.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented.
If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, check out the other memberships available at Stock Options Made Easy.
When To Exit A Trade Based On Earnings?.....
It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?”
traders realize, there is a 50/50 chance that the company stock price could go
either way after reporting earnings – even if the report is good, the stock
price could reverse – and if you hold a call option, means depletion of an
already good profit if it exists. A similar situation can be found if you hold
a put option, and a report is not that sound (and you expect a profit from
this) but the stock price can, at times move upwards due to traders bias or
other external conditions......READ MORE.....
The Decision Is Yours!
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"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
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Director of Stock Options Made Easy