Earnings Predictions
for the
Week Beginning January 29, 2018

The Stock Market Continues Climbing Up…Up….Up!
Profit From The Earnings Season!

by Ian Harvey

January 29, 2018

Going Up!

 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

Don’t miss out – check out further options trades recommended for the week ahead by becoming a member of Stock Options Made Easy.

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 $190.

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 profits.

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 U.S.

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.

Pfizer 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.

New 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.

Xeljanz, 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.

As 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 third-quarter 2017.

On top-of-this, the bottom line is likely to be driven by cost savings and share buybacks.

All 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.

Chevron stock, 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….

  • BMO has upgraded Chevron from “market perform” to “outperform,” and raised CVX’s target price from $120 per share to $140 per share.
  • Morgan Stanley raised its target price for Chevron stock from $130 per share to $145 per share, and
  • Jefferies, which has a “buy” rating on the stock, increased its target price to $152 per share.
  • As well, Deutsche Bank raised CVX’s target price from $131 per share to $145 per share.

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.

If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, get on board with the members of Stock Options Made Easy.

Our proven track record says it all!!

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.

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