Amy Poehler and Maya Hawke voice Joy and Anxiety, respectively, in Disney and Pixar’s “Inside Out 2.”
Disney | Pixar
My top 10 things to watch Wednesday, Aug. 7
1. Disney with a blowout, beating analyst estimates on top and bottom lines. Also, a big raise to earnings guidance. It’s about time. Adjusted EPS for its fiscal third quarter were $1.39, up 35% from a year ago. The company’s combined streaming businesses (Disney+, Hulu and ESPN+) turned positive for the first time, ahead of schedule. The entertainment segment was up 4%, much better than expected. And yet, shares were down about 1% in the premarket.
2. Airbnb‘s second-quarter results on Tuesday were a big disappointment and the vacation rental company talked about slowing demand from U.S. guests. It does look like a short-term peak. Shares fell 14%.
3. CVS Health on Wednesday reported better-than-expected earnings. EPS were $1.83 adjusted vs. $1.73. Revenue was $91.23 billion vs. $91.5 billion expected. However, the retail drugstore chain cut its full-year profit outlook because of higher medical costs. The company expects 2024 adjusted earnings of $6.40 to $6.65 per share, down from at least $7 per share. It has cut 600 stores since 2022 and expects to close 300 more this year. I have CEO Karen Lynch on “Mad Money” tonight.
4. Reddit reported second-quarter revenue on Wednesday of $281 million vs. $254 million expected. I like the number, growing user base — 91.2 million daily active users, topping estimates of 84.5 million. Good commentary, a lot to like. Confident presentation. Piper Sandler raised its price target on RDDT shares to $70 from $65. Loop Capital lifted PT to $80 from $75. Reddit stock added 1%.
5. Super Micro is no longer a proxy for Nvidia because of margin issues. Bank of America downgraded the server maker to hold from buy. Really terrible conference call. Major EPS miss but not a sales miss. Super Micro also announced a 10-for-1 stock split. Shares of the stock dropped more than 14%.
6. Instacart amazingly delivered earnings of 20 cents per share, beating estimates of 13 cents. That’s like Uber. The grocery delivery company trades at just 9 times EBITDA. Instacart, which publicly trades as Maplebear, announced in February that it was laying off 250 employees, or roughly 7% of the company, as part of a restructuring to focus on higher-margin projects. Shares jumped more than 9% on the report.
7. Fortinet‘s second quarter was much better than expected. Cybersecurity still very strong. EPS were 57 cents, beating consensus of 41 cents. Billing strong. The company sees full-year adjusted earnings to be between $2.13 and $2.19 per share versus estimates of $1.76 per share.
8. Caterpillar is a battleground stock with price targets getting raised and lowered. I thought it was an excellent quarter. The industrial giant on Tuesday easily topped Wall Street profit estimates in the second quarter, earning $5.99 a share versus $5.54 expected.
9. Wynn Resorts catches multiple price target cuts. Macau is the driver of negative sentiment. We exited our position in Wynn on Monday. Our thinking: If the casino operator can’t deliver robust results in Las Vegas and Boston in the quarters ahead, it will make it even harder to justify owning a stock so levered to China.
10. Toast: The end of the love affair for the SaaS company? Increased average-revenue-per-user pressure, more competition.
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