Semiconductor maker Micron Technology has seen its stock decline by almost 22% over the past year, but it has experienced a rollercoaster ride in that time, with three peaks and valleys.[0] The latest valley was not as deep as the first two, and the recovery started two weeks ago is nearing the height of its latest peak.[0] A strong report after markets close on 27 March could push the shares higher.[0] Investors are looking for a ray of hope in Micron’s outlook, indicating a year that exceeds expectations.[0] Micron trades at 52.1 times estimated 2024 EPS of $1.17 and 14.2 times estimated 2025 earnings of $4.31 per share.[0] Micron offers an annual dividend of $0.46, resulting in a yield of 0.75%. Additionally, the stock has fluctuated between $48.43 and $86.24 within the past 52 weeks.[0] The performance for the last 12 months resulted in a negative return of 21.2%.[0] Micron failed to meet the low expectations of Wall Street for its fiscal second quarter due to the challenges posed by a cyclical industry downturn in demand.[1] However, the stock climbed more than 4% in morning trading on comments that the worst might be over for Micron.[1]
Lululemon Athletica, the athleisure clothing retailer, reported better-than-expected earnings late on 26 March and forecast annual sales and profit above expectations on resilient demand and an easing inventory glut. Its shares surged more than 16% before the 27 March open after posting a strong holiday quarter and sharing upbeat guidance for the current fiscal year. The company reported adjusted earnings of $4.40 a share on $2.77bn in revenue and said same-store sales climbed by 27%.[2] Following the news, Citigroup raised the stock to a “buy” rating from a “neutral” rating, accompanied by 13 other analysts who increased their price targets.[3] Should these gains hold, Lululemon will gap into positive territory since the start of the year.[3]
Paychex, the country’s second-largest integrated human resources outsourcer, reports quarterly results on 28 March.[0] Its stock has lost nearly 15% from its share price over the past 12 months, including a decline of 5.8% so far in 2023.[0] Since the August 2018 quarter, Paychex has missed EPS estimates only once and missed sales estimates only twice.[0]
There is almost a 50-50 split among investors regarding the actions that the Federal Reserve may take in the future.[4] A little more than half of futures traders are betting on a pause at the Fed’s meeting in May, while just under half believe another quarter of a percentage point hike is in store.[4] The economy is predicted to slow down due to pressure on the banking system, which is anticipated to cause a reduction in credit, without any intervention from the Fed.[4] However, the central bank is determined to lower inflation back to its target of 2%, but it has not yet achieved this goal.[4] As per Investing.com’s Fed Rate Monitor Tool, there is a strong market sentiment that the Federal Reserve will halt its monetary tightening cycle in May, with an 83% probability of no action.[5] Several rate cuts have been factored in by traders, with the aim of bringing the funds rate to approximately 3.9% by the end of the year.[5]
In extended deals, Lululemon Athletica and Paychex each announced better-than-expected results. Traders are awaiting the latest pending home sales data as well as testimony from the Federal Reserve’s Vice Chair of Supervision, Michael Barr.[6]
0. “Earnings Previews: Lululemon, Micron, Paychex” 24/7 Wall St., 27 Mar. 2023, https://247wallst.com/investing/2023/03/27/earnings-previews-lululemon-micron-paychex/
1. “Dow Jones Rallies 250 Points; Lululemon Soars 14% On Strong Earnings Results” Investor’s Business Daily, 29 Mar. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-rally-lululemon-soars-on-strong-earnings-results/
2. “Stocks making the biggest moves premarket: Lululemon, Paychex, Micron Technology and more” CNBC, 29 Mar. 2023, https://www.cnbc.com/2023/03/29/stocks-making-biggest-moves-premarket-lulu-payx-mu.html
3. “Rates Pull Back, Push Stock Futures Higher” Schaeffers Research, 29 Mar. 2023, https://www.schaeffersresearch.com/content/ezines/2023/03/29/rates-pull-back-push-stock-futures-higher
4. “Micron, Lululemon, Walgreens Boots Alliance: 3 things to watch By Investing.com” Investing.com Canada, 27 Mar. 2023, https://ca.investing.com/news/stock-market-news/micron-lululemon-walgreens-boots-alliance-3-things-to-watch-2945617
5. “1 Stock to Buy, 1 Stock to Sell This Week: Lululemon, Walgreens” Investing.com, 26 Mar. 2023, https://www.investing.com/analysis/1-stock-to-buy-1-stock-to-sell-this-week-lululemon-walgreens-200636616
6. “Dow futures tick higher, Lululemon pops 12.3% after earnings By Investing.com” Investing.com Canada, 28 Mar. 2023, https://ca.investing.com/news/stock-market-news/dow-futures-tick-higher-lululemon-pops-123-after-earnings-2947349