Earnings season may be slowing down, but there are still big names set to report this week, especially in tech and retail.
Cisco, up 22% so far this year, reports on Wednesday after the bell. "This is one you want to be buying if there's any weakness," advised Stephanie Link of Nuveen on Monday's "Halftime Report." Link says Cisco has a "dynamo management team," which led Cisco to a surprising beat on earnings and raise in guidance last quarter by moving production to Mexico from China "in record time."
"The quarter should be fine," predicts Cerity Partners' Jim Lebenthal, who calls Cisco one of his favorite stocks. He also agrees with Link that Cisco is cheap trading at a 15x multiple. Lebenthal's only concern is "what they say going forward... Companies are kind of walking back their plans, delaying spending. That's what worries me." Analysts are estimating EPS of $0.82 and revenue of $13.39 billion for the quarter, according to FactSet.
Chipmaker Nvidia reports on Thursday after the bell. Joe Terranova of Virtus Investment Partners is not expecting great things of the stock, now 47% off its 52 week high. "The stock has just been awful," he said on Friday's "Halftime Report." "It cannot sustain any type of recovery… The air just came out of the balloon so quickly, and I'm not sure what reverses it."
Josh Brown, CEO of Ritholtz Wealth Management, is a little more positive on Nvidia for the long term. "If you're a shareholder like I am, you just have to live through these periods of time," he advises, because there is a "global semiconductor problem" out of Nvidia's control. "Within the semis, they address some of the growthiest growth markets. They're not in the wrong markets, that's the good news. The bad news is, they cannot be immune to the weakness that we see that's either trade-related or economic slowdown–related." Analysts are expecting $1.15 in EPS and $2.55 billion in revenue, both declines from last year.
Retail has also been hit hard since President Donald Trump announced tariffs on the remaining $300 billion worth of Chinese imports. Macy's, which reports on Wednesday before the bell, is just one of several names hitting multi-year lows today.
Don't buy this dip, advises Link, who wouldn't touch Macy's "with a ten-foot pole." She concedes the department stores "are doing really good things to try and stem the losses, but you don't want to be near them."
Walmart, reporting on Thursday, might be one of the few bright spots in the sector, still up 13% this year. Jim Cramer recently included it on his "WATCH" list of consumer plays, alongside Amazon, Target, Costco and Home Depot. But Terranova, who owns the stock, warned on Friday, "I'm troubled by Walmart. The expectations are incredibly high. They're going to need a really strong quarter. I'm going to be interested to hear CEO comments as well." Analysts are estimating an EPS of $1.22 and revenues of $130.1 billion, according to FactSet.
Nevertheless, Terranova and Link plan on holding Walmart for the long term. Terranova believes it's "big enough" to deal with tariffs and other trade tensions, by putting pressure on suppliers rather than passing all the pain to consumers. Link believes domestic data from "the jobs market, wages, [and] unemployment has to be good for the Walmart consumer."
But in general, Lebenthal is "very wary of any of those names" in retail . "I've just never seen something this badly hurt across the entire sector," he said. "Frankly, you look at these earnings reports, what are they going to say about the upcoming quarter and the upcoming holiday season with all the tariffs that are planned to go into effect? It's really a bad setup here."
Disclosure: Josh Brown owns shares of Nvidia. Jim Lebenthal owns shares of Cisco. Stephanie Link owns shares of Cisco and Walmart. Joe Terranova owns shares of Walmart.