The Q2 earnings report gives investors meaningful data to evaluate a company’s prospects. Three firms that posted results offer readers a potentially profitable post-earnings trade.
Coke (KO) posted organic sales growing by 15%, surpassing analyst expectations of around 9.5%. Strength spread geographically: Latin America (+28%), the emerging markets (+30%), and North America (+10%). This growth diversification justifies investing in the stock at almost any price. KO stock is a stable and consistent holding.
Parcel Delivery firm UPS (UPS) slumped by 12.05% yesterday. Markets did not like the -1.4% Y/Y revenue change ($21.8 billion). For 2024, UPS will buy back around $500 million in shares. UPS’s recently signed contract increases its costs. It adds downward pressure on profits. Management will have an increasingly tougher chance to meet expectations as the economy worsens.
UPS stock trades at attractive valuations and profitability, offset by weak growth and a stock in a downtrend.
$120 is a good entry price for UPS shares.
In the aerospace sector, Lockheed Martin (LMT) will open at a 52-week high. The firm reported strong cash activities in Q2. This included paying $752 million in cash dividends, spending $850 million to buy back 1.9 million shares, and meeting its debt payment schedule of $168 million.
