Latest news with #Trefis
Forbes
11 hours ago
- Business
- Forbes
Buy or Sell FDX Stock Ahead of Its Upcoming Earnings?
FedEx (NYSE:FDX) is set to release its fiscal Q4 2025 earnings on Tuesday, June 24, 2025. Historically, FedEx's stock has demonstrated varied reactions to earnings announcements over the last five years. After earnings releases, the stock has recorded positive one-day returns in 50% of instances, with a median increase of 6.6%. Conversely, in the remaining 50% of cases, it has faced negative one-day returns, with a median decrease of 4.8%. For event-driven traders, grasping these historical trends can prove advantageous. You can utilize this information in two main ways: Analysts anticipate FedEx will report earnings of $5.86 per share and sales of $21.8 billion for Q4 2025. This is an increase from the same quarter last year, when the earnings were $5.41 per share on sales of $22.1 billion. From a fundamental perspective, FedEx currently holds a market capitalization of $54 billion. In the past twelve months, the company achieved $88 billion in revenue, with operating profits reaching $6.0 billion and a net income of $3.9 billion, reflecting operational profitability. However, if you are looking for potential gains with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and yielded returns exceeding 91% since its establishment. Separately, see – Archer Aviation: What's Happening With ACHR Stock? View the earnings reaction history of all stocks Here are some insights regarding one-day (1D) post-earnings returns: Additional information for the observed 5-Day (5D) and 21-Day (21D) returns after earnings is summarized along with the statistics in the table below. FDX 1D, 5D, and 21D Post Earnings Return Trefis A relatively lower-risk strategy (although not effective if the correlation is minimal) is to comprehend the correlation between short-term and medium-term returns post earnings, identify a pair with the highest correlation, and execute the appropriate trade. For instance, if 1D and 5D indicate the highest correlation, traders can position themselves 'long' for the following 5 days if the 1D post-earnings return is positive. Below is some correlation data based on a 5-year and 3-year (more recent) history. Note that correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns. Discover more about Trefis RV strategy, which has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000), producing robust returns for investors. Additionally, if you desire potential upside with a smoother experience compared to an individual stock like FedEx, contemplate the High Quality portfolio, which has outperformed the S&P and achieved >91% returns since its inception.
Forbes
12 hours ago
- Business
- Forbes
Is SOFI Stock A Buy After Its 15% Rally?
SoFi stock (NASDAQ: SOFI) has seen a significant increase of over 15% in the past month. This surge appears to be partly fueled by the successful IPO of Chime, which seems to have had a positive ripple effect across the broader fintech sector. After a multi-year freeze in public offerings, fintech companies like Chime are finally entering the market, albeit with more modest valuations and tempered expectations. See – Strong Growth, Improving Earnings Make Chime Stock A Buy? However, despite this recent rise, SoFi's stock, currently trading around $15, no longer appears attractive. We have a couple of key concerns that make its current valuation seem excessively high. Our conclusion is based on a comprehensive analysis comparing SoFi's current valuation with its recent operating performance and its historical and current financial health. We've evaluated SoFi Technologies across critical parameters including Growth, Profitability, Financial Stability, and Downturn Resilience. Our findings indicate that the company has only a moderate operating performance and financial condition. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception. On a separate note, see Archer Aviation: What's Happening With ACHR Stock? Going by what you pay per dollar of sales or profit, SOFI stock looks expensive compared to the broader market. SoFi Technologies' Revenues have grown considerably over recent years. SoFi Technologies' profit margins are much worse than most companies in the Trefis coverage universe. SoFi Technologies' balance sheet looks strong. SOFI stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes. In summary, SoFi Technologies' performance across the parameters detailed above is as follows: SoFi's performance across the analyzed parameters has been neutral. Considering its high valuation compared to the benchmark index, we believe the stock is currently unattractive. In fact, SoFi's own average price-to-sales (P/S) ratio over the last three years was 4.5 times, significantly lower than the current 5.9 times. While we acknowledge that the success of Chime's IPO and SoFi's expanding customer base might lead some investors to assign higher valuation multiples, it's crucial to consider the inherent risks. These include elevated interest rates and geopolitical tensions, both of which could impact the broader markets. Furthermore, SoFi has shown relatively less resilience to such adverse economic conditions. For investors seeking to mitigate these risks, our Trefis High Quality (HQ) Portfolio offers a compelling alternative. It applies a robust risk assessment framework to its collection of 30 stocks, which has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Forbes
3 days ago
- Business
- Forbes
50% Downside For Coca-Cola Stock?
Coca Cola cans are pictured in a supermarket in Bayonne, New Jersey, on April 8, 2025. (Photo by ... More CHARLY TRIBALLEAU / AFP) (Photo by CHARLY TRIBALLEAU/AFP via Getty Images) Coca-Cola stock (NYSE:KO) has risen 15% this year, surpassing the S&P 500, which has increased by 2%. This remarkable rally prompts a vital question for investors: Is KO stock currently overpriced, and is it possible that it could face a significant correction, perhaps by 25-30% or even 50% to below $40? Well, here's the concern – at around $70 per share, KO stock seems costly. It is trading at 29 times its earnings from the past twelve months. To illustrate, this results in an earnings yield of merely 3.4%. For context, Google, which leads the search market with an average revenue growth of 10% in recent years, trades at a lower multiple of 19 times earnings. Coca-Cola's average revenue growth of just about 2% over the last three years is insufficient to justify such a high multiple. The price you pay is significant. We have developed the Trefis High-Quality Portfolio with a focus on relative valuation. Notably, HQ has achieved a return of over 91% since its inception, outperforming the S&P, Nasdaq, and Dow — all of them. Separately, take a look at – Should You Buy CRWV Stock After A Whopping 4x Rise? The current valuation of Coca-Cola is influenced by strong organic sales growth, which saw a 6% year-over-year increase in the last quarter. This growth stems from several key factors: increasing sales volumes, effective pricing strategies, and successful revenue growth management. Additionally, the company's initiatives to enhance cold drink equipment deployment and optimize its brand portfolio towards higher-margin products are further propelling its growth. In addition to top-line growth, Coca-Cola has also achieved margin expansion. Its operating margin has notably risen from 28% in 2022 to a respectable 30% in the last twelve months, indicating improved operational efficiency and profitability. While Coca-Cola's organic revenue growth is expected to stay within the mid-single digits, its margin expansion is not anticipated to continue at the same rate. This implies that Coca-Cola's valuation should be more aligned with other companies experiencing 5-10% revenue growth. For example, consider Block Inc., which trades at about 15 times earnings and enjoys a 13% average annual growth rate. Compared to this, Coca-Cola's current valuation appears inflated. If Coca-Cola were valued at Block's multiple of 15 times earnings, its stock price would hover around $40 per share. This raises an essential question for investors: does Coca-Cola's growth profile even justify a lower multiple than that? Despite worries about market saturation, Coca-Cola's performance is closely tied to global economic growth, increasing disposable incomes, and population growth, particularly in emerging markets. A robust economy, supported by stabilizing inflation and renewed consumer confidence, could significantly enhance discretionary spending and out-of-home consumption. This uptick in economic activity directly results in higher demand across all channels. Notably, increased per-capita consumption in developing markets also propels demand for the company's high-margin concentrate business, which is its most profitable segment. Moreover, under volatile market conditions, Coca-Cola frequently acts as a 'safe haven' investment. During periods of uncertainty, such as looming trade tariffs and geopolitical tensions, investors often gravitate towards stable, established companies with predictable earnings. This heightened demand for safety can lead to increased valuations, even for firms with more modest growth expectations. Comparing Coca-Cola with companies like Google and Block is not about finding direct substitutes, but rather about comprehending the relative appeal and risk-reward dynamics of an investment. When evaluating KO, investors ought to contrast its potential returns against alternatives like holding cash (earning interest) or investing in a broad market ETF like the S&P 500. Utilizing 'anchor' assets like Google and Block, which trade at comparatively low multiples, offers a vital perspective on the risk-reward profile of KO. These comparisons assist investors in determining whether the anticipated return on KO stock justifies the associated downside risk, especially since these anchor stocks present more compelling growth stories. This analytical method is essential for making informed investment choices. Regardless of the trade-off, investing in a single stock can be risky. On the flip side, the Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has shown a track record of comfortably outperforming the S&P 500 over the past four years. What accounts for this? Collectively, HQ Portfolio stocks have delivered superior returns with reduced risk in comparison to the standard index, with a more stable performance evident in HQ Portfolio performance metrics.
Forbes
4 days ago
- Business
- Forbes
HSBC Stock: What's New?
HSBC UK, Sheffield (Photo by Mike Egerton/PA Images via Getty Images) HSBC's stock (NYSE: HSBC) has performed quite well this year, increasing by approximately 21% since the beginning of January. In comparison, its competitor JP Morgan (NYSE: JPM) is only up about 10% during the same timeframe. So, what's going on with HSBC stock? HSBC's financials have remained fairly strong. The major banking institution announced earnings for Q1 2025 that exceeded expectations. Although revenues fell 15% from last year, down to $17.65 billion, mainly due to business disposals in Canada and Argentina, profits before tax were $9.48 billion, representing a 25% decrease compared to the previous year; however, these results significantly surpassed forecasts. Profit before tax increased by nearly 317% from the previous quarter, indicating strong sequential growth. Strong performances in the Wealth business, Foreign Exchange, and Debt and Equity Markets have fueled profits and revenue in recent quarters. Incidentally, market leadership is indeed one of the factors we evaluate in constructing the market-beating Trefis High Quality portfolio (HQ) – a strategy encompassing 30 stocks aiming for long-term value creation. HQ has outperformed the S&P 500 and generated returns exceeding 91% since its inception. Separately, see – Should You Buy CRWV Stock After A Whopping 4x Rise? HSBC is increasingly depending on fee-based products in areas like its Wealth and Personal Banking division to fuel growth. Revenue for the Wealth business rose 21% year-over-year during Q1, driven by robust client acquisition and activity in Asia, especially in Hong Kong and India. HSBC has been placing greater emphasis on affluent clients in Asia, with its Hong Kong operations witnessing a 29% sequential increase in new customers. The Global Private Banking segment is also performing well, supported by strong brokerage and trading activity in Asia. HSBC is introducing new wealth products and promotional offers, including cash incentives for new inflows, to attract and retain premium clients. Asset management revenues have been boosted by increasing assets under management, favorable market trends, and heightened life insurance-related earnings. The current fluctuations in the stock markets are anticipated to benefit the wealth business to some degree, as individuals increasingly pursue advisory services, while brokerage and trading sectors are also expected to gain. The banking giant warned that loan demand and credit quality might face challenges in the future due to the wider effects of U.S. President Donald Trump's tariffs on major trading partners. Although the earnings have not yet fully incorporated the entire impact of the recently instated reciprocal tariffs, HSBC is primarily a trade-oriented bank when compared to its peers. In its earnings call held in late April, HSBC indicated that it was experiencing a significant decline in transaction volumes along the U.S.-China corridor for sectors not exempt from tariffs. The bank mentioned that an economic slowdown could result in a low single-digit effect on its revenues for the fiscal year, while facing up to $500 million in additional anticipated credit losses. Nonetheless, developments in U.S.-China trade negotiations in recent weeks have sparked some optimism for reducing tensions. There are a few reasons for optimism regarding HSBC stock. Firstly, its valuation is still considered fair, as the stock is trading at just over 1x tangible book value (net assets minus goodwill). The bank is also concentrating on enhancing efficiency and reducing costs, with a target of annualized savings of $1.5 billion by the end of the next year. In January, HSBC outlined its plans to scale back its mergers and acquisitions as well as some equities businesses in Europe and the Americas, while refocusing on its more profitable markets in Asia, which are seeing quicker economic growth, increasing wealth, and availability of more low-cost deposits. HSBC is also amplifying its commitment to capital returns, having recently increased its share repurchase authorization to $3 billion, with the new buyback anticipated to be completed before its 2025 interim results. This could also help bolster the stock price. Furthermore, the bank aims for a mid-teens return on average tangible equity between 2025 and 2027, which is above the average for the industry. On the flip side, HSBC's core net interest income (NII) might be under pressure due to declining interest rates, creating a challenge for overall revenue growth, as net interest income accounts for around half of the bank's total revenue. For more information, see our analysis concerning HSBC's valuation for a closer look at what's driving our valuation for HSBC stock. While HSBC may offer steady growth, the Trefis HQ portfolio is concentrated on long-term value creation. With a collection of 30 stocks, it has a track record of successfully outperforming the S&P 500 over the past four years. What's the reason? As a group, HQ Portfolio stocks have provided better returns with reduced risk compared to the benchmark; offering a calmer experience akin to HQ Portfolio performance metrics.
Forbes
4 days ago
- Business
- Forbes
What's Happening With Boston Scientific Stock?
CHONGQING, CHINA - APRIL 20: In this photo illustration, the logo of Boston Scientific Corporation ... More is displayed on a smartphone screen, with the company's branding and slogan Advancing science for life in the background, representing the American biomedical and biotechnology engineering firm known for developing medical devices used in interventional medical specialties, on April 20, 2025, in Chongqing, China. (Photo by) Boston Scientific (NYSE:BSX) has experienced a stock price increase of over 30% in the last twelve months, greatly exceeding the S&P 500's gain of 9%. This remarkable performance can be credited to the launch of new products, which have enhanced sales growth and widened profit margins. Nonetheless, the pivotal question for investors is whether the BSX stock, currently priced at around $100, offers a worthwhile buying opportunity. We believe that at its current valuation, Boston Scientific seems relatively overpriced, especially when compared to the broader market and its historical performance metrics. That being said, if you are looking for potential upside with less volatility than individual stocks, the Trefis High-Quality portfolio serves as an option – having outperformed the S&P 500 and yielding returns of over 91% since its inception. Additionally, take a look at – Will Adobe Stock See Higher Levels? When examining Boston Scientific's valuation in relation to the S&P 500, the stock appears quite pricey across essential metrics. The company's price-to-sales (P/S) ratio is at 8.3, notably greater than the S&P 500's 3.0. Likewise, its price-to-free cash flow (P/FCF) ratio of 38.0 significantly surpasses the benchmark's 20.5. Moreover, Boston Scientific's price-to-earnings (P/E) ratio stands at a notable 71.4, as opposed to the S&P 500's 26.4. These numbers collectively suggest that investors are paying a considerable premium for Boston Scientific's sales, profits, and cash flow relative to the overall market. Check out – Boston Scientific's Valuation Ratios – for further insights. Boston Scientific has shown significant revenue growth in recent years. Over the past three years, its revenues have increased at an average rate of 13.1%, dramatically outpacing the S&P 500's rise of 5.5%. More recently, Boston Scientific's revenues increased by 19.4% over the past twelve months, climbing from $15 billion to $18 billion. In its latest quarter, quarterly revenues experienced a solid rise of 20.9%, growing from $3.9 billion to $4.7 billion compared to the previous year. These figures highlight the company's robust operational momentum in driving sales. The company's profit margins typically reside around the average for firms within the Trefis coverage universe. Over the past four quarters, Boston Scientific's operating income totaled $3.2 billion, yielding a solid operating margin of 18.5%, which exceeds the S&P 500's 13.2%. Boston Scientific's Operating Cash Flow (OCF) for the same period was $3.8 billion, reflecting a good OCF margin of 21.7%, compared to the S&P 500's 14.9%. Boston Scientific's Net Income over the last four quarters was $2.0 billion, resulting in a moderate net income margin of 11.6%, which aligns with the average of the S&P 500. Boston Scientific's balance sheet appears to be moderate. As of the latest quarter, the company's debt was $12 billion, in contrast to a significant market capitalization of $147 billion (as of June 13, 2025). This results in a strong Debt-to-Equity Ratio of 8.1%, which is substantially lower and more favorable than the S&P 500's 19.9%. However, a slight concern arises from its cash position; cash and cash equivalents totaling $725 million yield a suboptimal Cash-to-Assets Ratio of 1.8% compared to total assets of $40 billion, and significantly lower than the S&P 500's 13.8%. Boston Scientific's stock has exhibited mixed performance during previous market downturns, sometimes performing worse than the S&P 500. During the "Inflation Shock" of 2022, BSX stock faced a decline of 25.2%, closely mirroring the S&P 500's decrease of 25.4%, but fully recovered by December 2022. The COVID-19 pandemic in 2020 had a more severe impact, causing BSX stock to drop 43.5% in contrast to a 33.9% fall for the S&P 500; however, it regained its value by August 2021. The Global Financial Crisis of 2008 posed the most significant challenge, with BSX stock plunging 70.5% compared to the S&P 500's decline of 56.8%, and it took until November 2015 for the stock to completely recover. In conclusion, Boston Scientific demonstrates 'Extremely Strong' growth, 'Strong' profitability, and a 'Neutral' financial stability profile. Nevertheless, its 'Weak' resilience during downturns and, particularly, its 'Very High' valuation contribute to an 'Overall Neutral' evaluation. The current price-to-sales ratio of 8.3x is significantly higher than Boston Scientific's historical average of 5.9x, indicating that the stock is currently trading at a substantial premium. Although Boston Scientific's improving sales growth and profitability are encouraging factors that may continue attracting investor interest, the high valuation at this time poses an increased risk. For investors looking for upside with reduced volatility relative to individual stocks, portfolios such as the Trefis High Quality (HQ) portfolio and Reinforced Value (RV) Portfolio provide alternatives. The HQ Portfolio, focusing on risk assessment and consisting of 30 stocks, has a proven history of outperforming the S&P 500 over the last four years, yielding superior returns with less risk. Similarly, the RV Portfolio, which is rebalanced quarterly with a mix of large, mid, and small-cap stocks, has outperformed its all-cap stocks benchmark.
