Earnings Watch: Apple, Tesla, Pfizer, Activision-Blizzard On Tap For Next Week

UBS keyed into expectations for some of next week’s highest profile earnings reports, providing updated insights for their high-conviction trading ideas.

Among the names were Apple Inc. (NASDAQ: AAPL), Pfizer Inc. (NYSE: PFE), Tesla Inc (NASDAQ: TSLA) and Activision Blizzard, Inc. (NASDAQ: ATVI).

Apple — Buy, $170 PT

Apple will report on Aug. 1 after the market closes. Analyst Steven Milunovich continues “to like the stock ... given a large number of [fiscal 2015] buyers ready to upgrade.”

The analyst believes Apple could outperform consensus as it moves into the iPhone 8 cycle, in part driven by higher margins from a more expensive model selling at “decent volume.”

Investors are expecting a to see weakness in the June and September quarters, and will be looking to guidance to gauge when the new iPhones will launch.

Pfizer — Buy, $38 PT

Pfizer reports on Aug. 1 before the market opens. Analyst Marc Goodman “believe[s] that Pfizer will grind higher,” citing top-line growth and bettering sentiment for the pipeline.

Goodman highlighted management’s dedication to pursuing mergers and acquisitions that will drive earnings or the multiple. Tax reform could also be a positive catalyst for the company in the near or medium term.

Investors should watch for sales updates on Ibrance and Prevnar-13, which the Street expects to come in at $756 million and $1.24 billion respectively.

Tesla — Sell, $185 PT

Tesla will report on Aug. 2 after the close. “We believe the market should not ignore fundamental headwinds that persist,” said UBS’ Colin Langan.

Those headwinds will affect the company’s stationary storage business, the profitability of the Model 3 and an “eventual need to raise cash.”

Langan estimates EPS will be negative $1.80, and is skeptical of the two million vehicles sold within 10 years that are currently priced into the stock. Investors should watch for Model 3 inventory levels.

Activision Blizzard — Buy, $67 PT

Activision will report on Aug. 3 after the market closes. Analyst Eric Sheridan expects tough comps for the quarter, but mitigated by sales of “Call of Duty: Black Ops III DLC (Zombies Chronicles).”

Strong pre-orders for “Destiny 2” and high expectations from the gaming community for “CoD WWII” suggest strength ahead for the second half. Combined with increasing eSports and King advertising revenues, investors believe recent trends will rebound.

Investors should watch for updates regarding the "Call of Duty" franchise and eSports-related revenues.

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