The earnings season is getting stronger this week as more than 400 companies are expected to report, many of them large companies.
Large caps have outperformed over the past few years as money revolves around companies to withstand all the stresses and pressures of the pandemic.
Some of these companies have perfect 5-year earnings of surprise track records, even losing in the early months of the pandemic. This is wonderful.
But with inflation, supply chain issues, labor shortages and now the Omicron outbreak disrupting the global economy, what will these companies say about the outlook for 2022?
5 Big Cap Revenue All Stars
1. Microsoft (MSFT – Free Report)
Microsoft has a perfect 5-year surprise revenue track record. This is a fantastic streak due to the pandemic over the past 2 years.
Microsoft shares hit new highs in 2021, but by 2022 they have fallen by more than 10%.
The shares are not cheap, with a forward P/E of 32.4.
A 10% pullback in Microsoft is a buying opportunity or is it still going to fall?
2. AT&T Inc. (T – Free Report)
AT&T beat 4 quarters in a row, which was a solid consecutive revenue surprise.
AT&T shares rose 7.1% year-to-date, in line with the bearish trend. But don’t be fooled, the shares hit a 10-year low in 2021 so they’re likely oversold.
AT&T is trading at a forward P/E of only 8.3 and it pays a large dividend.
Is AT&T a hiding place during the volatile 2022 or is it a value trap?
3. Tesla (TSLA – Free Report)
Tesla lost 3 quarters in a row but Tesla investors never really cared if they lost or not.
Shares fell 12% year-to-date on the growth stock sell-off but Tesla shares were still very expensive, with a forward P/E of 109.
However, Tesla investors never cared about appreciation.
Is the vulnerability in shares a buying opportunity?
4. Service Today (NOW – Free Report)
ServiceNow has not been missed for 5 years. This was an incredible performance due to the pandemic stresses.
After rising over the last 5 years, gaining 483% during that period, shares fell 19% in 2022.
ServiceNow is still not cheap on a forward P/E basis. It trades at 71x.
Will another be able to beat the shares of ServiceNow or will it need to be cheaper to finally rally again?
5. Edwards Lifesciences Corp. (EW – Free Report)
Edwards Lifesciences, the innovator of medical heart disease, lost 3 quarters in a row. It’s only missed 3 times in the past 5 years so it has a good long term losing track record.
Like other growth stocks, shares are receding in 2022, falling nearly 15% year-to-date.
Edwards Lifesciences is still not a cheap stock, however, with a forward P/E of 44x.
Is this a buying opportunity at Edwards Lifesciences or should investors wait on the sideline?
[In full disclosure, Tracey owns shares of MSFT in her own personal portfolio.]
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