In this article, we discuss the 5 stocks making headlines on Tuesday. If you want to see some more companies trending today, go directly to These 10 Stocks Are Making Headlines on Tuesday.
5. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 55
Shares of Delta Air Lines, Inc. (NYSE:DAL) are trading higher today, just ahead of the company’s second-quarter results. The Georgia-based airline is scheduled to post its Q2 financial report before the opening bell on Wednesday, July 13, 2022.
Delta Air Lines, Inc. (NYSE:DAL) expects its quarterly revenue to be at par with the pre-pandemic levels despite higher fuel costs. Moreover, it expects operating margins in the range of 13 – 14 percent. On the other hand, analysts expect Delta Air Lines, Inc. (NYSE:DAL) to report earnings of $1.64 per share on revenue of $13.24 billion for the second quarter.
Earlier this year, investment management firm Miller Value Partners praised Delta Air Lines, Inc. (NYSE:DAL) in its fourth-quarter 2021 investor letter. The firm said:
“We’ve healed greatly from the worst days of the pandemic, and we expect that to continue going forward. We see the greatest disconnects between current market expectations and 18-months-out fundamentals in names like Delta Airlines (DAL).
Delta is a quality airline with shareholder-friendly management. It was the only one not to issue equity during the pandemic. It was also the only profitable airline in the second half of 2021. It generated positive operating cash flow despite business and international travel weakness. When earnings finally normalize, which the company doesn’t expect until 2024, it should earn more than $7/share. After bouncing significantly off the lows, DAL currently trades at $41.99 or less than 6x those earnings.”
4. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 62
Shares of PepsiCo, Inc. (NASDAQ:PEP) turned green in the pre-market trading session today after the New York-based snack and beverage giant beat profit and sales expectations for its fiscal second quarter.
PepsiCo, Inc. (NASDAQ:PEP) reported adjusted earnings of $1.86 per share, topping estimates of $1.74 per share. In addition, revenue for the quarter rose 5.2 percent versus last year to $20.23 billion, beating the consensus of $19.51 billion.
Separately, investment management firm ClearBridge Investments talked about PepsiCo, Inc. (NASDAQ:PEP) in its fourth-quarter 2021 investor letter, stating:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”
3. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 67
Shares of Occidental Petroleum Corporation (NYSE:OXY) fell nearly three percent in the pre-market trading session today after Goldman Sachs downgraded the oil and gas company from “Buy” to “Neutral.”
Goldman Sachs analyst Neil Mehta thinks Occidental stock’s valuation is less attractive compared to other energy companies. He pointed towards a sharp surge in Occidental shares on a year-to-date basis.
Nevertheless, Occidental Petroleum Corporation (NYSE:OXY) remains a favorite pick of Warren Buffett’s Berkshire Hathaway. The firm recently acquired 12 million shares of Occidental Petroleum, bringing its total holdings in the company to 175.4 million shares.
Berkshire Hathaway is now the biggest shareholder of Occidental Petroleum Corporation (NYSE:OXY), with an 18.7 percent stake.
2. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 90
Shares of ServiceNow, Inc. (NYSE:NOW) plummeted over 12 percent this morning. The drop came after CEO Bill McDermott mentioned factors like the strong dollar, increasing interest rates, elevated fuel costs and war in Europe and how they could impact the demand for the company’s services.
McDermott believes that customers would likely avoid costly digital transformation and rather spend on areas offering faster returns due to the existing macro headwinds. Referring to McDermott’s comments, Stifel analyst Brad Reback said ServiceNow, Inc. (NYSE:NOW) might lower its outlook when it posts its financial results later this month.
Reback expects software companies, including ServiceNow, Inc. (NYSE:NOW), to lower their expectations in the coming weeks.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Shares of Microsoft Corporation (NASDAQ:MSFT) fell nearly three percent in mid-day trading Tuesday after Morgan Stanley lowered its price target for the software maker giant from $372 per share to $354 per share.
Morgan Stanley analyst Keith Weiss cautioned that macroeconomic factors could impact the growth rate of Microsoft Corporation (NASDAQ:MSFT) in the coming quarters. He also referred to declining IT spending and weakening PC demand. Weiss thinks that softness in certain businesses of Microsoft Corporation (NASDAQ:MSFT) could reduce its fiscal 2023 profit by $1 per share.
Separately, Microsoft Corporation (NASDAQ:MSFT) appeared in the first-quarter 2021 investor letter of investment management firm Carillon Tower Advisers. The letter stated:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Microsoft (NASDAQ:MSFT) reported positive results driven by personal computing strength, but analysts were especially positive on its growth outlook for its Azure cloud-computing services.”
You can also take a peek at 10 Best Tech Stocks to Buy According to Billionaire Ken Griffin and David Abrams’ 2022 Portfolio: Top 10 Stock Picks.
