Walmart, NVIDIA, Lucid, Tyson: Who’s Ahead & Who’s Behind?

The week ahead is set to be chock-full of earnings releases. Heading into this busy earnings season, investors may be about to get a better picture of how companies like Walmart (WMT), NVIDIA (NVDA), Lucid Group (LCID), and Tyson Foods (TSN) have responded to the continuing challenges posed by inflation and supply chain issues.

Is Walmart the Canary in the Coal Mine?

Big box behemoth Walmart is set to release its quarterly earnings report on Tuesday the 16th before the market opens. Consumer spending has been a continual concern over the past few months as the economic effects of the pandemic drag on; will this have affected the retail giant’s bottom line? 

The U.S. Commerce Department’s latest numbers show that American consumer spending is expected to have risen by 1.1% in October, beating the previous month’s rise of 0.7%, despite the continuing struggle to halt the spread of the coronavirus’ Delta variant. 

However, the rise in consumption appears lackluster in comparison to that seen earlier this year, when the American public received a government-funded boost to their wallets. The U.S. Bureau of Labor Statistics’ most recent report showed that consumption rose by 1.6% over Q3 2021, compared to Q2’s 12%.

Some economists have speculated that we could already be seeing the effects of rising inflation on the U.S. consumer’s purchase decisions. Surveys conducted by the University of Michigan recently showed that consumer sentiment has fallen to its lowest level in a decade; when coupled with recent Consumer Price Index figures showing that inflation has hit 6.2%, this could have a serious impact on American businesses.

How could all of this affect Walmart’s earning release on Tuesday? The retail giant’s quarterly figures could provide an early indication of how much the aforementioned inflation and consumption numbers, along with continuing global supply chain issues, will affect the market’s largest publicly-traded companies.

According to Bloomberg, it’s expected that Walmart’s year-over-year sales growth will be about 1.1%, the firm’s lowest figure since before the pandemic. However, same-store sales are expected to have hit 7%, perhaps bolstered by the back-to-school shopping season across the United States. Store managers across the country have also reported issues surrounding keeping in-demand items in stock, another result of supply-chain complications.

The Zacks Investment Research consensus estimate for Walmart’s Earnings Per Share rests at $1.39, down from last quarter’s reported EPS of $1.78. This decline may not bode well for other players in the retail sector.

Has NVIDIA Been Boosted by the Pandemic?

NVIDIA Corporation is expected to release earnings on Wednesday, November 17th, after market close. Many market watchers are speculating that the graphic chip industry leader will post strong numbers, as the increase in those working from home has bolstered demand for NVIDIA’s chips.

NVIDIA has consistently led the pack in the development of graphic chips for all kinds of computers, and this has paid off for the firm over the course of the pandemic, as consumers both work and play video games at home. The Zacks Consensus Estimate for NVIDIA’s Q3 revenue is $6.8 billion, a more than 40% jump from last year’s figure. EPS is estimated to come in at $1.11, a more than 50% increase from the corresponding quarter of 2020. However, the company has beat estimates over the past four quarters, so stockholders could be in for another pleasant surprise on Tuesday.

How Will Tyson Measure Up?

Another American company that may have grown over this latest stage of the pandemic is Tyson Foods, Inc. Over the past year and a half, Tyson’s seen continuous growth, fueled by its strong export and retail branches. The company’s growth has even led it to invest in a $300 million production facility for its ready-made products in Virginia. As Tyson continues to see retail expansion, market watchers expect this upward trend to continue, despite cost increases caused by inflation.

The Consensus Estimate for the figures to be unveiled before trading begins today, November 15th, are that Tyson’s quarterly revenue will reach over $12.5 billion, a year-over-year increase of nearly 10%, and that EPS will rest around $2.20, a 21.6% increase over last year’s number for this quarter.

Will Lucid Challenge Tesla?

Lucid Motors is also expected to release its quarterly earnings report today. The firm’s CEO, Peter Rawlinson, formerly VP of Engineering at Tesla, and Lucid has been seen by many as a potential competitor for Tesla since it made the transition from battery manufacturing to EV design in 2016. The company’s stock debuted last July following a reverse merger.

Lucid’s newest luxury sedan, the Air Dream, began deliveries in October. This new model, built with Lucid’s proprietary technology, beats Tesla’s vehicle line in driving range with over 500 miles per charge.

However, given that deliveries of the Lucid Air Dream began just over two weeks ago, the sales figures won’t show up in today’s earnings report, the company’s first since going public. Due to the fact that Lucid has only just begun its vehicle deliveries, many market experts are not expecting big Q3 numbers. The Zacks Consensus Estimate foresees a loss per share of 22 cents. Today’s earnings release may be underwhelming, but investors might wish to reserve their judgments until the Air Dream begins to affect Lucid’s revenue in next quarter’s numbers.

Are There Waves Ahead?

In conclusion, the week ahead will be full of earnings releases from a variety of sectors, each of which has been distinctly impacted by the wider economic environment of the COVID-19 pandemic. Traders, investors, and other market watchers could be in for some large surprises in the coming days.