Yesterday was a massive day for earnings - 27 S&P 500 companies reported, and the market delivered some of the most dramatic moves we’ve seen all season.
On one side, we saw monster pops in the housing sector, with Homebuilders ripping higher on blockbuster numbers. That’s an encouraging sign for the broader economy - housing stocks are among the most economically sensitive names out there. (If you missed it, check out Alfonso’s note on housing stocks here for more context on why this matters.)
On the other side, Aerospace and Defense stocks stole the spotlight with a historic divergence. One name posted its best earnings reaction this century, while another suffered its worst reaction in 15 quarters.
There were fireworks everywhere.
Let’s break down the biggest winners and losers from yesterday.
Here are the top S&P 500 earnings reactions 👇
*Click the image to enlarge it
DR Horton $DHI had a +7.53 reaction score after reporting a double beat.
They reported revenues of $9.23B, versus the expected $8.75B, and earnings per share of $3.36, versus the expected $2.89.
Iqvia $IQV had a +7.32 reaction score after reporting a double beat.
They reported revenues of $4.02B, versus the expected $3.96B, and earnings per share of $2.81, versus the expected $2.77.
Here are the bottom S&P 500 earnings reactions 👇
*Click the image to enlarge it
Msci $MSCI had a -6.59 reaction score after reporting a double beat.
They reported revenues of $770M, which met the market's expectations, and earnings per share of $4.17, versus the expected $4.15.
Lockheed Martin $LMT had a -6.25 reaction score after reporting a double miss.
They reported revenues of $18.16B, versus the expected $18.57B, and earnings per share of $5.83, versus the expected $6.52.
Now let's dive into the data and talk about what happened with these reports 👇
NOC had its best earnings reaction this century 🔥
Northrop Grumman rallied 9.4% after this earnings report, and here's why:
Key programs, such as the B-21 and Sentinel, received significant funding increases, supporting future growth and production ramp-up.
Net earnings increased 25%–28% year-over-year, and segment operating margin reached 11.8%–13.8% driven by robust demand.
Management also raised full-year guidance for operating income, EPS, and free cash flow.
The stock resolved a textbook multi-year accumulation following this report, confirming the strong fundamentals.
Seeing the price breakout with the best earnings reaction this is as bullish as it gets.
If NOC is above 555, the path of least resistance is likely to remain higher for the foreseeable future.
LMT had its worst earnings reaction in 15 quarters 🩸
Lockheed Martin fell 10.8% after this earnings report, and here's why:
Net earnings dropped to $342 million due to $1.6–$1.8 billion in program losses and higher costs.
The Internal Revenue Service is claiming that the company owes an additional $4.6B in taxes.
Despite a disappointing quarter, management reaffirmed its forward guidance.
The stock is on the cusp of breaking the lower bound of a multi-year channel.
This level aligns with the VWAP anchored to the 2019 low, further enhancing its significance.
If the bulls are going to make a stand, they need to do it now. If they don't, there will likely be much more pain to come.
If LMT is below 411, the path of least resistance will shift from sideways to lower for the foreseeable future.
Thank you for reading.
- The Beat Team
P.S.: Louis nailed the Ethereum trade, but now he's rotating to a different crypto with even more potential firepower.
