US OPEN: Wall Street reacts to upcoming 'Big Cap' earnings

• Wall Street in mixed mood at start of Friday cash session 
• US2000 at important resistance level
• Intel drops 11% on weak Q1 2024 forecasts
• Visa and American Express results

The Wall Street indices started this week's final trading session in mixed mood. In the face of PCE readings from the US that were in line with expectations, investors' attention turned towards the individual companies that presented their quarterly results. Intel is particularly prominent in this regard, losing more than 11% at the time of publication.

Source: xStation5

The US2000 index continues its uptrend and is currently trading near the resistance zone defined by the local peaks of the upper range of the consolidation initiated in August 2022. On an intraday basis, the contracts are currently gaining 0.4%.

News from companies

Shares of Intel (INTC.US) are trading down close to 11% early in the Wall Street session. First-quarter 2024 revenue is forecast to be USD 12.2-13.2bn vs. consensus of USD 14.16bn, and first-quarter EPS is expected to be USD 0.13 vs. consensus of USD 0.32).

Revenue: USD 15.41 billion (estimate USD 15.17 billion) 

Client computing revenue: USD 8.84 billion (estimate USD 8.42 billion) 

Data centre and artificial intelligence revenues: USD 4.0 billion (estimate USD 4.08 billion) 

Q1 forecast:

Adjusted EPS: USD 0.13 (expected USD 0.34) 

Revenue: USD 12.2bn-USD 13.2bn (expected USD 14.25bn) 

Other metrics:

Network revenue: USD 1.47 billion (expected USD 1.55 billion)

Mobileye revenue: USD 637 million (USD 627.2 million expected) 

Intel Foundry revenue: USD 291 million (USD 342.5 million expected) 

Adjusted operating profit: US$2.58 billion (expected US$2.1 billion) 

Adjusted operating margin: 16.7 per cent (13.9 per cent expected)

 Adjusted gross margin: 48.8% (46.5% expected) 

Research and development expenditure: USD 3.99 billion (expected USD 3.9 billion) 

Levi Strauss (LEVI.US) shares are losing close to 1% early in today's session following the release of worse-than-expected quarterly results and disappointing forecasts for 2024. On the other hand, the company has given notice of its intention to lay off close to 10%-15% of its global workforce.

- Adj EPS USD 0.44 (expected USD 0.43)

- Sales USD 1.64 billion (expected USD 1.66 billion)

- Earnings per share for FY24 expected USD 1.15-1.25 (expected USD 1.33)

Visa (V.US) also showed off its quarterly results. The company's shares lost close to 1.5% as management communicated that the company sees slowing volumes in the US and higher operating cost guidance.

- Revenue +9% y-o-y to USD 8.6bn (+USD 50m above expectations).

- Operating margin 69% (+5pp y/y).

- Non-GAAP EPS USD 2.41 (USD 0.07 above expectations).

- Payments volume +8% y/y.

- Cross-border volume +16% y/y.

- Transactions processed +9% y/y.

American Express (AXP.US) results, shares now gaining 7%.

- EPS USD 2.62 (expected USD 2.65)

- Revenue USD 15.80 billion (USD 15.99 billion expected)

- 2024 EPS forecast. USD 12.65-13.15 (USD 12.40 expected)

- American Express raises quarterly dividend to USD 0.70 from USD 0.60 (expected USD0.64)

ANNUAL FORECAST

• Projected EPS USD 12.65 to USD 13.15, expected USD 12.40 
•  Expected revenue +9% to +11%

Analyst actions

• Deutsche Bank raised its recommendation on Snap (SNAP.US) shares to a 'buy' rating and raised its target price on the stock to $19 (previously it was $10). 
• Wells Fargo cut its target price for Intel shares to $48 from $52 amid uncertainty about the company's ability to achieve sustainable gross margins and positive free cash flow.