Chipotle
Chipotle (CMG) shares are trading more than 10% higher after the close following the company’s better-than-expected earnings results.
The fast-casual dining company provided earnings results that were $0.02 better than expectations after the company surprised investors with a year-over-year increase in revenue of nearly 10%.
Investors had been braced for numbers that may not have impressed after the company raised menu prices to account for increased costs for ingredients like avocados. The company reported an increase in same store traffic of more than 8% as diners continue to choose eating out over dining at home options.
Shares of Chipotle recently ran into an increase of selling pressure after reports that the company had been cutting back on the volume of ingredients on their menu items went viral. The company’s CEO denied those reports. In addition, independent testing in New York City locations found that while there were inconsistencies, average product weight had not declined.
Shares are trading at their 200-day moving average after losing 25% from their 2024 highs.
The stock’s 50-day moving average turned bearish on July 12, as the stock was heading towards a test of its longer-moving 200-day moving average. The stock should see overhead resistance at $57.50.
A break above that $57.50 level should provide a technical catalyst for Chipotle shares to rally back to $70 after the company has reaffirmed its strength in the dining space.
IBM
IBM stock is moving higher in post-session trading.
Just after the close, IBM (IBM) announced their earnings results for the recent quarter. The company blew investor’s expectations out of the water, beating earnings per share targets by $0.25.
That earning beat is the result of strong revenue growth of 19% compared to the same quarter last year. The 19% revenue growth is the strongest posted by IBM in more than 5 years.
Management guided their free cash flow guidance higher looking forward as IBM’s said it’s seeing more business tied to generative artificial intelligence. In addition, company’s generative AI business is above $2 billion. That number was closer to $1 billion in April.
IBM shares have been on a recovery rally since falling 11% after last quarter’s earnings report showed slowing revenue. Shares had just fully recovered from those losses last week when the price of IBM crossed back above $180.
The stock is trading 3% higher after the positive earnings results at more than $190 per share.
All of the stock’s key technical trendlines show a strong bullish outlook with a price target of $225.
Ford
Shares of Ford (F) are tanking more than 10% after the close following disappointing earnings results.
The automobile manufacturer posted earnings per share of $0.47 against expectations of $0.68 with revenue of $44.81 billion, better than the Street’s expectations of $44.02 billion.
Margins were the issue for Ford this quarter as warranty costs as the company is increasing the reserves set aside to handle an increase in warranty claims. The company also posted losses of more than $1 billion on their “Model e” electric vehicle unit.
Ford shares have been losing strength in the market and against their industry – GM shares traded higher this week on strong earnings – as the company has struggled with their EV adoption. In addition, investors and analysts have been pressuring the stock as they expect consumers to slow purchases in the second half of 2024.
Ford stock is trading back towards $12 after dipping below $10 earlier this year.
Today’s precipitous drop is likely to pressure the stock’s 50-day moving average. That trendline is in a bullish trend, signaling that investors may step in to buy the stock on a dip.
That said, a break below $12.50 is likely to target a continued descent to $11.75 before the next round of strong buying enters the market for Ford.
