Market Preview: Waiting for the Break
The sell side is mostly bullish with 23 of the 35 analysts covering the shares at either strong buy (12) or buy (11), and the 12-month median price target sits at $34.50, implying X% upside potential from here. Think Equity is one of the bears with a hold rating and a $31 price target ahead of the report, and it sees some cause for trepidation as the company moves outside its traditional strength in personal computers into smartphones and tablets.
"While we are optimistic regarding the unit growth prospects of the upcoming Windows 8 release support ARM (ARM Holdings(ARMH) ) architecture, we are wary of the pricing pressure it could face given the lower pricing points of non-PC devices," the firm writes. "We do not believe the current positive investor sentiment regarding the Windows 8 release has fully accounted for a potential negative pricing headwind. We believe shares are fairly valued at 10X our CY12
Check out TheStreet's quote page for Microsoft for year-to-date share performance, analyst ratings, earnings estimates and much more.
Bank of America will be the most closely watched report ahead of the opening bell. It's been a mixed bag for the big banks after reporting their quarterly results as JPMorgan Chase(JPM) and Wells Fargo(WFC) stalled following their reports, but Citigroup(C) caught a bid.
Wall Street is looking for earnings of 12 cents a share on revenue of $22.51 billion from Bank of America, which could be judged harshly on any misstep because of how mightily the stock has rallied this year, rising 60% as the biggest percentage gainer in the Dow in 2012.
Chipotle shares have continued to fly high in 2012, tacking on 28% since the calendar turned and reaching a new 52-week peak of $442.40 on April 13. The stock is expensive with a forward P/E ratio of 40.2X vs. 19.3X for Yum! Brands(YUM) .
The average estimate of analysts polled by Thomson Reuters is calling for Chipotle to earn $1.93 a share in the first quarter on revenue of $631.1 million, up from a year-ago equivalent profit of $1.44 a share on revenue of $509.4 million, and earnings of $1.90 a share on revenue of $591.9 million in the fourth quarter.