The 2024 Q3 earnings season is just days from kicking into a much higher gear with the release of the big banks’ results on Friday. The period looks to be constructive, with earnings growth expected to be positive again despite recent downward revisions that have contrasted with recent periods.

Let’s take a closer look at a few key reports in stock markets across different sectors.
 

Nvidia's Data Center Results in Focus

Nvidia's (NVDA) success is difficult to capture succinctly, as the company has reported record-breaking quarterly results over the past year, largely fueled by the AI boom, which has led to impressive share performance. While the stock has remained relatively stable over the last three months, showing little movement, expectations for the upcoming release continue to indicate a positive outlook.

The $0.74 Zacks Consensus EPS estimate is up nearly 9% since mid-July, suggesting a sizable 85% increase from the year-ago period. Revenue expectations have also remained bullish, with the $32.6 billion expected also 7% higher over the same period.

Of course, Data Center results will be the real highlight of the release, no different than recent periods. The results have consistently blown away our consensus expectations, exceeding estimates by at least $1.4 billion across its last five releases.

Despite its impressive performance, Nvidia stock remains appealing, with a current forward 12-month earnings multiple of 36.2X, which is favorable compared to the five-year median of 50.7X. The current price-to-earnings growth (PEG) ratio stands at 0.9X, indicating a blend of growth and value.
It's important to note that NVDA is one of the last companies to report during earnings season, with its earnings release scheduled for November 19th.
 

MCD Faces Bearish Expectations

McDonald's (MCD) upcoming quarterly earnings report is expected to shed light on consumer trends, especially as the company has recently experienced a decline in restaurant foot traffic. This slowdown can be attributed to high menu prices, although it’s important to recognize that recent value offerings may help mitigate the impact.

The world's biggest hamburger chain's shares have seen an increase of 4.92% over the last month, not keeping up with the Retail-Wholesale sector's gain of 7.74% and outstripping the S&P 500's gain of 4.3%.

Earnings expectations for the restaurant titan have been taken lower over recent months, with the current $3.15 Zacks Consensus EPS estimate down 4.5% and suggesting a 1.2% pullback from the year-ago period.

Revenue expectations for McDonald's have largely mirrored this trend, with the company projected to achieve $6.7 billion in revenue for the period, representing a 1% increase year-over-year. However, McDonald's sales growth rates have been declining for some time, as illustrated below.

Please note that the chart below reflects the year-over-year changes in sales rather than the actual revenue figures.
 

Tesla Reveals EV Numbers

Tesla TSLA, another member of the Mag 7 group, will also see its quarterly release in focus, giving us further clues surrounding the current state of the EV industry. Shares have delivered a nice performance over the last month, gaining 11%.

Still, expectations for the period have primarily reflected bearishness, with the $0.57 Zacks Consensus EPS estimate down nearly 10% since mid-July. Of course, the key metric for Tesla is the company’s EV production/delivery numbers. The company unveiled its production and delivery numbers recently; Tesla delivered roughly 463k EVs and produced nearly 470k throughout the period.

Analysts were expecting deliveries of 463,310 in the period ended Sept. 30, according to estimates compiled by FactSet StreetAccount.

Based on some other estimates, Tesla shares missed by even more. According to LSEG, analysts on average were expecting deliveries of 469,828 vehicles. An independent researcher widely followed by Tesla fans who publishes as “Troy Teslike” predicted the EV maker would report deliveries of 472,000 in the quarter. Tesla is facing increased competitive pressure, especially in China, from companies like BYD and Geely, along with a new generation of automakers, including Li Auto and Nio.

The company also said on Wednesday that it deployed 6.9 GWh of energy storage products in the quarter.

Shares of Tesla climbed 32% in the third quarter, erasing their loss for the year in the process. The stock is now up almost 4% in 2024, trailing the Nasdaq, which has gained 19%.
 

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.