The three major U.S. equity indexes closed lower again Thursday. The Dow Jones industrials ended the day down 0.46%, the S&P 500 closed 1.06% lower and the Nasdaq fell 1.73%. Six of 11 sectors closed lower, with technology (−3.00%) and communications services (−2.83%) posting the biggest losses. Energy (2.04%) was the leading gainer.

Friday morning’s report on nonfarm payrolls for October showed that 261,000 new jobs were added last month, well above the consensus estimate of 220,000 and well below the revised September total of 315,000. The headline unemployment rate rose from 3.5% to 3.7%. All this points to a possible slowing of Fed rate hikes as the economy cools off.

The three major indexes traded up by nearly 2% shortly about 75 minutes after Friday’s opening bell.

After U.S. markets closed Thursday, Block reported better-than-expected earnings per share (EPS) and revenue results. Shares gapped up in Friday’s premarket and traded up nearly 17% in midmorning action Friday.

Carvana missed on both the top and bottom lines. The company did not issue guidance but did say that economic headwinds are likely to continue and that Carvana will have to “rapidly decrease expenses.” Shares traded down about 10.5% early Friday.

Coinbase also missed EPS and revenue estimates, but the company’s outlook for the coming fiscal year included a comment about managing expenses. Shares traded up more than 14% Friday morning.

PayPal beat estimates on both the top and bottom lines but issued revenue guidance below estimates. Shares traded down about 2.8% Friday morning.

Starbucks beat estimates on both the top and bottom lines and reaffirmed full-year guidance. Shares traded up more than 9%.

Before markets opened Friday morning, Cardinal Health reported solid beats on both the top and bottom lines. The outlook for fiscal 2023 (ending in September) was in line with expectations. Shares traded up 5.4%.

DraftKings reported a smaller loss for the quarter than the loss in the prior year quarter, but improved guidance was not good enough. Shares traded down by nearly 23% Friday morning.

We already have previewed Ballard Power, NiSource and Palantir Technologies, all scheduled to report quarterly results first thing Monday morning. Activision Blizzard and Lyft are on deck to report quarterly results later in the day.

Here is a preview of two companies set to report quarterly results before markets open Tuesday morning.

Constellation Energy

Retail power generation company Constellation Energy Corp. (NASDAQ: CEG) has seen its share price increase by more than 125% since completing its spin-off from Exelon about 10 years after Exelon acquired the company for around $7.9 billion. Constellation’s market cap at the time was $17.3 billion; its market cap was almost $31 billion Friday morning. Exelon shares have dipped by nearly 6% since the spin-off, and the regulated utility company’s market cap has dipped from around $42 billion to about $36.9 billion.
Constellation recently filed documents with the U.S. Nuclear Regulatory Commission to extend the life of three nuclear boiling water reactors located in Illinois from 2027 to 2047, from 2029 to 2049 and from 2031 to 2051.

Analysts remain bullish on the stock. Thirteen of 14 firms rated the shares at Buy or Strong Buy. The other has a Hold rating. At a recent price of around $95.40 a share, and the upside potential is 2.2% at the consensus price target of $97.50 and around 58.2% at the high target of $121.00.

For the September quarter, Exelon is expected to report EPS of $0.74, which would be down 53.4% sequentially, on revenue of $3.92 billion. Comparative data is not available. For the full fiscal year, analysts have forecast EPS of $3.06 on revenue of $16.81 billion, down about 14.5% year over year.

Constellation stock trades at 31.2 times expected 2022 EPS, 21.1 times estimated 2023 earnings of $4.54 and 17.1 times estimated 2024 earnings of $5.59 per share. The stock’s post-spin-off range is $38.00 to $96.29. The company pays an annual dividend of $0.56 yield of 0.6%.

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GlobalFoundries

Chipmaker GlobalFoundries Inc. (NASDAQ: GFS) came public in late October last year, and shares soared 70% by late March. By July 5, the stock had dropped 50% from its peak, but the shares have regained 32% since then and currently trade down about 14.6% since the IPO. GlobalFoundries recently received $30 million in federal funding to speed the development of advanced networking semiconductors at its Vermont location.

Analysts are mostly bullish on the stock, with 13 of 17 having Buy or Strong Buy ratings and another two rating the shares at Hold. At a share price of around 5$3.60, the upside potential based on a median price target of $68.00 is 26.9%. At the high price target of $100, the upside potential is 86.6%.

For the company’s third quarter of fiscal 2022, analysts are forecasting revenue of $2.06 billion, up 2.9% sequentially. Adjusted EPS are forecast at $0.62, up 6.1% sequentially and nearly 800% year over year. For the full fiscal year, GlobalFoundries is expected to post adjusted EPS of $2.59, up from a loss of $0.05 in the prior year, on sales of $8.06 billion, up 22.5%.

GlobalFoundries stock trades at 20.7 times expected 2022 EPS, 23.0 times estimated 2023 earnings of $2.34 and 18.5 times estimated 2024 earnings of $2.90 per share. The stock’s 52-week range is $36.81 to $79.49. GlobalFoundries does not pay a dividend. Total return for the past year is negative 14.6%.

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