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GOLDMAN SACHS: Traders are making huge bets that earnings will be disastrous for these 10 stocks

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GOLDMAN SACHS: Traders are making huge bets that earnings will be disastrous for these 10 stocks


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  • This earnings season, investors are meting out more severe punishments than usual for companies that miss profit expectations.
  • Goldman Sachs has identified the 10 companies under its coverage that options traders are most worried about.

It’s show-and-tell season in corporate America, when publicly traded companies get the chance to reveal their financial performance for the most recent quarter.

In this go-around, however, the consequences for disappointing the crowd are high.

Analysts are already braced for bad news. According to FactSet, their cuts to S&P 500 earnings-per-share estimates for the first half of 2019 were the largest in four years.

Investors are following suit and heavily penalizing companies that don’t meet expectations. Shares of firms that miss on profits but beat on revenue have declined 4.3% in the three days post-earnings, according to data compiled by Evercore ISI. That’s nearly four times the 15-year average.

Earnings season is now kicking into high gear, which means there are still plenty of landmines out there. To help investors avoid them, Goldman Sachs examined options-market activity for stocks that traders are worried about.

The list below highlights the 10 stocks options traders are the most fearful of, judging by their desire for downside protection. It’s sorted in ascending order of the implied move for this quarter’s earnings report, less the average realized earnings move over the past eight quarters.

“All stocks below have 1m normalized 25 delta put-call skew in the 75%-ile or higher, indicating a demand for protection ahead of earnings,” Goldman derivatives strategist Katherine Fogertey said in a note to clients.

10. Continental Resources


Markets Insider

Ticker:CLR

Industry group: Energy

Earnings date: February 19

Implied move (+/-%): 8.1

vs 8Q realized move: 4.3

Source: Goldman Sachs


Markets Insider

Ticker:WLL

Industry group: Energy

Earnings date: February 19

Implied move (+/-%): 10.6

vs 8Q realized move: 4.3

Source: Goldman Sachs


Markets Insider

Ticker:PANW

Industry group: Communications

Earnings date: February 25

Implied move (+/-%): 8.7

vs 8Q realized move: 4.6

Source: Goldman Sachs


Markets Insider

Ticker:HOG

Industry group: Consumer

Earnings date: January 29

Implied move (+/-%): 8

vs 8Q realized move: 4.7

Source: Goldman Sachs


Markets Insider

Ticker:QRVO

Industry group: Technology

Earnings date: January 29

Implied move (+/-%): 7.1

vs 8Q realized move: 4.8

Source: Goldman Sachs


Markets Insider

Ticker:HUN

Industry group: Basic materials

Earnings date: February 12

Implied move (+/-%): 7.7

vs 8Q realized move: 5.3

Source: Goldman Sachs


Markets Insider

Ticker:CREE

Industry group: Technology

Earnings date: January 30

Implied move (+/-%): 9.6

vs 8Q realized move: 5.3

Source: Goldman Sachs


Markets Insider

Ticker:DISH

Industry group: Communications

Earnings date: February 19

Implied move (+/-%): 8.7

vs 8Q realized move: 5.6

Source: Goldman Sachs


Markets Insider

Ticker:SYMC

Industry group: Communications

Earnings date: February 31

Implied move (+/-%): 10.2

vs 8Q realized move: 5.7

Source: Goldman Sachs


Markets Insider

Ticker:MNK

Industry group: Consumer

Earnings date: February 26

Implied move (+/-%): 16.2

vs 8Q realized move: 8.3

Source: Goldman Sachs


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Get the latest Goldman Sachs stock price here.

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