3 US stocks to watch as Fed hikes rate: BA, KHC, and BMY

July 27, 2022 12:19 PM PDT | By Rupam Roy
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  • BA stock rose following the aerospace firm's second-quarter earnings release.
  • The Kraft Heinz Company (NASDAQ: KHC) expects its annual organic sales to grow by a high-single-digit percentage.
  • Bristol-Myers Squibb Company (NYSE: BMY) cut its sales guidance for the year due to the strong dollar.

The Boeing Company (NYSE: BA), The Kraft Heinz Company (NASDAQ: KHC), and Bristol-Myers Squibb Company (NYSE: BMY) are one of the top companies in their respective sectors. As the earnings season is taking its pace, the investors are keeping a close watch on the corporate results amid high inflation, rate hikes, and geopolitical turmoil.

The Federal Reserve announced a 0.75 per cent hike on July 27 and some investors anticipate that the Fed's further aggressive stance could push the economy into a recession.

Among the closely followed earnings, these three seem to have caught investors’ attention. Let's take a closer look at their financial performance in the latest quarter.

Three stocks to explore after rate hike and their earnings highlightsSource: ©Kalkine Media®; © Canva Creative Studio via Canva.com

Boeing Company (NYSE: BA)

The BA stock closed at US$ 156.09 after rising 0.11 per cent during the trading session, following its earnings release. Its earnings update said it would stick to its outlook to return to free cash flow this year. In addition, it is preparing to recommence the delivery of 787 Dreamliner planes, following a pause of around two years due to manufacturing issues.

The aerospace manufacturer's operating cash flow was US$ 0.1 billion in the fiscal 2022 second quarter. Its revenue dropped two per cent year-over-year (YoY) to US$ 16.68 billion in Q2 FY22.

Boeing's net earnings were US$ 160 million in the second quarter of fiscal 2022, relatively less than US$ 567 million in Q2 FY21.

The BA stock fell 20.62 per cent year-to-date (YTD) and 28.06 per cent YoY while gaining 16.92 per cent this month.

The Kraft Heinz Company (NASDAQ: KHC)

The KHC stock fell about six per cent on Wednesday, despite the food company raising its annual organic sales guidance.

Several food companies have raised prices due to the global supply chain woes and rising costs. However, some anticipate that higher costs may weigh on consumer demand.

The Illinois-based firm reported net sales of US$ 6.55 billion in Q2 FY22, down from US$ 6.61 billion in the year-ago period. However, its net income in the second quarter was US$ 265 million versus a loss of US$ 27 million in Q2 2021.

KHC stock's RSI is 32.24, suggesting that the stock could be highly volatile. It traded nearly eight per cent up from its 52-week low of US$ 32.78, recorded on December 2, 2021.

Bristol-Myers Squibb Company (NYSE: BMY)

The pharmaceutical firm Bristol-Myers reported its earnings on July 27. It said that the sales of its cancer drug didn't fall as much as anticipated despite strong competition from generic drugs.

The New York-based company reported a two per cent increase in its revenue on a YoY basis, to US$ 11.9 billion in Q2 FY22. Its GAAP earnings per share (EPS) soared at 40 per cent to US$ 0.66 in the second quarter of fiscal 2022.

Its attributable net earnings were US$ 1.4 billion in Q2 FY22, up from US$ 1.1 billion in the year-ago quarter in Q2 FY21.

However, the firm slightly trimmed its annual sales guidance to US$ 46 billion, citing the strong dollar's effect on its sales.

Bottom line:

The earnings from big companies, key economic data, and Fed's comments make it one of the busiest weeks for investors. All the key events are likely to set the stage for the market's future performance. 

Fed’s decision of rate hike again marked their effort to cool down the inflation at their target of two per cent.

Investors should tread cautiously as the volatility in the market persists.


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