Friday’s stock market session was mixed.
The Dow Jones Industrial Average (DJI 0.50%) and S&P 500 (GSPC 0.22%) barely registered gains on Friday as the stock market had a mixed day. The Nasdaq Composite (IXIC -0.61%), in contrast, trailed, underscoring the continued apprehension that Wall Street investors have over the outlook for the year 2023.
attention to Dow Components
Many investors pay careful attention to the Dow Jones Industrial Average because it includes some of the most well-known corporations in the world. Two of its constituents, Coca-Cola (KO) and Cisco Systems (CSCO 1.13%), are scheduled to announce their most recent financial results this coming week, thus emphasis will be focused on them.
Soft Drinks Behemoth Coca-Cola
The stock of the beverage firm did well in 2022, but it has had some difficulties so far this year due to a shift in market sentiment away from protective industries like consumer staples and toward higher-growth ones.
With a 10% year-over-year gain in sales and a 7% growth in earnings per share, Coca-Cola has managed to continue growing despite these obstacles. The management of the firm has also provided a strong view for the remainder of the year, predicting organic sales growth of 14% to 15% and the capacity to mitigate the effects of lower foreign currencies.
Despite these encouraging indicators, the stock’s earnings multiples in the mid- to high-20s are higher than the Dow average, particularly in light of the recent increase in interest rates. However, income-seeking investors will find it to be an appealing alternative due to its dividend yield of around 3%.
Cisco Technology Inc.
Investors expect the IT business will only see minor increases in sales and earnings, but this may be enough to reassure those who are wary of the sector.
The IT sector is now seeing moderate growth, as seen by Cisco’s fiscal first quarter results, which showed revenue increasing by 7% year over year to $13.6 billion and earnings increasing by 5% to $0.86 per share due to a significant decline in share count.
Recurring revenue is also provided through the company’s subscription-based software platform, aiding in the stabilization of its financial performance. This could restrict how much it can develop, but it also offers protection when things go tough.
Investors should listen to management’s assessments of the company’s expectations for the remaining months of the 2023 fiscal year as well as any plans for further stock repurchases, which might support future share price increases.