Investing

5 Dow Stocks Getting Slammed in 2016 Have Not Even Reported Earnings Yet

Walt Disney

An incredible performer ahead of Star Wars, Walt Disney Co. (NYSE: DIS) has seen a definite “sell the news” reaction, even if it is buying back its own stock. In fact, Disney shares are down 8.8% so far in 2016. That might not feel right, and blaming Star Wars is just because the stock rose so much ahead of the movie. Keep in mind that Star Wars will lead to billions of dollars for Disney for years and years — the company can make these endlessly, and the only franchise risk might be if actual aliens land on earth and science fiction becomes reality TV.

Frozen, Marvel, theme parks and merchandise all are ongoing winners; the real drag is that the cord-cutters aren’t going to be taking enough ESPN content.

At $95.82, Disney is now down 21.5% from its 52-week high of $122.08. Its consensus price target is $112.38. Disney’s bullish and bearish case at the start of 2016 saw a gain of almost 14% this year.

Pfizer

Look for Pfizer Inc. (NYSE: PFE) to report earnings on Tuesday, February 2, 2016. Unfortunately, the Big Pharma giants are still marred by patent cliffs, and Pfizer is involved in a tax inversion merger. That being said, its shares are down 5.55% so far in 2016.

Unfortunately for Pfizer and defensive stock investors, it is an election year and the next phase of government health care domination is pointed toward the drug companies over their pricing power. Pfizer shares are also down about 13.3% from this time a year ago.

Pfizer closed out January at $30.49, and it has a consensus analyst target of $40.19. It also has a 3.9% yield. Pfizer’s 2016 bullish and bearish outlook somehow called for a 29% total return this year.


Home Depot

“Why us?” is probably what Home Depot Inc. (NYSE: HD) is wondering in 2016. People are still spending on homes and there is a vast housing supply shortage for buyers, so any improvements should go far. We don’t even show Home Depot earnings until February 23. And isn’t Home Depot supposed to be one of the winners from all the gas savings?

Its drop so far in 2016 has been 4.9%. Before investors get too upset here, they might want to consider that Home Depot is still up a sharp 19.2% from this time a year ago.

Closing out January at $125.76, Home Depot has a consensus price target of $141.57 and a 52-week range of $135.47. Maybe the market doesn’t like Home Depot being valued at just over 20 times next year’s earnings estimate. Home Depot’s bullish and bearish case at the start of the year called for an 8.4% total return in 2016.

Merck

With a political climate against drug company pricing power and the ongoing patent cliff, Merck & Co. Inc. (NYSE: MRK) suffers some of the same woes of Pfizer. Still, its shares were down 4.1% so far in 2016, and it would have been even worse had it not been for a 3% rally on Friday after positive news of FDA approval for its hepatitis C treatment Zepatier.

Merck shares are also down almost 16% from this time a year ago, even considering its 3.6% dividend yield.

At $50.67 at the end of January, Merck has a consensus price target of $60.53. Its earnings date is coming very soon, February 3. Merck’s 2016 bullish and bearish outlook saw a total return north of 21% this year.

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