Apple, GM Are Buys Into Earnings Tuesday: Investing Action Plan

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Here's your Investing Action Plan: what you need to know as an investor for the coming day.

Apple (AAPL) is expected to report a third straight quarter of year-over-year earnings and revenue declines on Tuesday. General Motors (GM) and Fiat Chrysler Automobile (FCAU), Lockheed Martin (LMT), Merck (MRK) and Edwards Lifesciences (EW) also are on tap, along with other medical, industrial and restaurant stocks.

Apple

Estimates: Fiscal Q4 EPS down 16% to $1.65; revenue down 9% to $46.9 billion.

Prior Quarter: Q3 EPS fell 23% to $1.42 as revenue sank 15% to $42.36 billion.

Stock: Apple shares rose 0.9% to 117.63 on the stock market Monday. Shares have rallied in recent months in anticipation that the worst was over and that the Apple iPhone 7, launched Sept. 16, will do better than expected. The stock cleared a 110.33 buy point on Sept. 14 and continued to move higher. Apple also topped an alternate buy point of 116.28 and is still in buy range.

Why It Matters: Apple has the world's highest market capitalization, so any earnings report is important. Apple's results and outlook will offer clues about the iPhone 7 demand heading into the holidays. That could move a slew of chipmakers and other suppliers.

On Thursday, Apple will unveil show off its latest Mac notebook and desktop computers.

IBD'S TAKE: Buying stocks in the current choppy market environment is risky, but especially so during earnings season. IBD's Swing Trader now offers options on earnings.

Lockheed Martin

Estimates: Q3 EPS up 3.6% to $2.87; revenue virtually flat at $11.45 billion.

Prior Quarter: Q2 EPS up 13% to $3.32 as revenue climbed 11% to $12.91 billion.

Stock: Lockheed Martin rose 0.7% to 232.17. Since peaking at 266.93 on Aug. 15, shares have fallen back, undercutting the 50-day moving average, the 200-day line and a buy point.

Why It Matters: Lockheed is the first major defense contractor to report Q3 results. Also, Lockheed could give updates on the F-35 as well as its ongoing efforts to win a major fighter jet contract with India.

General Motors

Estimates: EPS down 4% to $1.44; sales up 1% top

Prior Quarter: Q2 EPS rose 44% to $1.86 as sales climbed $42.37 billion.

Stock: General Motors shares rose 2.9% to 32.98, just above a buy point of 32.88. GM has not closed above 33 since the first trading day of the year. The stock has been moving sideways for months, finding support in recent weeks near the 50-day line.

Why It Matters: GM is still No. 1 in U.S. auto sales. Its results, outlook and comments will offer more clarity on how much and how fast domestic demand will fall. GM also will provide information about global operations and may offer updates on self-driving-related efforts.

Fiat Chrysler Automobile (FCAU) also reports earnings on Tuesday. Ford Motor (F) will report earnings on Thursday.

Edwards Lifesciences

Estimates: EPS up 26% to 68 cents. Revenue should rise 12% to $749.14 million.

Prior Quarter: EPS climbed 33% to 76 cents, the second straight quarter of accelerating growth. Sales expanded 23% to $759.3 million, with the gain accelerating for a third straight quarter.

Stock: Edwards Lifesciences fell 0.55% to 117.03, closing slightly below its 50-day line. The stock is extended from a 107.66 buy point. Edwards Lifesciences broke on July 26, then popped nearly 6% the following day on its Q2 earnings results. Edwards continued to rise as the FDA and European regulators gave approval for expanded use of its Sapien 3 heart valve, its top product.

Why It Matters: Edwards Lifesciences is the top-rated stock in the highly rated medical products group, boasting a best-possible 99 Composite Rating for its overall performance on earnings, share price and more.

Baxter International (BAX), a larger medical products firm, also reports earnings on Tuesday.

Merck

Estimates: EPS up 3% to 99 cents; revenue up 1% to $10.17 billion.

Prior Quarter: EPS climbed 8% to 93 cents as sales edged up 1% to $9.84 billion.

Stock: Merck shares dipped 0.7% Monday to 60.75. The stock hit a 15-year high of 64.85 on Oct. 10 on good news for a cancer drug — and bad news for a rival treatment from Bristol-Myers Squibb (BMY). But shares tumbled the next day, closing below the 50-day line. Merck has been unable to close above that key level since then.

Why It Matters: Drug giants are struggling to grow with old blockbusters coming off patent and new treatments scarce. Wall Street would like to see a sign that the big pharmaceuticals can still deliver.

Fellow Big Pharma players Eli Lilly (LLY) and Novartis (NVS) also report earnings on Tuesday.