Wall Street Breakfast: The Week Ahead
Economic reports in the week ahead
The stock market is expected to face more twists in the Russian-Ukrainian drama next week, which will add to investor anxiety about the pace and impact of interest rate hikes. Revenue is due from Alibaba (NYSE:BABA), Home Depot (NYSE:HD), Lowe’s, (NYSE:LOW), Macy’s (NYSE:M), eBay (NASDAQ:EBAY), Dell Technologies (NYSE: DELL) and Block (NYSE:SQ). On the economic calendar, the second estimate of Q4 GDP should see an upward revision. Updates on new home sales and durable goods orders are also on the way. One of the biggest consumer conferences of the year will unfold with the CAGNY gathering likely to cast an even brighter spotlight on some favorite consumer staples. The oil market will also be in the spotlight next week as developments between Russia and Ukraine unfold and the prospect of higher output from Iran is weighed.
Earnings Spotlight: Tuesday, February 22 Home Depot (HD), Macy’s (M), Medtronic (NYSE: MDT), Caesars Entertainment (NASDAQ: CZR), Palo Alto Networks (NASDAQ: PANW) and Teladoc (NYSE: TDOC).
Earnings Spotlight: Wednesday, February 23 Lowe’s (LOW, TJX Companies (NYSE:TJX), Overstock.com (NASDAQ:OSTK), eBay (EBAY), Hertz Global (NASDAQ:HTZ), Overstock.com (OSTK), fuboTV (NYSE:FUBO) and Skillz ( NYSE: SKLZ).
Earnings Spotlight: Thursday, February 24 Anheuser-Busch InBev (NYSE: BUD), Moderna (NASDAQ: MRNA), Royal Bank of Canada (NYSE: RY), Li Auto (NASDAQ: LI), Nikola (NASDAQ: NKLA), Dell (DELL), Block (SQ ), Autodesk (NASDAQ: ADSK), VMware (NYSE: VMW), Coinbase Global (NASDAQ: COIN), Beyond Meat (NASDAQ: BYND) and Rocket Companies (NYSE: RKT).
Earnings Spotlight: Friday, February 25 Foot Locker (NYSE: FL), Cinemark Holdings (NYSE: CNK) and Icahn Enterprises (NASDAQ: IEP).
IPO and SPAC monitoring: Akanda (AKAN) is expected to start trading on February 24. The analyst silence period expires on Credo Inc (NASDAQ:CRDO), Ponce Financial Group Inc (NASDAQ:PDLB) and Fgi Industries Inc (NASDAQ:FGI) on February 22. The IPO lock-up period for a block of RenovoRx shares (RXNT) also expires on February 22.
Projected dividend increases: Companies planning to increase their quarterly dividend payouts include Foot Locker (FL) at $0.38 from $0.30, Universal Display (NASDAQ:OLED) at $0.25 from $0.20, L3Harris (NYSE :LHX) at $1.21 from $1.02, MGP Ingredients (NASDAQ:MGPI) at $0.14 from $0.12, Danaher (NYSE:DHR) at $0.24 from $0.21, Silgan (NASDAQ:SLGN) at $0.16 from $0.14, LeMaitre Vascular (NASDAQ:LMAT) at $0.125 from $0.110, Allstate (NYSE:ALL) at $0.92 from $0.81 and Diamondback Energy ( NASDAQ:FANG) at $0.55 instead of $0.50.
Consumer speech: The Consumer Analyst Group’s virtual conference in New York is happening next week. The list of companies due to attend includes General Mills (NYSE:GIS), Philip Morris International (NYSE:PM), Sysco (NYSE:SYY), Coca-Cola (NYSE:KO), JM Smucker (SJK) and Mondelez International (NASDAQ: MDLZ). On its earnings call, Kraft Heinz (NASDAQ:KHC) executives said they would use CAGNY’s presentation to outline the grocery giant’s plans to accelerate earnings growth. Consumer staples stocks have outperformed the S&P 500 so far in 2022. Notable gainers include Philip Morris +17.0%, Altria (NYSE:MO) +9.2%, Sysco +6.4% , Coca-Cola +5.6%, ConAgra Foods (NYSE: CAG) +5.5% and Hershey (NYSE:HSY) +4.7%.
Block revenue preview Block (SQ) is due to release its results on February 24. The update comes at a turbulent time for Block with headlines about Apple’s introduction of iPhone-based card acceptance weighing on stocks. SQ’s forecast for 2022 and an update on the Cash App product are seen as potentially driving the stock price move.
Spotlight on Home Improvement Trends: Home Depot (HD) is set to report earnings on Feb. 22, with consensus ratings of $34.8 billion and EPS of $3.17. Lowe’s (LOW) is due to report results on Feb. 23, with analysts calling for revenue of $20.9 billion and EPS of $1.69. The setup looks solid for both home improvement retailers, with the housing market remaining solid in an environment that Telsey Advisory Group said includes strong home prices, healthy renovation activity and strong household formation. What about inflation? Tractor Supply (NASDAQ:TSCO) said inflation helped its fourth-quarter comparable sales by more than 800 basis points and price pass-through has yet to lead to demand destruction.
Corporate events: Cummins (NYSE:CMI) is holding its first Investor Day in several years on February 23. The company should provide more color on long-term goals and the new energy segment. Xerox (NASDAQ:XRX) is also hosting an Investor Day event on the same day. On February 24, Meta Platforms (NASDAQ:FB) CEO Mark Zuckerberg will deliver a keynote on AI in the Metaverse. The conference will cover Meta’s current groundbreaking research and future big bets that it believes will lay the groundwork for a new class of creative and immersive experiences today and in the Metaverse tomorrow. Polaris (NYSE:PII) has an analyst meeting scheduled for Feb. 24 to outline revised long-term strategies to drive accelerated growth and profitability in an expanding powersports market. East Stone Acquisition (NASDAQ:ESSC) shareholders gather to vote on extending the SPAC agreement to take JHD Holdings public. Check out some of the other events scheduled for next week that could lead to stock price movements in Seeking Alpha’s Catalyst Watch.
Information on mergers and acquisitions: The start date on the Peoples United Financial (NASDAQ:PBCT)-M&T Bank (NYSE:MTB) deal is February 21. The go-shop period on Take-Two Interactive’s (NASDAQ:TTWO) acquisition of Zynga (NASDAQ:ZNGA) is February 24. The sale of RR Donnelley Inc (NYSE:RRD) to Chatham Asset Management could close as early as Feb. 25 with all regulatory approvals in line. Shareholders of Momentive Global Inc (NASDAQ:MNTV) and Zendesk Inc (NYSE:ZEN) will vote Feb. 25 on the proposed merger between the two companies. The deal is getting a lot of backlash from activist investors and some recommendations from proxy firms to vote against.
Mentions of Barron: Ethan Allen (NYSE:ETD) is featured this week as a value play. The publication says that if the stock’s valuation reaches its pre-pandemic low double-digit PE, Ethan Allen could return more than 25% to new investors. The dividend yield of 4.6% is more than triple that of the mid-cap small cap. DuPont (NYSE:DD) is also highlighted as a stock to consider. It is noted that DuPont is trading a slower growing business for a faster growing one with the acquisition of Rogers. The goal of the deal with Rogers and other takeovers is to create a leading multi-industry company with faster growth and less dependence on economic cycles than it is today.
Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital