Wall Street Breakfast: The Week Ahead
Economic reports in the coming week
Investors are leaving for the second trading week of the year with some indications that the valuation of high growth, high PE stocks could continue. The first two very big investor conferences of the year are also on the agenda with the ICR Retail Conference and JPMorgan Healthcare Conference expected to lead to a wave of business advice and updates. On the economic calendar, updates on wholesalers’ inventories, consumer prices and producer prices are headlining. Meanwhile, Albertsons (NYSE: ACI) and Delta Air Lines (NYSE: DAL) are entering the profits confessional with reports that could shake their respective sectors. At the end of the week, the fourth quarter earnings season gets off to a good start with a flurry of highly anticipated reports from big banks.
Spotlight on Earnings: Monday, January 10 Tilray (NASDAQ: TLRY)
Spotlight on Earnings: Tuesday, January 11 Albertsons Companies (ACI).
Winning spotlight: Wednesday January 12 Jefferies (NYSE: JEF), KB Home (NYSE: KBH).
Winning spotlight: Thursday, January 13 Delta Air Lines (DAL).
Earnings Spotlight: Friday January 14 JPMorgan (NYSE: JPM), Wells Fargo (NYSE: WFC), BlackRock (NYSE: BLK) and Citigroup (NYSE: C).
IPO watch: Quiet periods are scheduled to expire on January 10 Bionomics Limited (NASDAQ: BNOX), Genenta Science SpA (NASDAQ: GNTA), Immix Biopharma (NASDAQ: IMMX), Samsara (NYSE: IOT), Sidus Space (NASDAQ: SIDU) and Fresh Vine wine (NYSE: VINE). Watch F45 Training Holdings (NYSE: FXLV) and Phillips Edison & Company (NASDAQ: PECO) on January 11 with the IPO lock-in period expiring. JWG and TPG (TPG) are expected to start trading on January 13.
Projected dividend increases: Dividend increases slated to be announced next week include Shutterstock (NYSE: SSTK) at $ 0.25 from $ 0.21, Signet (NYSE: SIG) to $ 0.20 from $ 0.18, Jacobs (NYSE: J) at $ 0.23 from $ 0.21, Apogee Enterprises (NASDAQ: APOG) at $ 0.215 from $ 0.200, Real Estate Income (NYSE: O) at $ 0.247 from $ 0.2464.
ICR preview: One of the biggest retail events of the year takes place next week in Florida with the ICR Annual Conference. The event is known to have seen a flurry of forecast updates as companies set their outlook for the year, although some analysts believe there will be less action this year than normal due to macroeconomic uncertainty. UBS expects strong updates overall, with channel checks suggesting that the buying environment has seen a surprising improvement in the last two weeks of December. The company names Crocs (NASDAQ: CROX) as a stock that could see the biggest leap forward in ICR news. This would mark a trend for CROX after stocks jumped more than 10% last year following its ICR presentation. Lululemon (NASDAQ: LULU) and Boot Barn (NYSE: BOOT) are also expected to surprise on the upside with their forecast updates. Other retailers to watch for presentations and press releases include American Eagle Outfitters (NYSE: AEO), Abercrombie & Fitch (NYSE: ANF), Boot Barn (BOOT), Crocs (CROX), Lululemon (LULU), On Holding AG (NYSE: ONON) and Urban Outfitters (NASDAQ: URBN).
Health in the spotlight: The JPMorgan healthcare conference is expected to set the stage for the biotech sector in 2022. Healthcare stocks have a five-year trend to outperform the S&P 500 at the high-level conference with large numbers. test data and updates to the standard. Some of the companies expected to provide updates are BioMarin Pharmaceutical (NASDAQ: BMRN) on its crucial 2-year Roctavian Phase 3 data, Seagen (NASDAQ: SGEN) on initial Phase 1 data for SEA-CD40 in cancer. and Gilead Sciences (NASDAQ: GILD) on Phase 3 TROPiCS-02 data for Trodelvy in HR + / HER2- breast cancer. Other companies that have historically announced guidance or data at the conference include Regeneron Pharmaceuticals (NASDAQ: REGN), Sarepta Therapeutics (NASDAQ: SRPT), PTC Therapeutics (NASDAQ: PTCT), Ironwood Pharmaceuticals (NASDAQ: IRWD) and Clovis Oncology (NASDAQ: CLVS).
Albertsons Revenue Overview Evercore ISI made a positive tactical trade appeal to Albersons Companies (ACI) ahead of the grocery store operator’s earnings report next week. The company sees ACI stock’s potential reach $ 32 based on probable earnings and a constructive F4Q outlook. Looking ahead, Evercore predicts stable EBITDA for Albertsons due to increased gas profitability, accelerated completion of the centralized purchasing initiative, continued pharmacy benefits through vaccinations, expense comparisons Favorable COVIDs and rational pricing dynamics in the industry. The company also believes that rising interest rates could lead to outperformance due to the defensive characteristics of the ACI and the relative discount of the S&P valuation. Albertsons has beaten sales estimates in six straight quarters.
The recovery in the event of a pandemic plays: Investors looking to anticipate the post-COVID era have a new Credit Suisse list of leisure recovery picks to consider. The company’s most compelling collection of ideas includes MGM Resorts International (NYSE: MGM), Hilton Grand Vacations (NYSE: HGV), International Game Technology (NYSE: IGT), and SeaWorld International (NYSE: SEAS) as names which offer asymmetric risk-reward and are expected to outperform over the next 12 months. MGM Resorts makes the list based on accelerating trends in Vegas, a more streamlined operating structure that should drive valuation and an attractive capital structure. Meanwhile, Hilton Grand Vacations is considered the least followed name in Credit Suisse coverage. SeaWorld is benefiting this year from operating leverage, demand push and pricing power underestimated and International Game Technology is the global top choice.
Corporate events: Shareholders of Capstar Special Purpose Acquisition (NYSE: CPSRU) are meeting on January 11 to vote on the business combination with weight loss maker Gelesis. The PSPC deal is expected to give Gelesis a net worth of around $ 1.3 billion. Also on January 11, Dell Technologies (NYSE: DELL) CEO Michael Dell participates in a fireside chat hosted by Bank of American. At the end of the week, Monster Beverage Corporation (NASDAQ: MNST) is hosting a virtual investor meeting to take stock of the company’s business and operations. Monster is expected to post a positive outlook for 2022. Beverage stocks in general have fallen in favor in recent weeks as investors have suffered a valuation reset. Monster Beverage is the first winner over the last month with a gain of 12% against + 11% for Coca-Cola (NYSE: KO) and + 6% for Keurig Dr Pepper (NASDAQ: KDP). In addition to these players – Vita Coco (NASDAQ: COCO), Coca-Cola FEMSA (NYSE: KOF), Coca-Cola Europacific Partners (NASDAQ: CCEP), PepsiCo (NASDAQ: PEP), Primo Water (PRMW) are all more high in the past month. Another item to watch throughout the week will be the expiration of the HSR deadline for the agreement between AMD (NASDAQ: AMD) and Xilinx (NASDAQ: XLNX). The merger is pending approval from Chinese antitrust authorities. If not approved by January 11, a new HSR filing will need to be made in a development that could give stocks a boost.
Distribution of shares: The 5-for-1 stock split for AeroCentury (NYSE: ACY) goes into effect on January 7.
Barron’s mentions: MGM Resorts (MGM) is named as one of the best casino actions. The publication notes that MGM is not only well positioned to capitalize on a strong recreation recovery in Las Vegas, but it also has promising digital business and plenty of transaction money to drive growth. In the electric vehicle sector, Proterra (NASDAQ: PTRA) stands out. The electric bus maker already has products and sales, which puts it ahead of many electric vehicle companies and profitability shouldn’t be far behind. This week’s cover story explains why investors should play the commodities boom with rising inflation, problems in China, extreme weather trends and the switch to renewables. Even the boom in the number of vegetarians is expected to increase demand for legumes, soybeans, and alternative protein sources like nuts and avocados. Meanwhile, low-carbon fuel standards in Western states are driving increased demand for soybeans and sugarcane.
Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital