Stocks To Watch: Eyes On McDonald’s, Alibaba, Philip Morris, F5 And PepsiCo

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The week ahead will see earnings reports continue to pour in as investors work their way through the bulk of the reporting season. The list of heavyweights due to report includes McDonald’s (NYSE:MCD) (analysis), Caterpillar (CAT) (analysis), Alibaba (BABA) (analysis), Philip Morris (NYSE:PM) (preview), and PepsiCo (NASDAQ:PEP) (analysis). Federal Reserve members will also be back out on the speaking circuit following last week’s FOMC meeting. Meanwhile, some of the key economic events to watch include the release of the Fed’s Senior Loan Officer Opinion Survey on bank lending practices and updates on consumer credit, the trade gap, and PMI. A bit of an economic wildcard will be the release of CPI seasonal factors on February 9, which could lead to slight revisions to seasonally adjusted inflation data. Historically, the month of February is a relatively flat month for the S&P 500 and Nasdaq 100 indices, while the Dow Jones Industrial Average has posted negative returns on average and the Russell 2000 Index has posted gains.

Earnings spotlight: Monday, February 5 – McDonald’s (MCD), Caterpillar (CAT), Vertex Pharmaceuticals (VRTX), Humana (HUM), Tyson Foods (TSN), NXP Semiconductors (NXPI), and Estee Lauder (EL). See the full earnings calendar.

Earnings spotlight: Tuesday, February 6 – Eli Lilly (LLY), Toyota Motor (TM), Centene (CNC), Amgen (AMGN), Ford Motor (F), and BP (BP). See the full earnings calendar.

Earnings spotlight: Wednesday, February 7 – Alibaba (BABA), CVS Health (CVS), Fox Corporation (FOXA), McKesson (MCK), Disney (DIS), Uber Technologies (NYSE:UBER), and PayPal (PYPL). See the full earnings calendar.

Earnings spotlight: Thursday, February 8 – ConocoPhillips (COP), Philip Morris (PM), Duke Energy (DUK), Expedia (EXPE), Take-Two Interactive (TTWO), Pinterest (PINS), and Kenvue (KVUE). See the full earnings calendar.

Earnings spotlight: Friday, February 9 – PepsiCo (PEP), Newell Brands (NWL), and AMC Networks (AMCX). See the full earnings calendar.

Volatility watch: Options trading volume and short interest are still high on B. Riley Financial (RILY). The most overbought stocks per their 14-day relative strength index include Selina Hospitality (SLNA), RayzeBio (RYZB), and Vera Therapeutics (VERA). The most oversold stocks per their 14-day Relative Strength Index include L. Catterton Asia Acquisition (LCAA), Chenghe Acquisition (CHEA), and iRobot (IRBT).

IPO watch: Specialty insurer Fortegra Group (TFG) and blockchain technology firm Trident Digital Tech (TDTH) are expected to start trading next week. Analyst quiet periods expire on Silynxcom (SYNX), Smith Douglas Homes (SDHC), and Roma Green Finance (ROMA). Blocks of shares of Fitell (FTEL), Asset Entities (ASST), and NeurAxis (NRXS) are due to roll off their IPO lockup period. Amer Sports (AS) will be on watch after rallying off its IPO pricing level on the first two days of trading.

PepsiCo earnings preview: PepsiCo (PEP) is due to report earnings on February 9. Analysts expect the food and beverage giant to report revenue of $28.4B, EPS of $1.72, adjusted EBITDA of $4.14B, a gross margin rate of 53.3%, and free cash flow of $2.39B for the quarter. One thing working in PepsiCo’s favor is that it has a tendency to top earnings expectations, with 16 straight quarters on the books of beating estimates on both the revenue and EPS lines. However, ahead of the report, Nielsen data has indicated some weakening trends for PepsiCo in the U.S. and Europe. The sales softening was enough for Bernstein analyst Callum Elliott to warn investors that a 2024 guidance cut could be doled out by PepsiCo alongside its Q4 numbers. Bank of America does not think the set-up for PepsiCo is as favorable in 2024 amid some consumer inflation fatigue and volume growth that still appears to be lackluster in key regions. Seeking Alpha analyst Niccolo Braccini was more positive, noting the PepsiCo business has a great moat with possible expansion opportunity abroad. Meanwhile, analyst Leo Nelissen reminded that PepsiCo has top-tier brands with pricing power, a fortress balance sheet, and a consistent dividend growth history. Options trading implies a 4% swing in share price after PepsiCo reports earnings.

Uber earnings preview: Uber Technologies (UBER) is lined up to report earnings on February 7 before the market opens. The mobility services company is looking to disclose two consecutive profitable quarters for the first time ever. Uber is forecast to report revenue of $9.77B, gross bookings of $37.1B, adjusted EBITDA of $1.2B, and EPS of $0.39. Uber is also expected to report monthly active users of 148.2M and monthly trips per active users of 5.70. Options trading on Uber suggests a 7% swing in share price after earnings are released. Uber rallied 4.5% after its last earnings report. Looking further down the road, Bank of America thinks Uber offers investors one of the best three-year to five-year growth profiles in the Internet sector, with potential for mid-to-high teens bookings growth and 30% EBITDA growth as margins increase from 3.5% of bookings to close to 7%. Driver supply and advertising growth are expected to continue to fuel margins. Uber investors could also be rewarded with capital returns and a spinoff of the freight business, per BofA. Seeking Alpha analysts also have a consensus Buy rating on Uber, with Tom Lloyd the latest to come in with a favorable appraisal of the stock.

Investor events: The World Defense Show will take place in Saudi Arabia. Companies scheduled to participate include General Dynamics (GD), BAE Systems (OTCPK:BAESF), Lockheed Martin (LMT), Airbus (OTCPK:EADSF), Boeing (BA), Northrop Grumman (NOC), and L3Harris (LHX). As part of its presence, Boeing (BA) will present a virtual-reality display of the F-15EX cockpit. On February 6, BigBear.ai (BBAI) will host an investor presentation that will include updates on the company’s planned acquisition of Pangiam. F5 (NASDAQ:FFIV) will host a strategy and product session for investors and financial analysts on February 8 in connection with F5’s premier application security and delivery conference called AppWorld.