Federal Reserve Talk, Walgreens Earnings And UPS Under The Spotlight

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The spotlight in the week ahead will burn bright on the reappearance of Federal Reserve speakers after they were in a blackout period following the recent FOMC meeting. Fed board governors will be giving various talks, capped off at the end of the week by Federal Reserve Chairman Jerome Powell participating in a moderated discussion before the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference. Goldman Sachs thinks that Powell and a slight majority of the FOMC feel strongly about not delaying cuts for too long and are targeting the June FOMC meeting for the first cut. On Seeking Alpha, analyst Zoltan Ban warned that the Federal Reserve may need to raise rates after the election due to the combination of inflationary federal budget deficits and a scarcity of goods effect.

The economic calendar next week features the Fed’s preferred inflation gauge with the PCE price index report, as well as reads on consumer confidence and durable goods orders. The corporate calendar includes the Walgreens Boots Alliance (WBA) earnings report and a potentially important investor day event for United Parcel Service (NYSE:UPS).

Earnings spotlight: Monday, March 25 – Westport Fuel Systems (WPRT). See the full earnings calendar.

Earnings spotlight: Tuesday, March 26 – McCormick (MKC) and GameStop (GME). See the full earnings calendar.

Earnings spotlight: Wednesday, March 27 – Paychex (PAYX), Carnival (CCL), Jefferies (JEF), and H.B. Fuller (FUL). See the full earnings calendar.

Earnings spotlight: Thursday, March 28 – Walgreens Boots Alliance (WBA), Oxford Industries (OXM), and Torrid (CURV). See the full earnings calendar.

Volatility watch: Options trading volume is elevated on SPAC player Digital World Acquisition (NASDAQ:DWAC) ahead of the potential public listing of Trump Media & Technology next week. The media stock trades about about 25% below its 52-week high. The list of highly-shorted stocks heading into the new week includes Guess? (GES) and Bowlero (BOWL). The most overbought stocks per their 14-day relative strength index include Sweetgreen (SG), SIGA Technologies (SIGA), and DXP Enterprises (DXPE). The most oversold stocks per their 14-day Relative Strength Index include Sirius XM (SIRI), Urban One (UONEK), and Lifecore Biomedical Inc (LFCR).

IPO watch: The IPO calendar continues to heat up, with three smaller-sized debuts anticipated next week. NeOnc Technologies (NTHI), Mobile-Health Network Solutions (MNDR), and Alta Global Group are all expected to price their IPOs and begin to start trading. The analyst quiet period ends for SolarMax Technology (NASDAQ:SMXT) to free up analysts to post ratings. Certain blocks of shares of Lead Real Estate (LRE), Vs Media (VSME), and Syra Health (SYRA) will see the IPO lockup periods expire. Reddit (RDDT) will also be watched closely as it enters second week of trading after a wild swing in the social media platform stock over its first two sessions.

Dividend watch: Companies forecast to increase their quarterly dividend payouts include Cal-Maine (CALM) to $0.554 from $0.116, Oxford Industries (OXM) to $0.75 from $0.65, and TJX Companies (TJX) to $0.3757 from $0.3325. Read through some of the dividend stock picks from Seeking Alpha analysts.

UPS investor day preview: One of the key events of the week could be the United Parcel Service (UPS) Investor Day on March 26. Morgan Stanley thinks the UPS presentation will be an important catalyst for the stock as expectations are reset after a tough 2023. Investors will be looking to see what UPS management’s approach will be to tackle a shift in e-commerce supply chains with growing regionalization, competitive pressure on pricing, the Amazon risk, and new competition from low-mix players like Temu and Shein. “While mgmt is likely to pull the cost lever to offset these revenue pressures, the question is how much credit investors will give them given the relatively limited opportunity to take cost out in the face of revenue pressure,” previewed analyst Ravi Shanker. Updates from UPS on strategic actions for non-core parts of the business, international priorities, and management succession planning are also seen as key. Morgan Stanley said it continues to believe that normalized EPS is in the $8 range and structural earnings risk warrants an implied 12X PE, as reflected in the firm’s price target of $95. On Seeking Alpha, analyst Kody’s Dividends sees UPS as a turnaround play trading at an opportune valuation.

Investor events: General Motors (GM), Adient (ADNT), Lear (LEA), and BorgWarner (BWA) are some of the companies scheduled to participate in the Bank of America Global Auto Summit. The four-day Adobe Summit Digital Experience Conference will begin. Adobe (ADBE) CEO Shantanu Narayen will speak at the conference along with the company’s other top executives. General Motors (GM) CEO Mary Barra and Delta Air Lines (DAL) CEO Ed Bastian will be guest speakers. Kimberly-Clark (KMB) will hold its Analyst & Investor Day event. The event will feature management updates on the company’s strategic priorities, key initiatives, and new long-term financial algorithm.

New EV player: Chinese smartphone company Xiaomi will formally launch and start deliveries of its long-awaited electric vehicle. The smartphone maker has a goal for the full-size SU7 sedan to become one of China’s top three best-selling luxury electric vehicle models. The SU7 is being targeted to compete in China with Tesla’s (TSLA) Model 3 and the Zeekr 001. Xiaomi-branded EVs will be manufactured by state-owned automaker BAIC Group in a Beijing factory with an annual capacity of 200K vehicles. Ahead of the launch, Xiaomi said it would open the waitlist for the SU7 for 59 stores in 29 cities in China. The smartphone giant has indicated that it plans to invest $10B in its vehicle business over the next ten years.

Stock split watch: Chipotle’s (CMG) big rally following the restaurant company’s announcement of a 50-for-1 stock split has investors asking which companies could be the next to announce a major stock split. A screen of companies that have a market cap of over $2B, a share price of over $100, and gains of over 100% over the last 52 weeks could shorten the guesswork. That list of split candidates includes Super Micro Computer (SMCI), Coinbase Global (COIN), e.l.f. Beauty (ELF), XPO (XPO), Netflix (NFLX), Eli Lilly (LLY), Deckers Outdoor (DECK), DoorDash (DASH), and Royal Caribbean (RCL). As for thinned-down Chipotle (CMG), Seeking Alpha analyst Pearl Gray Equity and Research has a deep dive on what the implication of the split is for shareholders.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.