Stocks To Watch: Retail Gets Tested With Walmart, Home Depot And CAGNY Conference On Tap

Summary:

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Two retail heavyweights could provide the headlines for the holiday-shortened trading week. Walmart (WMT) and Home Depot (HD) are both due to report Q4 earnings on February 21, with analysts anticipating solid numbers for the holiday quarter and cautious guidance for the year ahead. While the retail sales report for January was stronger than anticipated, the conference call cadence from Walmart and Home Depot on current trends could impact the broad market. Notably, both stocks trail the S&P 500 Index for the early part of the year. On the economic calendar, updates include the latest PMI prints, existing home sales, FOMC minutes, Q4 GDP revision, and the highly-anticipated core CPE prices read on inflation. The corporate calendar is loaded as the CAGNY Conference is typically chock-full of guidance updates from consumer companies and the Barclays Industrials Conference will include appearances from dozens of airline, trucking and logistics companies. Williams Companies (NYSE:WMB) will also hold a key investor event. The busy week ahead has Seeking Alpha contributors buzzing. Value Pendulum predicted an earnings beat for Walmart, while Cavenagh Research cautioned on the AI hype of Nvidia (NVDA) ahead of the chip maker’s report. Meanwhile, Jonathan Weber posted a preview on what to watch with Lucid Group’s (NASDAQ:LCID) earnings report.

Earnings spotlight: Tuesday, February 21 – Walmart (WMT), Home Depot (HD), Molson Coors (TAP), Caesars Entertainment (CZR), and Palo Alto Networks (PANW).

Earnings spotlight: Wednesday, February 22 – Stellantis (STLA), Baidu (BIDU), TJX Companies (TJX), eBay (EBAY), Nvidia (NVDA), Etsy (ETSY), and Lucid Group (LCID).

Earnings spotlight: Thursday, February 23 – Alibaba (BABA), Wayfair (W), Booking Holdings (BKNG), Moderna (MDNA), Domino’s Pizza (DPZ), Block (SQ), and Keurig Dr Pepper (NASDAQ:KDP).

Earnings spotlight: Friday, February 24 – EOG Resources (NYSE:EOG) and Taboola (NASDAQ:TBLA).

Volatility watch: Silvergate Capital (SI) and ImmunityBio (NASDAQ:IBRX) are high on the list of stocks with the highest percentage of short interest outstanding. Options trading has spiked over the last week on GlycoMimetics (NASDAQ:GLYC) and Reata Pharmaceuticals (NASDAQ:RETA). WeTrade Group (NASDAQ:WETG) has seen a notable spike in social media interest over the last 24 hours.

IPO watch: No IPOs are expected to start trading next week. Quiet periods will expire on TXO Energy Partners (TXO), QuantaSing Group (NASDAQ:QSG), Genelux (GNLX), and Brera Holdings (NASDAQ:BREA) to free up analysts to post ratings.

Dividend watch: Some of the notable companies expected to boost their quarterly dividend payouts next week include St. Joe Company (NYSE:JOE) to $0.12 from $0.10, Thermo Fisher (TMO) to $0.35 from $0.30, Domino’s Pizza (DPZ) to $1.26 from $1.10, and Home Depot (HD) to $2.10 from $1.90. Also watch National Presto (NPK) for a potential special dividend announcement.

Corporate events: Williams Companies (WMB) will host its 2023 Analyst Day event in New York on February 21. Management is scheduled to give in-depth presentations covering the company’s natural gas-focused strategy to meet growing clean energy demands. Radware (NASDAQ:RDWR) will hold a virtual investor and analyst meeting on February 22. During the event, Radware execs will discuss the company’s strategic direction, growth opportunities, and recent business developments as well as provide a financial update. On February 24, shareholders with Alpine Acquisition (NASDAQ:REVE) will vote on the deal to take experiential entertainment company Two Bit Circus public in a SPAC transaction. Check out Seeking Alpha’s Catalyst Watch for more events scheduled for next week.

Quant ratings: Stocks with recent quant rating upgrades include PVH (PVH) to Strong Buy from Hold, Eni S.p.A. (NYSE:E) to Strong Buy from Hold, NIO (NIO) to Hold from Sell. In terms of downgrades, Lightning eMotors (NYSE:ZEV) was dropped to a Strong Sell rating from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.

Notable conferences: One of the biggest consumer events of the year will take place next week with the Consumer Analyst Group of New York Conference takes place in New York City. The conference will have a heavy focus on food stocks with Sysco (SYY), General Mills (GIS), Conagra (CAG), Coca-Cola (KO), Kraft-Heinz (KHC), PepsiCo (PEP), J.M. Smucker (SJM), and Hostess Brands (TWNK) all set to appear. Also watch for an update from Philip Morris International (PM) that will be more forward-looking than the recent earnings call. The Barclays Industrial Select Conference next week will include presentations by Cintas Corporation (NASDAQ:CTAS), DuPont (NYSE:DD), United Airlines (UAL), Knight-Swift Transportation (NYSE:KNX), Honeywell (HON), Aptiv (APTV), General Dynamics (GD), Rockwell Automation (ROK), Rocket Lab USA (RKLB), and General Electric (GE).

Barron’s mentions: The cover story pitches the case that garbage stocks could be an attractive play for investors. The backdrop is that solid waste services are a necessary business with recession protection and the ability to grow margins. At the moment, the stocks are said to be cheap relative to their history even with fundamentals looking good and the outlook bright for healthy margin expansion this year. A long period of M&A in the industry has resulted in a shrinking number of smaller publicly traded companies in the waste management sector. The thinner playing field has given the industry pricing power. Rate increases in the high-single digit percentage range were enough to keep up with inflation costs last year and more price hikes this year are expected to protect margins. Three of the big names in the garbage game are Waste Management (NYSE:WM), Republic Services (NYSE:RSG), and Waste Connections (NYSE:WCN).

Sources: EDGAR, Bloomberg, CNBC, Reuters

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.