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The first busy week of the earnings season will feature big reports across sectors with Bank of America (BAC), Johnson & Johnson (JNJ), Netflix (NFLX) and Procter & Gamble (PG) all due to step into the earnings confessional. Meanwhile, the economic calendar will include updates on industrial production and the closely-watched Empire manufacturing index. On the global stage, the Communist Party Congress begins in Beijing with President Xi Jinping expected to secure a historic third term. Inflation readouts and reactions are also likely to be a major factor and historians will be quick to circle October 19 as a day for hard hats.
IPO preview: Immune therapeutics developer Alopexx (NASDAQ:ALPX) is expected to start trading on October 19. The quiet period ends on Loop Media (NYSE:LPTV) on October 17. Watch Context Therapeutics (CNTX) and FRNT Financial (OTCPK:FRFLF) with IPO lockups hitting next week for blocks of shares.
Tesla earnings preview: Tesla (TSLA) will report earnings on October 19 in what is likely to be one of the more closely-watched reports of the earnings season. Wells Fargo is one of several firms over the last week that has moved up expectations for a slight Q3 beat even though the electric vehicle maker’s deliveries report rattled investors. One of the big question marks with Tesla (TSLA) is how to model benefits for TSLA from the Inflation Reduction Act, which sets up well for the company on the demand side. As for Tesla’s sputtering share price, research from Bespoke Investment Group revealed that when Tesla stock has fallen more than 20% over a seven-day stretch – the stock averaged gains of 37%, 84%, and 238% over the next month, three month, and one-year timespan, respectively.
Netflix earnings preview: Netflix (NFLX) will report earnings on October 18 with analysts looking for revenue of $7.85B and EPS of $2.17 to be reported. Consensus also calls for 1.1M paid subscriber additions for the quarter, a tally that was likely skewed by Stranger Things. The conference call is likely to dive into the issue of the streamer’s new AVOD tier. Morgan Stanley said it does not believe there has ever been a global media business of the scale of Netflix that moved from ad-free to ad-supported. “For marketers, this represents a massive increase in potential premium video ad impressions around the world and we expect strong demand,” noted analyst Benjamin Swinburne. A wildcard with the Netflix (NFLX) report will be the updates on FX pressures. That could come during a post-earnings video interview with co-CEO Reed Hastings, co-CEO & Chief Content Officer Ted Sarandos, CFO Spence Neumann, and Chief Product Officer Greg Peters. The discussion will be moderated by J.P. Morgan analyst Doug Anmuth.
Johnson & Johnson earnings preview: Johnson & Johnson (JNJ) heads into earnings report with some expectations already dialed back. However, Bank of America warned that JNJ could lower 2022 guidance nominally due to the macro backdrop, as well as continued F/X headwinds and inflationary pressure. Recent management commentary at conferences suggests that the healthcare giant expects improving trends in the early part in 2023. On the earnings call, analysts will be looking for the ex-vaccine growth forecast and color on the medtech business.
Paris Motor Show: The Paris Motor Show will open with a number of brands hoping to create some buzz. Renault’s (OTCPK:RNSDF) Alpine brand will show off the lightweight A110 R and a concept vehicle called the Alpenglow. Meanwhile, Renault’s budget brands will reveal the all-electric Manifesto off-road vehicle. Chinese automaker BYD Company (OTCPK:BYDDF) will display the Atto compact full-electric crossover, the Tang midsize crossover and the Han midsize sedan in hopes of creating engagement for the brand in Europe. Another Chinese automaker, Great Wall Motor Company (OTCPK:GWLLF), is anticipated to show its Funky Cat compact EV model and detail plans for European expansion for Ora and the Wey brand. Stellantis (NYSE:STLA) will have a big presence in Paris with the public debit of the Peugeot fastback 408. The model is said to be designed for efficiency and intelligent electrification, with two 180 hp and 225 hp rechargeable hybrid engines. The Jeep brand will introduce the all-new fully electric Jeep Avenger in Paris and showcase other all-electric models. Premium Stellantis brand DS Automobiles will feature the DS 7 with its 360 hp plug-in hybrid performance package. Mercedes-Benz (OTCPK:MBGAF) is not planning on having a stand at the show, but will reveal the EQE SUV at the Rodin Museum in Paris during the weeek. Independent German electric vehicle manufacturer Next.e.GO Mobile SE will be presenting its new vehicle lineup, which includes the 2022 urban BEV e.wave X as well as a new urban delivery EV. One of the mostly highly-anticipated vehicles to be displayed in Paris will be the Fisker (NYSE:FSR) Ocean midsize SUV that is set for mass production in November. The EV startup will display a production-intent top trim Fisker Ocean Extreme and is expected to issue new details on Ocean pricing, performance, and features. Finally, a sleeper at the auto show could be Vietnamese automaker Vinfast with its VF9 electric SUV. The reveal will be ahead of a planned launch in Europe and the U.S. Of note, Vinfast parent Vingroup is reportedly still considering an IPO in the U.S.
Corporate events: Shareholders with iRobot (NASDAQ:IRBT) will vote on the acquisition offer from Amazon (AMZN) on October 17. On the same day, BitNile Holdings (NYSE:NILE) will host a conference call to provide additional information on the planned spin-offs of the company’s subsidiaries. Adobe (ADBE) will host a meeting on October 18 with financial analysts and investors at Adobe MAX. The company’s executive team will provide update on the long-term market opportunity, strategy and innovation roadmap. On October 19, Hewlett Packard Enterprise (NYSE:HPE) will host its Securities Analyst Meeting with discussion on the company’s vision, strategy, and financial outlook. Western Union Company (NYSE:WU) will host an investor day event on October 20 with an update on the company’s long-term strategy followed by a Q&A session. Check Seeking Alpha’s Catalyst Watch for more events that move shares next week.
Barron’s mentions: Deckers Outdoor (DECK) is called out this week by the publication as a stock that has more attraction than just the Ugg business. While the shoe seller is at risk of pulling back on guidance for double-digit revenue growth due to sector-wide demand and inventory issues, Deckers is called a long-term winner with multiple brands performing well. In particular, Hoka is noted to now be the number two brand in the specialty running category behind industry leader Brooks. Hoka is growing so quickly that some estimate have it accounting for half of Deckers’ sales by 2025. On a valuation basis, Deckers trades with an earnings multiple of 16.5X vs. the five-year average of 18.6X.
Sources: EDGAR, Bloomberg, Automotive News CNBC, Reuters