Stocks To Watch: Spotlight On Coca-Cola, Coinbase, Shopify And Cisco

Summary:

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Investors will turn their attention back to interest rates next week, with the consumer price index and producer price index reports due out. Other economic releases of note include the retail sales report, Philadelphia Fed Index update, the Industrial Production report, and the latest University of Michigan consumer sentiment survey. Amid the flurry of economic news, Federal Reserve speakers will be out in full force in the week ahead. The schedule includes Thomas Barkin speaking at an Atlanta Economics Club Event, Neel Kashkari participating in an Economic Club of Minnesota discussion, Austan Goolsbee speaking in a Q&A format, both Mary Daly and Michael Barr speaking at the NABE Conference, and Raphael Bostic giving a talk on the economic outlook. At the time of publication, futures trading implied an 18% probability of a rate cut at the March FOMC meeting and a 60% probability that the target rate would be lower than where it stands now after the May meeting. Apart from economic data, there will also be key earnings reports from Coca-Cola (NYSE:KO) (preview), Shopify (SHOP), Cisco (CSCO), Coinbase Global (NASDAQ:COIN) (preview), and Applied Materials (AMAT) that will be closely watched. Hedge fund 13F filings are also expected to pour in ahead of the deadline for reporting Q4 positions. Investors may be watching to see if hedge funds made any significant moves with the Magnificent Seven Group of Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). On the M&A front, shareholders with Hawaiian Holdings (HA) will vote on the pending deal with Alaska Air Group (ALK).

Earnings spotlight: Monday, February 12 – Arista Networks (ANET), Avis Budget Group (CAR), The Goodyear Tire & Rubber Company (GT), and monday.com (MNDY). See the full earnings calendar.

Earnings spotlight: Tuesday, February 13 – Coca-Cola (KO), Shopify (SHOP), Airbnb (ABNB), Marriott International (MAR), Datadog (DDOG), Molson Coors Beverage Company (TAP), Hasbro (HAS), Airbnb (ABNB), Biogen (BIIB), Upstart Holdings (UPST), and Lyft (LYFT). See the full earnings calendar.

Earnings spotlight: Wednesday, February 14 – Cisco (CSCO), Sony (SONY), The Kraft Heinz Company (KHC), and Global Payments (GPN), Twilio (TWLO), and QuantumScape (QS) See the full earnings calendar.

Earnings spotlight: Thursday, February 15 – Applied Materials (AMAT), Deere (DE), Stellantis (STLA), DoorDash (DASH), Wendy’s Company (WEN), Coinbase Global (COIN), SunPower (SPWR) and Roku (ROKU). See the full earnings calendar.

Earnings spotlight: Friday, February 16 – TC Energy (TRP) and Vulcan Materials (VMC). See the full earnings calendar.

Volatility watch: Options trading volume and short interest is still high on New York Community Bancorp (NYSE:NYCB) and TeraWulf (WULF). The most overbought stocks per their 14-day relative strength index include Adverum Bio (ADVM), Super Micro Computer (SMCI), and Kaman (KAMN). The most oversold stocks per their 14-day Relative Strength Index include Sigma Lithium Corp (SGML), New York Community Bancorp (NYCB), and Extreme Networks (EXTR).

IPO watch: Medical technology manufacturer Scripps Safe (SCRP), tourism company Amphitrite Digital (AMDI) and real estate player Metros Development (MTRS) are expected to start trading next week. The IPO lock-up and market stand-off agreements executed by Instacart’s (NASDAQ:CART) directors, officers, and holders of convertible shares will expire. The analyst quiet periods expire on Palmer Square Capital (PSBD), CCSC Technology International (CCTG), and Kaspi.kz (OTC:KSPI) to free up analysts to post ratings.

Dividend watch: Companies forecast to increase their quarterly dividend payouts include Olympic Steel (ZEUS) to $0.15 from $0.125, Bruker (BRKR) to $0.06 from $0.05, Sherwin Williams (SHW) to $0.715 from $0.605, Wabash National (WNC) to $0.09 from $0.08, and Texas Roadhouse (TXRH) to $0.61 from $0.55. Read through some of the dividend stock picks from Seeking Alpha analysts.

Macroeconomic preview: Bank of America said that after the markets absorbed blockbuster growth in the second half of 2023, a crucial question is whether economic momentum has carried into the new year. So far, the economic reports covering January have generally been positive, which means some investors may question if inflation concerns should be back in the mix. “From a bottom-up perspective, housing disinflation and used car deflation should keep a lid on inflation in coming months. From a top-down perspective, there seems to be broad agreement on the FOMC that supply expansion has aided disinflation,” noted BofA. The firm thinks the key question is whether demand is slowing or accelerating under the hood, which will factor into the Fed’s upcoming decisions on interest rates. Evidence suggests that deflation may be a stronger threat than headline numbers indicate. Seeking Alpha analyst James Foord thinks the Federal Reserve may be late in pulling the trigger on cutting rates, but advised that fiscal stimulus from the Treasury Department may balance out any potential deflationary pressures and support higher stock prices.

Coca-Cola earnings preview: Coca-Cola (KO) will report earnings on February 13. Analysts expect the beverage giant to disclose revenue of $10.65B and EPS of $0.49 for the quarter. Adjusted operating income of $2.47B is expected to be churned up. Organic sales are forecast to be up 8.80% during the quarter, which would more than double the pace that PepsiCo (PEP) just reported for a roughly overlapping quarter. Organic sales are expected to be at a double-digit rate in both the Europe/Middle East/Africa and Latin America segments. Coca-Cola is expected to price/mix growth of 6.4% during the quarter and unit case volume growth of 2.1%. Coca-Cola has topped EPS estimates in 16 straight quarters and has also beat revenue marks in 14 of those quarters. Options trading implies a 3% share price move after the earnings report drops. Coca-Cola rose 3% after its last earnings report. Two stocks that correlate very tightly with Coca-Cola after earnings reports are Mondelez International (MDLZ) and Coca-Cola Europacific Partners (CCEP).

Investor events: Microsoft (MSFT) is expected to hold a business update event covering the future of Xbox. Restaurant Brands International (QSR) will host an investor event with CEO Josh Kobza and Executive Chairman Patrick Doyle at the New York Stock Exchange on February 15. Ford (F), Aptiv (APTV), Adient (ADNT), and Lear (LEA) are some of the companies due to participate at the Wolfe Research’s Global Auto and Auto Tech Conference during the week. Other key conferences in the week ahead include the TD Cowen Aerospace & Defense Conference, Stifel Transportation & Logistics Conference, and the Oppenheimer Healthcare Life Sciences Conference. The most highly-anticipated Wolfe Research’s Global Auto and Auto Tech Conference.