Stocks To Watch: Spotlight On Lucid Group, Honeywell, Hyatt And Icahn Enterprises
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The April CPI report due out on May 10 is the headliner event of the week with economists forecasting a 0.3% month-over-month increase in inflation for the month and 5.5% year-over-year gain. The inflation read arrives just as Federal Reserve members move out of a blackout period and make the rounds again with speeches. Following up the CPI print, the latest update on producer prices will be released on May 11 to also give inflation watchers another talking point. Seeking Alpha analyst John Matson’s said in his breakdown of the recent Federal Reserve meeting that FOMC members are staying right on track in the fight against inflation, but pointed to other variables in the mix such as the weakening U.S. dollar and bank liquidity issues.
The earnings focus turns next week on small cap stocks with a large number of members of the Russell 2000 Index report due to report. The Russell 2000 has sharply underperformed the S&P 500 Index this year amid worries over economic growth, interest rates, and inflation. Of note, the Russell 2000 index recently registered the Death Cross on its chart, with the 50-day moving average falling below the 200-day average. Some of the key earnings reports to watch in the week ahead from larger companies include updates from Disney (NYSE:DIS) (preview), Airbnb (ABNB), Tyson Foods (TSN), Fox (FOXA), Palantir Technologies (PLTR) (preview), Li Auto (LI) and Roblox (RBLX) (analysis). There is also the delayed Icahn Enterprises L.P. (IEP) earnings call, which could feature some fireworks after legendary activist investor Carl Icahn was hit by a short report from Hindenburg Research on IEP.
Earnings spotlight: Monday, May 8 – PayPal Holdings (PYPL), Tyson Foods (TSN), KKR (KKR), Lucid Group (NASDAQ:LCID) and Freshpet (FRPT).
Earnings spotlight: Tuesday, May 9 – Duke Energy (DUK), Airbnb (ABNB), Fox (FOX), Coupang (CPNG), Rackspace Technology (RXT), and Nikola (NKLA).
Earnings spotlight: Wednesday, May 10 – Disney (DIS), Trade Desk (TTD), Roblox (RBLX), Li Auto (LI), and Unity Software (U).
Earnings spotlight: Thursday, May 11 – JD.com (JD), US Foods (USFD), and News Corporation (NWS).
Earnings spotlight: Friday, May 12 – Spectrum Brands (SPB) and Soho House (SHCO).
Volatility watch: Short interest on Virgin Galactic (SPCE) and Cinemark (CNK) is still elevated. Options trading volume is elevated on Western Alliance Bancorporation (WAL) and Metropolitan Bank Holding (MCB). Another stock on the watch list is Volaris (VLRS). An aviation industry review is expected to be completed later this month in Mexico that could include a Mexico Category I reinstatement for Volaris in a development that could boost growth in the second half of the year.
IPO watch: Strong Global Entertainment (SGE) is expected to start trading. The company is expected to see its $8M IPO priced at around $5 per share. Based in North Carolina, Strong provides projection screens and support services to cinema operators such as IMAX, Cinemark and AMC. The company also produces feature films and related content through its Strong Studios unit. Strong is a spinout of Ballantyne Strong (BTN), which changed its name to FG Holdings in December (FGH). After the IPO, FG is expected to retain a majority of the voting power of Strong’s common stock, according to the filing.
Dividend watch: Companies forecast to boost their quarterly payouts include Tegna (TGNA) to $0.16 from $0.11, Kelly Services (KELYA) to $0.085 from $0.075, Cheesecake Factory (CAKE) to $0.30 from $0.27, Marriott International (MAR) to $0.45 from $0.40, and Dine Brands (DIN) to $0.56 from $0.51. See Seeking Alpha’s list of Quick Dividend Stock Picks.
Disney earnings preview: Disney (DIS) is scheduled to unveil its fiscal second quarter earnings results before the opening bell on Wednesday. Analysts expect Disney to report revenue of $21.80B and EPS of $0.94. Earnings day arrives at a turbulent time for the media giant with a writers’ strike threatening the streaming content pipeline, a legal battle with Florida Governor Ron DeSantis, and jobs cuts at ESPN. Analysts will be looking for color on the impact of cost-cutting initiatives and consumed demand.
CPI preview: The April inflation report will be one of the marquee event next week with headline inflation forecast to increase 0.4% month-over-month and be up 5.6% from a year ago. Energy prices are likely to have risen during the month and food prices are not anticipated to show the deceleration that they did in March. Air fares and healthcare insurance are two categories expected to see a month-over-month decline. “We generally expect core goods categories other than used cars to exhibit disinflation rather than deflation, previewed Bank of America. The firm noted that demand is softening for goods and supply chain conditions have improved notably, but prices are looking to be more rigid forecast.
Eyes on auto: Fisker (NYSE:FSR) CEO Henrik Fisker and Mobileye (MBLY) CEO Amnon Shashua are the two of the notable speakers scheduled for the FT Future of the Car conference on May 10-11. Executives at Ferrari (RACE), Nissan (OTCPK:NSANY), Tesla (TSLA), Polestar Automotive (PSNY), Volkswagen (OTCPK:VLKAF), Ford (F), General Motors (GM), Uber (UBER), NXP Semiconductors (NXPI), Qualcomm (QCOM), and QuantumScape (QS) will also be speaking. Typically shy about conference appearances, Tesla is sending EMEA Sales Lead EMEA Stephanie Booth to the event with the Gigafactory in Berlin.
Corporate events: Accolade (NASDAQ:ACCD) will host an Analyst Day at the Wynn Las Vegas on May 8. Members of Accolade’s management team will provide color about the company’s long term vision, as well as key insights about its overall product, clinical, ecosystem and financial strategy. Corteva (NYSE:CTVA) will host a virtual R&D Innovation Update and Tucows Inc. (TCX) will host an Investor Day on May 9. Hyatt Hotels Corporation (NYSE:H) will host an Investor Day event on May 10 from one of its properties in Mexico. The event is being singled out by analysts as a potential share price catalyst. Honeywell (NASDAQ:HON) will also host its 2023 investor conference at the Nasdaq MarketSite in New York City on the same day. Check out Seeking Alpha’s Catalyst Watch for more events scheduled for next week.
Quant ratings: Stocks with recent quant rating changes include Universal Insurance Holdings (UVE) to Strong Buy from Hold, Allegiant Travel (ALGT) to Strong Buy from Buy, and LendingTree (TREE) to Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.
Box office: Walt Disney’s (DIS): Guardians of the Galaxy Vol. 3 is primed to dominate screens and knock off The Super Mario Bros. (CMCSA) from the top spot on the box office list. The new film, a wrap-up of the Marvel Comics-based film franchise, drew $17.5M in Thursday previews and marks Marvel’s latest attempt to jump-start each summer’s box office. That preview figure is ahead of the same number for its predecessor, Guardians of the Galaxy Vol. 2 — a film that went on to gross nearly $390M domestically (after a $164.5M opening) and a total of $863.8M worldwide. That points to a sure three-figure splash for Vol. 3, now tracking in the $120M-$130M opening range. The Guardians of the Galaxy franchise has paid off for Marvel and Disney. The first film grossed $333.2M domestically and $772.8M worldwide, to go with the sequel’s $863.8M worldwide. Vol. 3 is opening on a record 1,556 IMAX (IMAX) screens across 82 markets.
Barron’s mentions: Carrier Global (CARR) caught attention from the publication this week after the company earnings at a 19.4% clip a year on average over the past three years and the stock has outperformed major indexes. Even after the strong run, Carrier is noted to trade at less than 16X 12-month forward earnings vs. the 18X for the S&P 500. A new acquisition by Carrier of heat pump maker Viessmann Climate Solutions is expected to help it close the gap with the fast-growing Trane Technologies (TT). Shares of Carrier fell after the deal was announced, but analysts have called it attractive because it could accelerate the company’s pure-play HVAC transformation.
Sources: EDGAR, Bloomberg, CNBC, Reuters