Wall Street Breakfast: The Week Ahead

Feb. 16, 2020 7:30 AM ET18 Comments
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Wall Street Breakfast

Welcome to Wall Street Brunch, our preview of stock market events for investors to watch during the upcoming week. You can also catch this article a day early by subscribing to the Stocks to Watch account for Saturday morning delivery. Podcast listener? Subscribe now to receive Wall Street Breakfast by 8:00 a.m. every trading day on Seeking Alpha, iTunes, Stitcher and Spotify (click the highlighted links).

The retail sector will be in the spotlight next week as Walmart (NYSE:WMT) reports earnings for the holiday quarter earnings and the huge CAGNY conference full of food and beverage companies runs for four days. On the economic front, FOMC minutes will drop on February 19, while the following two days will see reports on housing starts, building permits, existing home sales and manufacturing pour out. Coronavirus updates will also be closely watched, with a growing number of U.S. companies either pulling their full-year forecasts or guiding to the cautious side due to exposure to China.

Notable earnings reports: Walmart (WMT), Agilent (NYSE:A), Herbalife (NYSE:HLF), Groupon (NASDAQ:GRPN) and Scientific Games (NASDAQ:SGMS) on February 18; IMAX (NYSE:IMAX), Blue Apron (NYSE:APRN), Wingstop (NASDAQ:WING), Albermarle (NYSE:ALB), Hyatt Hotels (NYSE:H), Sunoco (NYSE:SUN), Dish Network (NASDAQ:DISH) and Zillow (NASDAQ:ZG) on February 19; Norwegian Cruise Line Holdings (NYSE:NCLH), (NASDAQ:VIAC), Domino's Pizza (NYSE:DPZ), Universal Display (NASDAQ:OLED) and Dropbox (NASDAQ:DBX) on February 20; Diana Shipping (NYSE:DSX), Royal Bank of Canada (NYSE:RY) and Deere (NYSE:DE) on February 21.
Go deeper: See Seeking Alpha's complete list of earnings reporters.

IPO watch: No IPOs are expected to price in the U.S. next week as the market cools its heels. In Hong Kong, the 90-day lockup period on shares sold by Alibaba (NYSE:BABA) in a secondary offering expires on February 18. Go deeper: Catch up on all the latest IPO news.

Projected dividend changes (quarterly): Six Flags Entertainment (NYSE:SIX) is still being watched for a potential dividend cut to $0.42 from $0.89. The theme park operator has been on watch to cut its dividend ever since hitting a roadblock with its plan to advance projects in China. Other dividend changes forecast for the week include Sturm, Ruger (NYSE:RGR) to $0.15 from $0.11, Dick's Sporting Goods (NYSE:DKS) to $0.325 from $0.275, Coca-Cola (NYSE:KO) to $0.41 from $0.40, Walmart (WMT) to $0.54 from $0.53, Analog Devices (NASDAQ:ADI) to $0.59 from $0.54, Domino's Pizza (DPZ) to $0.72 from $0.65, Cinemark (NYSE:CNK) to $0.35 from $0.34, Danaher (NYSE:DHR) to $0.195 from $0.17, Vulcan Materials (NYSE:VMC) to $0.34 from $0.31 and Texas Roadhosue (NASDAQ:TXRH) to $0.35 from $0.30.
Go deeper: Read the latest dividend analysis.

M&A tidbits: The tender offer on the Eli Lilly (NYSE:LLY)-Dermira (NASDAQ:DERM) deal expires on February 18. Shareholders with Ingersoll-Rand (NYSE:IR) and Gardner Denver (NYSE:GDI) vote on the planned merger on February 21.

Analyst/investor meetings: Radware (NASDAQ:RDWR) says its executive team will provide an update on the company's business and outlook at a meeting with investors on February 20. The event arrives with shares of Radware down around 10% since a disappointing Q4 earnings report. Other companies with investor/analyst meetings scheduled during the week include Cerence (NASDAQ:CRNC) On February 18, T. Rowe Price (NASDAQ:TROW) on February 19, Agenus (NASDAQ:AGEN) on February 20 and Mattel (NASDAQ:MAT) on February 21.

Data watch: Credit card writeoff reports are due in next week from American Express (NYSE:AXP), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Capital One (NYSE:COF), Discover Financial (NYSE:DFS), JPMorgan (NYSE:JPM) and Synchrony Financial (NYSE:SYF). Meanwhile, fresh appliance shipments data from AHAM could perk up Whirlpool (NYSE:WHR) and an update from Pulp & Paper Week on containerboard pricing could jolt International Paper (NYSE:IP), Packaging Corp of America (NYSE:PKG), Berry Global Group (NYSE:BERY), WestRock (NYSE:WRK), Greif (NYSE:GEF), Sealed Air (NYSE:SEE) and Cascades (OTCPK:CADNF).

Walmart earnings preview: Walmart is due to spill earnings on February 18. Analysts expect the retail giant to report revenue of $142.6B and EPS of $1.44. A shorter holiday period and a tough year-ago comparable in the toys and baby categories could make it tough for Walmart's comp to dazzle. The consensus analyst mark is for comparable sales to be up 2.4% for Walmart U.S. and 1.2% for Sam's Club. By comparison, Target (NYSE:TGT) reported comparable sales growth of 1.4% for the two-month holiday period in an update that set expectations lower for Walmart as well. It will be a full day for Walmart shareholders as the company is also hosting an investor community meeting on February 18 that will feature plenty of Q&A. Shares of Walmart are down 2.52% YTD.

New York Toy Fair: The annual toy fair is called the "can't-miss" event for the $27B U.S. toy market. While new product reveals and toy awards are a big part of the gathering, industry giants Hasbro (NASDAQ:HAS) and Mattel (MAT) also will take care of some financial housekeeping. Hasbro (HAS) plans an investor update on February 21 with senior management including CEO Brian Goldner, CFO Deborah Thomas and COO John Frascotti. Mattel (MAT) is also hosting securities analysts for a strategic business overview, followed by a tour of the company's gallery. Over the last 52 weeks, Hasbro shares are up 8.2% and Mattel shares are down 15%.

Airlines: The reality of air travel being cut off to Mainland China is expected to lead to some earnings revisions as early as next week. Delta Air Lines (NYSE:DAL), American Airlines Group (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) have all suspended travel from the U.S. to China through sometime in the last week of April. Other global carriers with cancellations through at least the end of February include Nippon, Qantas (OTCPK:QUBSF), Air New Zealand (OTCPK:ANZFF), Air France (OTCPK:AFLYY), Swiss Air, Virgin Atlantic, Finnair (OTC:FNNNF), KLM Royal Dutch Airlines (OTCPK:KLMR), Lufthansa (OTCQX:DLAKF) and Air Canada (OTCQX:ACDVF).

CAGNY Conference: The Consumer Analyst Group of New York hosts one of the largest retail conferences of the year on February 17-20 in Boca Raton. Presenting companies include General Mills (NYSE:GIS), Conagra Brands (NYSE:CAG) Unilever (NYSE:UN), Mondelez International (NASDAQ:MDLZ), Sysco (NYSE:SYY), Ingredion (NYSE:INGR) and International Flavors & Fragrances on February 18. Kellogg (NYSE:K), Philip Morris International (NYSE:PM), J.M. Smucker (NYSE:SJM), Spectrum Brands (NYSE:SPB), Tyson Foods (NYSE:TSN), Altria (NYSE:MO), Valvoline (NYSE:VVV) and Freshpet (NASDAQ:FRPT) on the docket for February 19. TreeHouse Foods (NYSE:THS), Procter & Gamble (NYSE:PG), Herbalife (HLF), Church & Dwight (NYSE:CHD), Imperial Brands (OTCQX:IMBBY), PepsiCo (NASDAQ:PEP), Kerry Group (OTCPK:KRYAY) and Newell Brands (NASDAQ:NWL) will present on February 20. The final day of the conference will see Colgate-Palmolive (NYSE:CL), L'Oreal (OTCPK:LRLCF), Coca-Cola (KO) and Nestle (OTCPK:NSRGY) on the mike.

FDA watch: Karyopharm Therapeutics (NASDAQ:KPTI) expects to hear if it will be granted accelerated approval for Xpovio. BioMarin Pharmaceuticals (NASDAQ:BMRN) is waiting to hear if the company's filing for accelerated approval for hemophilia treatment ValRox is accepted for FDA review.

Short report: The stocks with the highest stock borrow fees heading into next week are Inmode (NASDAQ:INMD), Fuelcell Energy (NASDAQ:FCEL), GTT Communications (NYSE:GTT), Aurora Cannabis (NYSE:ACB), Revolve Group (NYSE:RVLV), Peloton Interactive (NASDAQ:PTON), Canopy Growth (NYSE:CGC), Cel-Sci (NYSEMKT:CVM), AMC Entertainment (NYSE:AMC) and Tilray (NASDAQ:TLRY).

Macau: Macau casinos are aiming to reopen their floors on February 20, although the level of traffic could be minimal. Whether the casinos and hotels are open or not, the flow of coronavirus news will be crucial for short-term sentiment on Wynn Macau (OTCPK:WYNMF,OTCPK:WYNMY, Wynn Resorts (NASDAQ:WYNN), Sands China (OTCPK:SCHYY, OTCPK:SCHYF), Las Vegas Sands (NYSE:LVS), MGM China (OTCPK:MCHVF, OTCPK:MCHVY), MGM Resorts (NYSE:MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF, OTCPK:SJMHY), Melco Resorts & Entertainment (NASDAQ:MLCO) and Studio City International (NYSE:MSC).

Barclays Industrial Select Conference: Virgin Galactic CEO George Whitesides (NYSE:SPCE) and General Dynamics (NYSE:GD) CFO Jason Aiken will give two of the more intriguing presentations at the industrials conference set for Miami, Florida on February 20. Shares of Virgin Galactic are up almost 200% over the last 90 days, while General Dynamics has hammered out a 7.2% return over the last 52 weeks. Other companies due to appear include Johnson Controls International (NYSE:JCI), Fortress Transportation (NYSE:FTAI), Dover Corporation (NYSE:DOV), Air Products and Chemicals (NYSE:APD), CSX Corp. (NASDAQ:CSX), Gates Industrial (NYSE:GTES), United Airlines (UAL), MasTec (NYSE:MTZ), Jacobs Engineering (NYSE:J), Aptiv (NYSE:APTV), Parker- Hannifin (NYSE:PH), Fortive (NYSE:FTV), Honeywell (NYSE:HON), Allegion (NYSE:ALLE), Union Pacific (NYSE:UNP), JELD-WEN (NYSE:JELD), Lincoln Electric (NASDAQ:LECO) and J.B. Hunt Transport Services (NASDAQ:JBHT).

Barron's mentions: The cover story tries to envision Berkshire Hathaway (BRK.A, BRK.B) without Warren Buffett. Some investors think the conglomerate could be broken up to unlock value or use some of its $128B sitting in cash to pay dividends or buy back shares. Berkshire is also tapped to take greater steps to improve the efficiency and profit margins in some of its operating businesses, which are underperforming peers. In a separate piece, the advice from the publication is to avoid the natural gas sector with the exception of Cabot Oil & Gas (NYSE:COG) and Cheniere Energy (NYSEMKT:LNG). Finally, with signs of excess easy to find in the market, the question is raised as to why Bitcoin (BTC-USD) won't return to +$20K as the crypto story gets rebooted.

Sources: CNBC, Reuters, Bloomberg, Credit Suisse, EDGAR, S3 Analytics

This article was written by

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