Wall Street Breakfast: The Week Ahead


Economic reports in the week ahead

Investors will be talking inflation again next week with the latest read on consumer prices due to arrive on June 10. Economists anticipate that headline inflation will be 8.2% Y/Y for May vs. 8.3% in April and see core CPI after backing out food and energy costs trickling down to 5.9% from 6.2%. Some analysts are holding open the possibility of a relief rally if there is no upside CPI surprise. “Investors are in a more constructive place, and that can carry through if CPI is anywhere near consensus or better,” noted National Securities Chief Strategist Art Hogan. Notable companies due to report earnings next week include Campbell Soup (CPB), Nio (NYSE:NIO), and DocuSign (DOCU). Investor events are on taps for AMD (NASDAQ:AMD), Wendy’s (WEN), and MongoDB (NASDAQ:MDB). In the tech sector, Apple’s (AAPL) developer conference will be in the spotlight and Facebook parent Meta Platforms (FB) will change its ticker from to META to better reflect its new focus.

Earnings spotlight: Monday, June 6 – Coupa Software (COUP).

Earnings spotlight: Tuesday, June 7 – United Natural Foods (UNFI), J.M. Smucker (SJM), Academy Sports + Outdoors (ASO), Dave & Buster’s Entertainment (PLAY), and Guidewire Software (GWRE).

Earnings spotlight: Wednesday, June 8 – Thor Industries (THO), Campbell Soup (CPB), Bausch + Lomb Corporation (BLCO), and Five Below (FIVE).

Earnings spotlight: Thursday, June 9 – Nio (NIO), Signet Jewelers (SIG), DocuSign (DOCU), Rent the Runway (RENT), and Stitch Fix (SFIX).

IPO watch: No new IPOs are expected to start trading. The quiet periods ends on Hanover (NASDAQ:HNVR) on June 6 and ProFrac (PFHC) on June 7 to free up analysts to post ratings. The IPO lockup period for a block of shares of Chicago Atlantic (NASDAQ:REFI), Cingulate (CING) and HashiCorp (HCP) also expires during the week.

Dividend watch: It is a light week of anticipated dividend boosts with the earnings season winding down. Dividend payout boosts are anticipated from UnitedHealth (UNH) to $1.65 from $1.45, Caterpillar (CAT) to $1.20 from $1.11, Essential Properties () to $0.27 from $0.26, and Clorox (NYSE:CLX) to $1.20 from $1.16. Credit Suisse came out this week with an intriguing list of its favorite dividend aristocrats for investors to chew on. The firm’s list of Outperform-rated U.S. stocks that offer investors healthy dividend yields backed by a history of growing dividends per share includes IBM (IBM), Chevron (CVX), Coca-Cola (KO), Emerson Electric (EMR), Stanley Black Decker (SWK), Nextera Energy (NEE), Colgate-Palmolive (CL), Sysco (SYY), McDonald’s (MCD) and Caterpillar (CAT).

Corporate events: Pear Therapeutics (PEAR) will host the company’s first investor day event in its history on June 6. Hyzon Motors (NASDAQ:HYZN) will host an Investor Day event on June 7 that includes a strategy update and tour of the Groningen, Netherlands facilities. MongoDB World 2022 is also scheduled for June 7 with keynote presentations due from MongoDB’s (MDB) top execs. Spotify Technology S.A. (SPOT) will host an Investor Day event on June 8 to highlight the company’s current roadmap and future growth opportunities. Investor day events are scheduled on June 9 for AMD (AMD), Verint Systems (NASDAQ:VRNT), Wendy’s (WEN), PPL Corporation (PPL), Nutrien (NTR), and DigitalOcean Holdings (DOCN). Spirit Airlines (SAVE) shareholders will vote on the proposed merger with Frontier Group (ULCC) on June 10. Read more about the events next week that could impact shares prices in Seeking Alpha’s Catalyst Watch.

Conference schedule: The conference schedule heats up with the earnings season grinding to a halt. Nareit’s REITweek 2022 Investor Conference might be the headliner with STORE Capital (NYSE:STOR), Macerich (MAC), Public Storage (PSA), and Tanger Factory Outlet Centers (SKT) some of the notables due to appear virtually. Also watch for strategy and guidance updates to pour out of the Goldman Sachs Travel and Leisure Conference, the William Blair Growth Stock Conference, the Baird Global Consumer, Technology and Services Conference, the KBW US Regional Banking Growth Conference, the Goldman Sachs Global Semiconductor Virtual Conference, the Needham Virtual Automotive Technology Conference, the Bank of America 2022 Global Technology Conference, the Stifel 2022 Cross Sector Insight Conference, and the Jefferies Healthcare Conference.

Toy story: Hasbro (NASDAQ:HAS) will hold its annual meeting on June 8. Activist investor Alta Fox is pushing Hasbro to sell a profitable division and wants board representation. The firm has also has criticized how the company allocates its capital. Proxy firm ISS has recommended that shareholders withhold votes from Ted Philip, who has served on Hasbro’s board for 20 years, while Glass Lewis backed all of Hasbro’s board nominees. In front of the meeting, Hasbro has stated that capital allocation, including strategic investments and returning excess cash to shareholders is a priority as the company also stays on a path to grow and pay down debt. Shares of Hasbro (HAS) are down 12% on a year-to-date basis.

Apple WWDC preview: Apple (AAPL) will hold its Worlwide Developers Conference to expectations that updates to iOS/iPad OS, macOS, tvOS, and watchOS, and other software reveals will be made. Ahead of WWDC, the company teased an update to the Swift open-source programming language. Analysts think there is a chance of a “one more thing” hardware surprise, as well as a potential announcement of a NFL Sunday Ticket contract win. Looking ahead, Wedbush Securities analyst Dan Ives believes the tech giant is gearing up to bid on a number of upcoming sports packages besides the NFL that are coming up for contract/renewals in future years. Also of high interest, Morgan Stanley said there is the potential for Apple to tease its entrance into the mixed-reality headset market. What does WWDC mean for Apple shares? Over the last 10 years Apple has underperformed the S&P 500 by a median of 100 bps in the week after the event, but outperformed the S&P by 70 bps in the one month following the event.

Stock split: The four-for-one stock split for DexCom (DXCM) will become effective on June 10. The stock split will increase the number of authorized shares of common stock from 200,000,000 to 800,000,000.

Annual meetings: Companies with annual meetings set for next week include Shopify (NYSE:SHOP), Penn National Gaming (PENN), eBay (EBAY), Target (TGT), TJX Companies (TJX), CarGurus (CARG), Best Buy (BBY), and Urban Outfitters (URBN). Shareholders with Shopify (SHOP) will vote on a proposal to furnish CEO Tobias Lütke with extra voting rights to preserve his voting power. Meanwhile, Hasbro (HAS) is fighting off a activist investor in a boardroom battle.

Box office preview: Paramount Global’s (NASDAQ:PARA) Top Gun: Maverick is forecast to bring in as much as $60M at the box office in its second weekend. The film has one more weekend of limited competition before Universal’s (CMCSA) Jurassic World Dominion opens on June 10. The Jurassic installment already has has the 4th biggest open ever in Korea and has brought in more than $45M across 15 international markets.

Barron’s mentions: The cover story delves into the boom in weddings in the U.S. and if that is an indicator that the U.S. fertility rate has bottomed out after a 12-year decline. Some of the stock mentioned as potential beneficiaries from the surge in new couples are AvalonBay Communities (AVB), Equity Residential (EQR), and Target (TGT). Eaton (ETN) is also singled out this week by the publication as a stock that could jump 30% as the company takes advantage of red-hot demand for its products in the electrical segment. The shift to electrical vehicles is seen keeping demand buzzing for an extended period of time. Shares of Eaton are noted to now trade at 17.5X forward earnings, which is in line with the broader market but marks a discount to rivals such as Quanta Services (PWR) and ABB (ABB).

Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital



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Post Author: Adam Jacob

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