|Wall Street Breakfast: The Week Ahead|
Nov. 07, 2021 8:14 AM ET DIS, U, COIN, ACB, NVDA, AMD, RIVN, USFD, TME, AMC, DDD, SPCE, PYPL, CAH, SYY, NIO, WYNN, ECOM, PFGC, WEN, FVRR, WEBR, AFRM, OPEN, BYND, BABA, LI, CPNG, YETI, PDD, AZN, SPB, CINT, EXFY, TCBX, WEAV, BLZE, TSLA, UBER, CAR, GTLB, AVDX, IHS, LUCD, HCTI, XRTX, FNA, INKT, GLBE, IPW, FLGC, RGLD, ETD, HPQ, GFF, MSI, ROP, EPC, ATO, SR, WSC, MCHP, AVGO, EFX, SWI, CSX, R, LMT, RTX, CARR, DAL, AAL, TSP, BBWI, LOW, WMT, TGT, SBUX, AMZN, NGAB, AUR, ORCL, CDK, ADA-USD, MARA, RIOT, HUT, BLDE, Y 1 Comment1 Like
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Economic reports in the week ahead
The rush of earnings reports slows down just a bit in the week ahead, but still sees big names like Disney (NYSE: DIS), Unity Software (NYSE: U), Coinbase Global (NASDAQ: COIN) and Aurora Cannabis (NASDAQ: ACB) step into the confessional. There are also big events for Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD) that could perk up the bulls once again, while Rivian Automotive ( RIVN) goes public at a valuation that is expected to top $60B. Fedspeak will also be watched closely after last week's Federal Reserve announcement that it will wind down its bond buying efforts. Federal Reserve Chairman Jerome Powell, Boston Federal Reserve Bank President Kenneth Montgomery, Philadelphia Federal Reserve Bank President Patrick Harker and Chicago Federal Reserve Bank President Charles Evans are all on the schedule to give talks.
Earnings spotlight: Monday, November 8: US Foods (NYSE: USFD), Tencent Music (NYSE: TME), AMC Entertainment (NYSE: AMC), 3D Systems (NYSE: DDD), Virgin Galactic (NYSE: SPCE) and PayPal (NASDAQ: PYPL).
Earnings spotlight: Tuesday, November 9: Cardinal Health (NYSE: CAH), Sysco (NYSE: SYY), Nio (NYSE: NIO), Coinbase Global ( COIN), Wynn Resorts (NASDAQ: WYNN) and ChannelAdvisor (NYSE: ECOM).
Earnings spotlight: Wednesday, November 10: Performance Food Group (NYSE: PFGC), Wendy's (NASDAQ: WEN), Fiverr International (NYSE: FVRR), Weber (NYSE: WEBR), Disney ( DIS), Affirm Holdings (NASDAQ: AFRM), Opendoor Technologies (NASDAQ: OPEN) and Beyond Meat (NASDAQ: BYND).
Earnings spotlight: Thursday, November 11: Alibaba (NYSE: BABA), Li Auto (NASDAQ: LI), Coupang (NYSE: CPNG), Yeti (NYSE: YETI) and Pinduoduo (NASDAQ: PDD).
Earnings spotlight: Friday, November 12: AstraZeneca (NASDAQ: AZN) and Spectrum Brands (NYSE: SPB).
IPO watch: Rivian Automotive ( RIVN) (see preview below), CI&T ( CINT), Expensify ( EXFY) and Third Coast Bancshares ( TCBX) are expected to start trading on November 10, while Weave Communications ( WEAV) and Backblaze (NASDAQ: BLZE) will debut on November 11. It is also round two for Hertz Global Holdings ( OTCPK:HTZZ), with the rental car company having a re-IPO under the old ticker HTZ. Hertz plans to offer 37.1M shares at $25 to $29 each. At the midpoint of the indicated range, Hertz would have a fully diluted market value of $13.9B. As part of the offering, Hertz intends to repurchase between $250M to $500M worth of shares from the underwriters. Knighthead Capital and Certares Management will still own about 37% of Hertz after all the smoke clears. The Hertz offering is expected to attract quite a bit of attention following the high-profile agreements with Tesla (NASDAQ: TSLA) and Uber Technologies (NYSE: UBER), as well as the meme rally explosion of shares of Avis Budget Group (NASDAQ: CAR).
IPO quiet period expirations: Analysts can start posting ratings on Gitlab (NASDAQ: GTLB), AvidXchange (NASDAQ: AVDX), Ihs Holding (NYSE: IHS), Lucid Diagnostics (NASDAQ: LUCD), Healthcare Triangle (NASDAQ: HCTI) and Xortx Therapeutics (NASDAQ: XRTX) on November 8. The quiet periods expire on Paragon 28 (NYSE: FNA) and MiNK Therapeutics (NASDAQ: INKT) on November 9.
IPO lockup period expirations: The IPO lockup periods expire on Global-e Online (NASDAQ: GLBE), IPower (NASDAQ: IPW), SimilarWeb (SMWB US)and Flora Growth (NASDAQ: FLGC) on November 8. Of the last 20 IPO lockup periods tracked by Seeking Alpha, 16 of the stocks saw a share price decline the day before the lockup period ended. Only 8 stocks saw a decline on the same day as the lockup expiration, but then 12 of the stocks saw a decline on the day after the expiration. The general trend was for more selling pressure in front of the expirations.
Rivian Automotive IPO preview: The electric vehicle sector will have another stock generating buzz with Rivian Automotive ( RIVN) planning to raise $9.7B in its initial public offering by selling 135M shares at $72 to $74 per share. Including stock options and restricted units, the implied valuation for Rivian is over $62B, which is above the market caps of Honda Motors and Ferrari. In the filing, Rivian ( RIVN) says its began making customer deliveries of the R1T pickup truck in September and produced 180 R1Ts and delivered 156 R1Ts by the end of October. Most of the deliveries so far have been to Rivian employees, but the company expects to ramp deliveries to third-party customers as the production rate accelerates. Rivian plans to launch and commence customer deliveries for the R1S SUV in December following the completion of ongoing vehicle validation and testing. By the end of the year, the electric vehicle upstart intends to produce approximately 1,200 R1Ts and 25 R1Ss and deliver approximately 1,000 R1Ts and 15 R1Ss. Rivian ( RIVN) also highlighted its ecosystem in advance of the IPO, which includes vehicle technology, the Rivian Cloud, product development, analytics, accessories and services. The ecosystem is described as competitive in comparison to peers. Important to the upside case, Rivian ( RIVN) estimates its total addressable marker at $9T and its serviceable available market at $1T.
Projected dividend increases: Companies forecast to boost their quarterly dividend payouts next week include Royal Gold (NASDAQ: RGLD) to $0.35 from $0.30, Ethan Allen (NYSE: ETD) to $0.29 from $0.25, HP Inc (NYSE: HPQ) to $0.219 from $0.194, Griffon Corporation (NYSE: GFF) to $0.09 from $0.08, Motorola Solutions (NYSE: MSI) to $0.79 from $0.71, Roper Technologies (NYSE: ROP) to $0.6125 from $0.5625, Edgewell Personal Care (NYSE: EPC) to $0.16 from $0.15, Atmos Energy (NYSE: ATO) to $0.665 from $0.625 and Spire Inc. (NYSE: SR) to $0.69 from $0.65.
Key corporate events to watch: AMD ( AMD) hosts its Accelerated Data Center Premiere event on November 8 to showcase the company’s upcoming innovations with AMD EPYC processors and AMD Instinct accelerators. Analysts think AMD could provide more color on data center progress with prospects for new server and accelerator card launches. On the same day, WillScot Mobile Mini Holdings Corp. (NASDAQ: WSC) hosts its first investor day to provide an update on the company’s strategic initiatives and Microchip Technology Incorporated (NASDAQ: MCHP) has a similar event. Broadcom Inc. (NASDAQ: AVGO) hosts its Broadcom Software Investor Day on November 9, while Equifax (NYSE: EFX) and SolarWinds (NYSE: SWI) have investor events set for November 10. In a high-profile event for the media world, Disney ( DIS) hosts its first Disney+ Day on November 11. Look for new content releases across the Disney, Pixar, Marvel, Star Wars, Net Geo, and Star brands to be discussed.
Eyes on industrials: The Baird Industrials Conference looks like the biggest conference of the week. The three-day event kicks off on November 9 and features presentations from a long of list of companies that includes (NASDAQ: CSX), Ryder (NYSE: R), Lockheed Martin (NYSE: LMT), Raytheon (NYSE: RTX) and Carrier Global (NYSE: CARR). Notably, Delta Air Lines (NYSE: DAL) and American Air Lines (NASDAQ: AAL) have updated guidance during their presentations in past years. Keep an eye on TuSimple's (NASDAQ: TSP) fireside chat as a potential share price mover.
Holiday shopping preview: Consumer spending trends remain strong across income cohorts, according to credit and debit card data tracked by Bank of America. With the holiday shopping season having officially started on November 1, the firm is ready to name its top retail picks. The favorite specialty retailer stock is Bath & Body Works (NYSE: BBWI), which is called an undervalued growth compounder that is likely to see strong holiday demand as teacher gift buying resumes. The top hardlines stock at BofA is Lowe’s (NYSE: LOW) with it seen having more negotiating power with suppliers and transportation partners compared to smaller scale home improvement retailers. The discount retail standouts are Walmart (NYSE: WMT) and Target (NYSE: TGT) due to their strong inventory positions and more favorable port access, long-term container shipping agreements and chartered vessel capacity. In the restaurant sector, Starbucks (NASDAQ: SBUX) is the top selection with higher gift card sales expected to be seen this year around the holidays. Finally, BofA calls Amazon (NASDAQ: AMZN) its favorite Internet retail stock, with the retail giant's investments in fulfillment and shipping expected to mitigate supply chain bottlenecks.
SPAC watch: Self-driving truck company Embark Trucks could start trading next week after shareholders with Northern Genesis Acquisition Corp. II (NYSE: NGAB) vote on the SPAC deal. The self-driving trucking company was founded in 2016 with a stated mission of making highways safer and the transport of goods more efficient. Partnership deals with Ryder and Luminar are already in place, although the first driverless pilot program is not scheduled until 2023. Meanwhile, Self-driving technology player Aurora Innovation (NASDAQ: AUR) will begin its second week of trading after its deal closed.
Annual meetings: Companies holding their annual meeting next week include Lam Research (LCRX) on November 8, Oracle (NYSE: ORCL) on November 10, CDK Global (NASDAQ: CDK) on November 11 and Aurora Cannabis ( ACB) on November 12. Oracle's meeting has the most drama around it. Proxy firm Glass Lewis recommended that investors vote against the election of CEO Safra Catz, Board Director Vishal Sikka and members of the compensation committee and is against the company's executive compensation plan.
Barron's mentions: Cryptocurrencies make the cover story this week as advice is doled out on how to dabble safely into the new investing class. Polkadot and Cardano ( ADA-USD) are singled out, as are mining companies Marathon Digital Holdings (NASDAQ: MARA), Riot Blockchain (NASDAQ: RIOT) and Hut 8 Mining (NASDAQ: HUT). Also this week, Blade Air Mobility (NASDAQ: BLDE) is a recommended as a less risky way to invest in the eVTOL future. Blade is getting close to profitability even as it grows and is well liked on Wall Street. In the financials sector, Alleghany Corp. (NYSE: Y) is called out as attractive for using a similar strategy as Berkshire Hathaway of using profit from one business to buy even more companies. The stock is noted to trade at just a small premium to the current book value.
Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital