|Wall Street Breakfast: The Week Ahead|
May 08, 2022 7:20 AM ET
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Economic reports in the week ahead
After a large downturn in the stock market, investors will be tested once again next week with Federal Reserve speakers out on the circuit again and the latest consumer price report due to drop to give inflation watchers more to chew on. The consumer price report is expected to show a 0.2% month-over-month increase in CPI and decrease in the year-over-year inflation rate to 8.2% from 8.5%. Food and auto prices are seen running extra hot, while some deceleration is seen with lodging prices, air fares, and transportation services pricing. The inflation report arrives with the 10-year Treasury yield having just pushed through the 3% threshold for the first time since late in 2018 and ending the week at 3.13%. The earnings calendar features trips by 3D Systems (NYSE: DDD), Coinbase Global (NASDAQ: COIN), and Disney ( DIS) into the earnings confessional. In the electric vehicle sector, a major auto summit will include a talk by Tesla ( TSLA) CEO Elon Musk and Rivian Automotive (NASDAQ: RIVN) will roll past the IPO lockup period for early investors.
Earnings spotlight: Monday, May 9 - 3D Systems, Duke Energy ( DUK), Lordstown Motors ( RIDE), AMC Entertainment (AMC, Tyson Foods ( TSN), Blue Apron ( APRN), Coty (NYSE: COTY).
Earnings spotlight: Tuesday, May 10 - Occidental Petroleum ( OXY), Coinbase Global ( COIN), Hyatt Hotels ( H), Electronic Arts ( EA), Peloton Interactive (NASDAQ: PTON),
Earnings spotlight: Wednesday, May 11 - Disney, Rivian Automotive, Coupang (NYSE: CPNG), Wendy's ( WEN), Yeti Holdings ( YETI).
Earnings spotlight: Thursday, May 12 - Brookfield Asset Management ( BAM), US Foods ( USFD), Aurora Cannabis (NASDAQ: ACB), and Six Flags Entertainment ( SIX).
Earnings spotlight: Friday, May 13 - Honda Motor ( HMC).
IPO watch: The biggest wildcard in the IPO market in the week ahead is the lockup expiration for Rivian Automotive ( RIVN). Close to 800M shares will be freed up to be sold by investors if they desire. That tally includes 100M shares of Rivian held by Ford ( F) and 160M shares by Amazon ( AMZN). The two companies own more than 28% of Rivian together and the fair market value of the electric vehicle maker is reported quarterly as part of their total profit or loss. In some cases, stocks rolling off a big IPO lockup rally over the following week with a major overhang removed. Other IPO lockup expirations of note cover certain blocks of shares of Hertz Global (NASDAQ: HTZ), Expensify ( EXFY), CI&T Inc ( CINT), Third Coast ( TCBX), Society Pass ( SOPA), Weave ( WEAV), Backblaze (NASDAQ: BLZE), Lulu’s Fashion (NASDAQ: LVLU), Vaxxinity (NASDAQ: VAXX), Winc ( WBEV), Kidpik ( PIK) and Tivic Health Systems ( TIVC). Meanwhile, analyst quiet periods expire on Excelerate Energy ( EE), Applied Blockchain ( APLD), and Genius Group ( GNS).
Corporate events: Western Digital Corp. ( WDC) will host its 2022 Investor Day on May 9 during which execs plan to discuss the company’s long-term strategy. On May 10, Dish Network Corporation (NASDAQ: DISH) will hold an analyst day event and Corvus Pharmaceuticals ( CRVS) is set to hold a R&D Symposium. WestRock Company ( WRK) and Fastly ( FSLY) have investor day events scheduled for May 12. Read more about the events next week that could impact shares prices in Seeking Alpha's Catalyst Watch.
Conference schedule: The conference schedule is headlined by the Bank of America Global Healthcare Conference 2022including appearance by Recursion Pharmaceuticals ( RXRX), Esperion Therapeutics ( ESPR), Adaptive Biotechnologies Corporation (NASDAQ: ADPT), Inari Medical ( NARI), and Basic Energy Services ( OTC:BASX) to name just a few. Other conferences of note include the Goldman Sachs Industrials and Materials Conference, Oppenheimer's 7th Annual Emerging Growth Conference, Citi’s 2022 Global Energy, Utilities, and Climate Technology Conference, the Sidoti Virtual Micro Cap Conference, and the Goldman Sachs Seventh Annual Leveraged Finance and Credit Conference.
Spotlight on the electric vehicle sector: The rough ride for electric vehicle stocks in 2022 has not showed any signs of easing, even with a few bright Q1 earnings report turned in over the last two weeks. The spotlight could move back to the long-term potential of electrification with the FT Future of the Car Summit next week featuring Mercedes-Benz ( OTCPK:DDAIF) Ola Källenius, Waymo ( GOOG) Co-CEO Tekedra Mawakana, Tesla ( TSLA) CEO Elon Musk, as well as appearances by the chiefs of Lucid Group (NASDAQ: LCID), Aurora Innovation ( AUR), and Polestar ( GGPI). TuSimple (NASDAQ: TSP) also has an Investor Day event scheduled for next week in Tucson, Arizona to talk up ita autonomous vehicle technology, as well as update on near-term milestones and the path to commercialization. The EV events will take place with share prices across the sector in reverse with names like Arrival ( ARVL) -73% YTD, Cenntro Electric ( CENN) -68%, Sono Group ( SEV) -59%, Nio ( NIO) -51%, Lordstown Motors ( RIDE) -40%, Fisker ( FSR) -37%, and Nikola ( NKLA) -34% deep in the red. EV juggernaut Tesla trades about 30% below its all-time high.
Peloton Interactive preview: Peloton Interactive ( PTON) will report earnings on May 10 with analysts expecting revenue of $970M and EPS of -$0.94 to be reported. UBS tips that the subscriber growth guide for FQ4 will be a major focus when PTON reports with the consensus mark currently at +30% Y/Y. Management's update on the new pricing strategy, customer acquisition costs, and the churn rates will also be key. Analyst Arpine Kocharyan said a big name like Apple ( AAPL), Amazon ( AMZN), or Nike ( NKE) acquiring PTON is interesting to consider, but called it an unlikely scenario even with the consumer data angle intriguing.
M&A watch: The walk date on the Sanderson Farms (NASDAQ: SAFM) sale to Continental Grain and Cargill is on May 9. The go-shop period expires on May 12 for the Elliott and Brookfield deal to take Nielsen Holdings ( NLSN) public.
Annual meetings of note: Under Armour (NYSE: UAA) holds its annual meeting on May 11 just days after shares crumbled when the athletic apparel company disappointed with its earnings report. Kohl's (NYSE: KSS) also holds an annual meeting with activists investors pushing for a board seat. On May 12, Southwest Gas Holdings ( SWX) holds its annual report with Carl Icahn still pushing to land as many as four seats on the board.
Stock splits: The 2-for-1 stock split on Canadian Imperial Bank of Commerce ( CM) becomes effective on May 13.
Barron's mentions: The publication convened a transportation roundtable to explore the outlook for automakers and the technologies shaping the industry’s future. Tesla ( TSLA), Uber Technologies ( UBER), and Grab Holdings ( GRAB) are the top electrification picks of New Street Research's Pierre Ferragu, while Gamco Investors' A. Carolina Jolly says underappreciated plays on the logistics of housing and servicing vehicles are Genuine Parts ( GPC), O'Reilly Automotive ( ORLY), Monro (NASDAQ: MNRO), Universal Technical Institute ( UTI), Copart ( CPRT), and Snap-on ( SNAP). Those stocks are also considered beneficiaries of the push toward autonomous technology. General Motors ( GM) was not totally ignored in all the focus on the automobile industry. GM is called a cheap stock that is not getting credit for the strength of its core automotive business and is seen as well positioned in electric vehicles and autonomous vehicle technology.
Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital