Adobe Rock-Solid Ahead of Tuesday’s Confessional

Nasdaq-100 component Adobe Inc. (ADBE) reports Q3 2021 earnings after Tuesday’s closing bell, with analysts looking for a profit of $3.02 per-share on $3.9 billion in revenue. If met, earnings-per-share (EPS) will mark an 18% profit increase compared to the same quarter last year. The stock rose nearly 3% after beating Q2 estimates and raising Q3 guidance in June and has added another 16% since that time.

Leader in Digital Transformation

The Silicon Valley blue chip has been an outstanding performer in the last decade, rising more than twenty-fold, and is currently trading near an all-time high. The company is perfectly positioned to benefit from broad-based digital transformation, with a product catalog described by Mizuho analyst Gregg Moskowitz as a “highly comprehensive end-to-end offering that differentiates it from competitors and should enable it to drive more holistic sales across its clouds”.

Moskowitz raised the firm’s target to $695 and reiterated a ‘Buy’ rating on Friday, noting that, “Adobe is slated to report its F3Q (August) earnings results after the close on September 21. Our ADBE checks were once again favorable, and we expect the company to report healthy upside to our & Street estimates. In our view, ADBE’s expansive portfolio of software solutions has made it the gold standard in content creation, consumption, and collaboration”.

Wall Street and Technical Outlook

Wall Street consensus remains pristine despite Adobe’s 30%+ year-to-date return, with a ‘Buy’ rating fueled by 20 ‘Buy’, 2 ‘Overweight’, 4 ‘Hold’, and 1 ‘Underweight’ recommendation. No analysts are recommending that shareholders close positions at this time. Price targets currently range from a low of $550 to a Street-high $750 while the stock closed Friday’s session on top of the median $658 target. This placement suggests that stronger-than expected metrics will be needed to generate higher prices.

Adobe completed a breakout above 2018 resistance in November 2019 and tested new support successfully during 2020’s pandemic decline. The subsequent uptick mounted the February peak at 378 in June, generating a strong uptrend that stalled at 537 in September. The stock mounted that resistance level in June 2021, and has added points at a rapid pace since that time. Even so, long-term price projections show a cluster of hidden resistance just above 700, lowering reward and raising risk potential for new long positions.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

U.S. Tech Companies Disappointed with DACA Ruling, Urge Congress to Act

U.S. District Judge Andrew Hanen on Friday sided with a group of states suing to end the Deferred Action for Childhood Arrivals (DACA) program, arguing that it was illegally created by former President Barack Obama in 2012.

“We have long argued in support of this program, filing an amicus brief in this case, and we are very disappointed by the decision (from the judge)”, Google spokesperson Jose Castaneda said.

“Dreamers and immigrants make the United States — and Twitter — better”, a spokesperson from social media platform Twitter said in an emailed statement.

Twitter, Google, Microsoft and Photoshop maker Adobe urged the U.S. Congress to come together to protect Dreamers, with Google saying they wanted DACA to be “cemented” into law.

Microsoft President Brad Smith said that the “disappointing” ruling created “uncertainty yet again for Dreamers.”

The judge ruled on Friday that the program violated the Administrative Procedure Act (APA) when it was created but said that since there were so many people currently enrolled in the program – nearly 650,000 – his ruling would be temporarily stayed for their cases and their renewal applications.

Biden, who was vice president when Obama created the program, has said he wants to create a permanent pathway to citizenship for DACA recipients, known as “Dreamers.”

On Saturday, Biden vowed to preserve the program that protects from deportation hundreds of thousands of immigrants brought to the U.S. as children, promising to appeal the judge’s ruling invalidating it and urging Congress to provide a path to citizenship.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Kanishka Singh in Bengaluru, Editing by Nick Zieminski)

Adobe Shares Hit New Record High After Earnings Beat Estimates; Analysts Raise Target Price

Adobe shares scaled its fresh all-time high on Friday after the U.S. multinational computer software company reported better-than-expected earnings and revenue in the fiscal second quarter, prompting several analysts to raise their one-year price targets.

The San Jose, California-based software company reported quarterly revenue of $3.84 billion in its second quarter of the fiscal year 2021, which represents 23% year-over-year growth. That was higher than the Wall Street consensus estimates of $3.73 billion.

Adobe posted diluted earnings per share was $2.32 on a GAAP basis and $3.03 on a non-GAAP basis, beating the market expectations of $2.81 per share.

Adobe, one of the largest software companies, reported digital media segment revenue was $2.79 billion, which represents 25% year-over-year growth. Creative revenue grew to $2.32 billion, representing 24% year-over-year growth. Document Cloud revenue was $469 million, representing 30% year-over-year growth.

Adobe shares rose over 3% to a record high of $570 on Friday. The stock surged over 10% so far this year.

Analyst Comments

Adobe (ADBE) delivered a strong qtr w/ net new ARR growth of 17% handily beating our 3% est. DX growth of 21% beat our 18% est, aided by its largest deal ever and now marking two qtrs of outsized upside. And op margins were ~250bps above our est. All in, a very clean qtr and w/strong 3Q guide & commentary on confidence for a 4Q seasonal flush, it suggests demand trends are back in full swing. PT to $650,” noted J. Derrick Wood, equity analyst at Cowen.

“We think valuations remain attractive, particularly given growth momentum seems to be elevating. We increased our FY21 growth forecast from 20% to 22%. And we raised FY22E FCF/sh from $16.07 to $16.49.”

Adobe Stock Price Forecast

Twenty-one analysts who offered stock ratings for Adobe in the last three months forecast the average price in 12 months of $616.16 with a high forecast of $665.00 and a low forecast of $520.00.

The average price target represents 11.75% from the last price of $551.36. Of those 21 analysts, 18 rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast to $610 from $575 with a high of $770 under a bull scenario and $464 under the worst-case scenario. The firm gave an “Overweight” rating on the software company’s stock.

“Digital Media net new ARR additions beating consensus by 15% and accelerating to 17% YoY growth show building momentum in Adobe’s core earnings engine. With operating margins 200 bps ahead of consensus driving 24% YoY EPS growth, positive revisions should drive Adobe (ADBE) towards our increased $610 PT,” noted Keith Weiss, equity analyst at Morgan Stanley.

“Adobe has a leading market share in some of the most dynamic secular growth areas in software: creative design, dynamic media, and marketing automation. As such, we see the longer-term growth story for ADBE as better than most. With a large recurring rev base and operating margin improvements expected (as margin pressure from recent acquisitions comes to an end), we expect 25% EBIT CAGR from FY20-FY22 and believe this durable growth is not fully reflected in shares. Our $610 price target is based on 42x CY22e EPS of $14.56, which implies 2.1x PEG on 20% EPS CAGR from FY20-FY22e.”

Several other analysts have also updated their stock outlook on Friday. Evercore ISI raised the stock price forecast to $625 from $550. Bernstein lifted the target price to $638 from $577. Stifel increased the price objective to $600 from $550. Goldman Sachs upped the target price to $665 from $580. Cowen and company lifted the price target to $650 from $600.

BMO raised the target price to $630 from $585. Mizuho increased the target price to $640 from $600. Citigroup upped the price target to $575 from $523. Oppenheimer lifted the stock price target to $600 from $550. RBC increased the target price to $650 from $575. Jefferies raised the target price to $660 from $630.

Check out FX Empire’s earnings calendar

Best Stocks For July 2021

Here’s how I found the top stocks to own in July of 2021. I went to MAPsginals.com and I found all the Top 20 stocks since 2012. I then just sorted for the most frequently occurring stocks in descending order. This is what I found:

Source: MAPsignals.com

Outlier stocks are the ones that account for a lion’s share of the gains of the stock market. One thing they have in common is the same ones keep showing up over and over. These were the top 5.

To show why they are great quality stocks, I wanted some quick metrics. I looked up the following key fundamentals I look for:

  • 1 Year Sales Growth
  • 3 Year Sales Growth
  • 1 Year Earnings Growth
  • 3 Year Earnings Growth
  • Profit Margin
  • Debt/Equity

The best quality stocks being bought by big money is what I look for and these fit the bill. Look at these stunning fundamentals:

Source: FactSet

The real test is if Big Money is buying the stocks. By finding the ones most frequently on the Top 20 report, we get a quick filter for the best of the best. In order to even get on one instance of a MAP Top 20 report, the stock needs to have superior fundamentals and get some Big Money Buy Signals. The Top 20 stocks are the best 20 out of over 6,000 every week. So imagine what it means to be on a report 70 or 80 times!

Here’s what it looks like… below we are the instances when each stock saw Big Money buying and made our rare Top 20 report. The key to finding outlier stocks is the repeating Buy signals.

Up first is Facebook, Inc (FB):

Source: MAPsignals, end of day data sourced from Tiingo.com

Now, Align Technology, Inc. (ALGN):

Source: MAPsignals, end of day data sourced from Tiingo.com

And Fortinet, Inc. (FTNT):

Source: MAPsignals, end of day data sourced from Tiingo.com

Number 4 is Adobe Systems Inc. (ADBE):

Source: MAPsignals, end of day data sourced from Tiingo.com

Finally, NVIDIA Corp. (NVDA):

Source: MAPsignals, end of day data sourced from Tiingo.com

So there you have it: a power packed list of the best stocks for July 2021. I’d like to say this is a quick and dirty way to find the best stocks out there, but there’s nothing dirty about it. MAPsignals uses quantitative analysis of mounds of daily stock data. Thirty years of it says two clear things:

  1. Outliers keep appearing time and time again.
  2. When they do, those are the best in show.

When Big Money is buying the best quality stocks, we should always pay attention. But when they do it year after year, it’s a message we don’t want to miss.

The Bottom Line

FB, ALGN, FTNT, ADBE, & NVDA represent the best stocks for July 2021. Based on strong fundamentals and Big Money buy signals year after year, these are worth further investigation.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in FB, ALGN, ADBE, FTNT, & NVDA at the time of publication.

Investment Research Disclaimer

https://mapsignals.com/contact/

For a look at all of today’s economic events, check out our economic calendar.

Adobe Could Hit New All-Time High on Strong Q2 Earnings; Target Price $567

The U.S. multinational computer software company Adobe is expected to report its fiscal second-quarter earnings of $2.81 per share, which represents year-over-year growth of about 15% from $2.45 per share seen in the same period a year ago.

The San Jose, California-based software company would post year-over-year revenue growth of over 19% to $3.73 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 7%.

Adobe’s better-than-expected results, which will be announced on June 17, would help the stock hit new all-time highs. Adobe shares rose over 8% so far this year. The stock ended 1.07% higher at $541.26 on Friday.

Analyst Comments

“Upside to Digital Media net new ARR, positive checks in Digital Experience, and conservative operating margin forecasts for 2Q make us buyers into the print. Multiple rev growth engines and durable 20%+ EPS growth frames an attractive risk/reward for this solid secular growth franchise,” noted Keith Weiss, equity analyst at Morgan Stanley.

Adobe has leading market share in some of the most dynamic secular growth areas in software: creative design, dynamic media, and marketing automation. As such, we see the longer-term growth story for ADBE as better than most. With a large recurring rev base and operating margin improvements expected (as margin pressure from recent acquisitions comes to an end), we expect 20%+ EBIT CAGR from FY20-FY22 and believe this durable growth is not fully reflected in shares. Our $575 PT is based on 41x CY22e EPS of $13.96, which implies ~2.3x PEG on 16% EPS CAGR from FY20-FY22e.”

Adobe Stock Price Forecast

Twenty analysts who offered stock ratings for Adobe in the last three months forecast the average price in 12 months of $567.78 with a high forecast of $650.00 and a low forecast of $520.00.

The average price target represents 4.90% from the last price of $541.26. Of those 20 analysts, 17 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $575 with a high of $698 under a bull scenario and $438 under the worst-case scenario. The firm gave an “Overweight” rating on the software company’s stock.

Several other analysts have also updated their stock outlook. Wolfe Research set an “outperform” rating and a $650.00 target price for the company. The Goldman Sachs Group reiterated a “neutral” rating and issued a $523.00 price target.

Bank of America reiterated a “buy” rating and issued a $570.00 price target on shares. Credit Suisse issued an “outperform” rating and a $575.00 price target for the company. Jefferies raised the target price to $630 from $560.

ADBE +8% YTD trails SP50 13% and peer INTU 24%, despite strong fundamentals (FY21 JEFe rev +20% with OM +150bp to 44%). Our expert calls have been very positive, especially for DX,” noted Brent Thill, equity analyst at Jefferies.

“These point to a decent size FQ2 beat (JEFe 2%+), though stock may need more to overcome headwinds affecting growth & software sectors and CFO transition uncertainty. Improving momentum into 2H could help turn around cautious sentiment. ADBE remains a top 4 large-cap software pick.”

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Oracle, H&R Block, Lennar and Adobe in Focus

Earnings Calendar For The Week Of June 14

Monday (June 14)

Ticker Company EPS Forecast
PDCO Patterson Companies $0.51
EV Eaton Vance $0.92
MIK Michaels Companies $0.30

Tuesday (June 15)

IN THE SPOTLIGHT: ORACLE

ORACLE: The world’s largest database management company is expected to report its fiscal fourth-quarter earnings of $1.31 per share, which represents year-over-year growth of over 9% from $1.20 per share seen in same period a year ago.

The Austin, Texas-based computer technology corporation would post revenue growth of more than 6% to $11.07 billion. In the last four quarters, on average, Oracle has beaten earnings estimates about 6%.

Oracle’s current low valuation at ~14x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” noted Keith Weiss, equity analyst at Morgan Stanley.

“We see 16% EPS growth in FY21 and 6% in FY22, driven by an aggressive pace of share buybacks. However, cc revenue growth is ~2%, in a software sector filled with strong secular growth stories, and just 2% operating income growth points to Oracle potentially reaching peak margins, leaving us Equal-weight at our $73 PT.”

H&R Block: The largest tax provider in the U.S. in terms of offices and revenues is expected to report its fiscal fourth-quarter earnings of $5.07 per share, which represents year-over-year growth of over 68% from $3.01 per share seen in the same period a year ago.

The tax preparation company operating in Canada, the United States, and Australia would post revenue growth of over 32% to around $2.4 billion.

HRB’s core business of assisted tax prep has seen declining volumes over the last 8 years, which we expect to continue this year. We expect the assisted business to remain under pressure given the industry shift toward DIY offerings, with a modest offset from HRB’s own growing DIY business,” noted Jeffrey Goldstein, equity analyst at Morgan Stanley.

“Recent acquisition Wave Financial could be a driver of long-term upside but limited synergies and competitive market makes it hard to prove ROI. HRB generates a high degree of FCF with share buybacks driving double-digit-digit EPS growth in the out years of our model. The stock trades at an attractive normalized FCF yield which suggests the stock could re-rate significantly by improving volumes.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JUNE 15

Ticker Company EPS Forecast
ORCL Oracle $1.31
HRB H&R Block $5.07
AHT Ashtead Group £0.29
HDS HD Supply Holdings $0.34

Wednesday (June 16)

IN THE SPOTLIGHT: LENNAR

The Miami-based home construction company is expected to report its first-quarter earnings of $2.37 per share, which represents year-over-year growth of over 40% from $1.65 per share seen in same period a year ago.

The United States’ leading homebuilders would post revenue growth of about 17% to $6.16 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JUNE 16

Ticker Company EPS Forecast
LEN Lennar $2.37
KFY Korn Ferry International $0.98

Thursday (June 17)

IN THE SPOTLIGHT: ADOBE

The U.S. multinational computer software company is expected to report its fiscal second-quarter earnings of $2.81 per share, which represents year-over-year growth of about 15% from $2.45 per share seen in same period a year ago.

The San Jose, California-based software company would post year-over-year revenue growth of over 19% to $3.73 billion.

Adobe has leading market share in some of the most dynamic secular growth areas in software: creative design, dynamic media, and marketing automation. As such, we see the longer-term growth story for ADBE as better than most,” noted Keith Weiss, equity analyst at Morgan Stanley.

“With a large recurring rev base and operating margin improvements expected (as margin pressure from recent acquisitions comes to an end), we expect 20%+ EBIT CAGR from FY20-FY22 and believe this durable growth is not fully reflected in shares. Our $575 PT is based on 41x CY22e EPS of $13.96, which implies ~2.3x PEG on 16% EPS CAGR from FY20-FY22e.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JUNE 17

Ticker Company EPS Forecast
JBL Jabil Circuit $1.04
ADBE Adobe Systems $2.81
KR Kroger $0.98
CMC Commercial Metals $0.84

Friday (June 18)

There are no major earnings scheduled

Best ETFs For June 2021

A portfolio of outlier stocks can become chock full of monster gains for years to come, if chosen wisely.

But wouldn’t it be great if there was already a collection of outliers we could buy without even having to think about it?

Well maybe there is a way to do just that… through outlier ETFs.

So, here I’m going to give you the best ETFs that big money is getting involved in this month.

First thing’s first: to find them, I looked at all the ETFs making Big Money signals. I did that by heading over to MAPsignals.com and then looked at the Big Money ETF Buys and Sells chart. I looked at days with the biggest buying, circled here:

Once I had all the ETFs, I wanted to know which were the best potential opportunities. ETFs are baskets of stocks. And because MAPsignals scores over 6,000 stocks every day, as long as I know which stocks make up the ETFs, I can rank them all.

Here are the 5 best ETFs with scores: The Composite score, Technical score, and Fundamental score. These were computed by accounting for each components stock’s score and its associated weighting in the ETF. (keep in mind that weightings will change from time to time)

Below we see each ETF, their recent Big Money activity, and their scores. XLF, ITB, and XLC are top ranked ETFs. That makes sense because financials, home builders, and communications stocks have been leading the market much of this year so far.

IGV and ARKG, however, rank low on our list of ETFs. But there is opportunity here because the low scores are due to weak technicals. Big Money has been selling these ETFs, largely because they are heavily concentrated in growth stocks. But these stocks have excellent fundamentals: growing sales and earnings and big profits. These weak ETFs represent great potential bargains.

Let’s quickly look at the year-to-date performance of these 5 ETFs:

  • XLF +29.3%
  • ITB +29.2%
  • XLC +13.5%
  • IGV -4.0%
  • ARKG -18.1%

Now let’s quickly look at Big Money buying in the ETFs. Each chart below has many green bars which represents unusually large buying. The few red bars represent unusually large selling. What jumps out is the huge buying in all the ETFs.

Only with IGV and ARKG, there was recent selling too. But again, selling on ETFs and stocks with great fundamentals represents a value opportunity.

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Here’s why I like these ETFs: they are highly concentrated with fundamentally superior stocks. Below we see a table of three stocks in each ETF. They are some of the highest weightings in each.

Notice their fundamental scores are very strong on a scale from 0-100. This means strong growing sales, earnings, and profits over one and three years. This is how MAPsignals boils down all its fundamental research into one elegant score.

Now with XLF, ITB, and XLC – we see the stocks also have strong technical scores. That means Big Money has been pouring into them, lifting them to new highs. They are buoyant with Big Money support. But in IGV and AKG, we see weak technical scores. This means Big Money has been exiting the stocks.

But before you get spooked, let’s keep the recent environment in mind: Growth has fallen out of favor while value and reopen stocks have become all the rage. But it’s essential to remember these growth companies create phenomenal products and services enhancing our lives. I don’t foresee that stopping in the future. The recent selling is temporary and thematic.

What really drives this home is looking at how long-term Big Money buying can lead to monstrous gains. Below are charts showing all the instances these stocks were Top stocks in our research since 2015: our weekly report of outliers. We don’t need to go into details on each chart.

I’d like you to notice a few things:

  • When Big Money buying pours in, stocks go up
  • Repeated outliers, especially for years often means outsized gains

Owning outlier stocks is the way I try to beat markets. Easy exposure to many stocks can be achieved by buying ETFs. But just like anything, you must be in the 1% if you want to be in the 1%.

We can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when we catalog the components and find outlier stocks underneath… that’s the winning recipe.

So, there you have it: the 5 best ETFs that Big Money has been trafficking in recently. Outlier ETFs hold outlier stocks. Finding them is the key to finding potentially outlier gains.

Now let’s look at what those look like:

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

The Bottom Line

XLF, ITB, XLC, IGV, & ARKG represent top ETFs for June 2021. Financials, homebuilders, & Communications stocks have performed well lately, which should continue. Software and Genomics companies have reached interesting levels, too. Paying attention to the fundamental quality of ETF constituents is paramount.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions GOOGL, CRM, & REGN in managed accounts, but no positions in XLF, ITB, XLC, IGV, ARKG, BLK, SCHW, SPGI, DHI, LEN, LOW, FB, ATVI, ADBE, MSFT, TDOC, & VRTX at the time of publication.

Investment Research Disclaimer

Best Growth Stocks May 2021

The hallmark way we go about finding the best stocks…the outliers, is by looking for quiet Big Money trading activity.

Oftentimes, that can be institutional activity. We’ll go over what that looks like in a bit. But, the 5 stocks we see as long-term candidates are ACN, ADBE, CROX, RH, & RGEN.

For MAPsignals, we believe the true tell on the near-term trajectory of the stock lies in the trading activity of the stock. The bottom line here is that oftentimes the manner in which a stock trades can oftentimes alert you to the forward fundamental picture more so than by simply looking at a company’s financials alone. We want the odds on our side when looking for the highest-quality stocks.

Up first is Accenture Plc (ACN), which is a leading professional services firm. They have been cruising higher for years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for ACN being:

  • YTD performance (+11.56%)
  • YTD outperformance vs. technology ETF (+.95% vs. XLK)
  • Recent big money signals

Just to show you what our Big Money signal looks like, have a look at all of the top buy signals ACN has made recently. It’s had a strong chart over the past few years, too. Green bars are showing that Accenture was likely being bought by a Big Money player according to MAPsignals. It’s clear there’s a lot of green historically with this stock. That’s exactly what you want to see when looking for a great growth name.

Chart, line chart Description automatically generated

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, you need to look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Accenture’s numbers have been strong:

  • 3-year sales growth rate (+6.53%)
  • 3-year earnings growth rate (+13.1%)

Next up is Adobe, Inc. (ADBE), which is a leading software company. The company has been a huge winner over the years as they are extremely profitable.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for ADBE being:

  • YTD performance (+3.12%)
  • YTD vs. software ETF (-2.13% vs. IGV)
  • Recent big money signals

While the stocks has underperformed recently, look below. These are the top buy signals Adobe has made since 2017. Clearly the Big Money has been consistent for years:

Chart, histogram Description automatically generated

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a great long-term technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Adobe has solid fundamentals:

  • 3-year sales growth rate = +21%
  • 3-year earnings growth rate = +49.7%

Another growth name to consider is Crocs, Inc. (CROX), which is a leading footwear and apparel company.

When we decide on the strongest candidate for long-term growth, we want to see a history of big money buying the shares. A few technical areas we like for Crocs are:

  • YTD outperformance vs. market (+23.34% vs. SPY)
  • YTD outperformance vs. discretionary ETF (+24.14% vs. XLY)

Below are the big money signals CROX has made since 2017. After the pandemic lows, it’s been moon-bound:

Chart, line chart Description automatically generated

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a strong technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. Croc’s revenue growth rate is impressive. I expect earnings to rebound in the coming years:

  • 3-year sales growth rate = +10.67%
  • 3-year earnings growth rate = -585%

Number 4 on the list is RH (RH), which is a leading high-end retailer for the home. The shares have been in bull-mode the past couple of years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for RH being:

  • YTD outperformance vs. market (+41.79% vs. SPY)
  • YTD outperformance vs. discretionary ETF (+42.59% vs. XLY)
  • Recent big money signals

Below are the big money signals that RH has made since 2017:

Chart, line chart Description automatically generated

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, RH has been growing nicely:

  • 3-year sales growth rate = +5.31%
  • 3-year earnings growth rate = +2899.12%

Our last growth candidate is Repligen, Corp. (RGEN), which is a leading medical instruments and supplies company. They have been growing rapidly for years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for RGEN being:

  • YTD outperformance vs. market (+2.77% vs. SPY)
  • YTD outperformance vs. healthcare sector (+5.8% vs. XLV)
  • Historical big money signals

Below are the big money signals Repligen has made since 2017. You can see how powerful the performance has been:

Chart, line chart Description automatically generated

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Repligen has grown over the past few years:

  • 3-year sales growth rate = +37.39%
  • 3-year earnings growth rate = +41.8%

The Bottom Line

ACN, ADBE, CROX, RH, & RGEN represent top growth stocks for May 2021. Given the strong historical revenue & earnings growth, and multiple big-money buy signals, these stocks could be worth extra attention.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in any of the securities mentioned at the time of publication.

Investment Research Disclaimer

Adobe Reports Impressive Q1 Results; Target Price $563

Adobe, an American multinational computer software company, reported better-than-expected earnings in the first quarter and raised its full-year outlook on expectations that creative applications will drive growth this year.

The San Jose, California-based software company said its first-quarter revenue surged over 25% year-on-year to $3.905 billion, beating the Wall Street consensus estimates of $3.76 billion. Adobe’s digital media revenue rose more than 30% year-on-year and revenue from digital experience climbed 24%.

The software company reported adjusted earnings per share of $3.14 per share, which represents year-over-year growth of over 38% from $2.27 per share seen in the same quarter a year ago.

For the second quarter, Adobe forecasts revenue of $3.720 billion and non-GAAP EPS of $2.81. The company also raised guidance for fiscal 2021 revenue to $15.450 billion and non-GAAP EPS to $11.85.

Adobe shares, which surged over 51% in 2020, closed about 2% higher at $460.20 on Tuesday.

Analyst Comments

“A solid 6% beat in Digital Media ARR additions, Digital Experience revenues 4% ahead of consensus and op margins 270 bps ahead of the street yielded a 13% EPS beat in Q1 and a 6% raise of the FY21 EPS target. A durable multiple and EPS again ticking higher should drive ADBE towards our $575 price target,” noted Keith Weiss, equity analyst at Morgan Stanley.

“Historically Adobe does not often raise full-year guidance this early in the year. However, the 2% increase to FY21 target revenue also includes over 1 point from a more favorable FX impact, suggesting management isn’t getting too much more aggressive and there exists further potential for upside in an improving spending environment. On EPS, FY21 guidance was raised 6% or $0.65, reflecting a lower tax rate of 16% vs. 17.5% prior (a $0.20 benefit) and leverage on the higher revenue targets.”

Adobe Stock Price Forecast

Nine analysts who offered stock ratings for Adobe in the last three months forecast the average price in 12 months of $563.33 with a high forecast of $600.00 and a low forecast of $510.00.

The average price target represents a 22.41% increase from the last price of $460.2. Of those nine analysts, eight rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

“We see strength on all fronts of quarterly performance. New customer engagement levels remained strong and activity on adobe.com remains elevated as a result of the extended remote work environment. We think results continue to support our investment case that Adobe will continue to dominate the creative segment, and its well-rounded portfolio, including Magento and Marketo, position the firm as a digital marketing leader,” noted Dan Romanoff, equity analyst at Morningstar.

“Given results and guidance, we are raising our fair value estimate to $520 per share, from $500. As software has lagged early in 2021, we see shares as increasingly attractive.”

Morgan Stanley gave the base target price of $575 with a high of $698 under a bull scenario and $438 under the worst-case scenario. The firm gave an “Overweight” rating on the software company’s stock.

Several other analysts have also updated their stock outlook. Jefferies lifted the target price to $610 from $600. Adobe had its target price raised by equities research analysts at Goldman Sachs to $523 from $523. The brokerage currently has a “sell” rating on the software company’s stock.

Moreover, Griffin Securities reiterated a “buy” rating and issued a $597 target price. Royal Bank of Canada lifted their price target to $575 from $570 and gave the company an “outperform” rating.

Check out FX Empire’s earnings calendar

Adobe to Post Q1 Earnings, Revenue Growth of About 22%; Target Price $563

Adobe, an American multinational computer software company, is expected to deliver higher earnings and revenue for its fiscal first quarter on Tuesday, largely driven by a broader shift to digital marketing due to the COVID-19 pandemic and expectations of a recovery in digital advertisement spending this year.

San Jose, California-based software company is expected to report its first-quarter earnings of $2.79 per share, which represents year-over-year growth of about 23% from $2.27 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of 4.7%.

The software company’s revenue is expected to jump over 22% year-on-year to around $3.76 billion.

According to the ZACKS Research, Adobe forecasts year-over-year revenue growth of 26% from Digital Media. Digital Experience segment revenues are expected to grow 19% on a year-over-year basis, while Digital Experience subscription revenues are likely to increase 22%.

Adobe shares, which surged over 51% in 2020, closed 2.5% higher at $452.41 on Monday.

Analyst Comments

“Improvement in broad advertising spend & healthy channel checks support upside to forecasts as Adobe progresses through FY21. Combined with additional room for margin expansion, durable 20%+ EPS growth makes Adobe a keyway to play a secular growth franchise at a reasonable valuation,” noted Keith Weiss, equity analyst at Morgan Stanley.

“Adobe has leading market share in some of the most dynamic secular growth areas in software: creative design, dynamic media, and marketing automation. As such, we see the longer-term growth story for ADBE as better than most. With a large recurring rev base and operating margin improvements expected (as margin pressure from recent acquisitions comes to an end), we expect 15%+ EBIT CAGR from FY20-FY22 and believe this durable growth is not fully reflected in shares. Our $560 PT is based on 41x CY22e EPS of $13.59, which implies ~2.6x PEG on 16% EPS CAGR from FY20-FY22e.”

Adobe Stock Price Forecast

Nine analysts who offered stock ratings for Adobe in the last three months forecast the average price in 12 months of $563.33 with a high forecast of $600.00 and a low forecast of $510.00.

The average price target represents a 24.52% increase from the last price of $452.41. Of those nine analysts, eight rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

“Our Digital Media partner survey showed an improvement vs. last qtr w/ 58% meeting/beating targets, up from 50% last qtr. 2Q pipeline commentary was strong; FY outlooks were unchanged; outlook on Doc Cloud very encouraging. At ~29xEV/CY22E FCF, valuations are near trough levels & we think shares are poised for a bounce off of strong results,” noted J. Derrick Wood, equity analyst at Cowen and Company.

ADBE shares are down 10% YTD and we think valuations are attractive at 29x EV/CY22E FCF. We continue to see strong upside potential navigating through CY21, aided by an SMB recovery & growing tailwind for Doc Cloud. Reiterate Outperform & $600 price target.”

Morgan Stanley gave the base target price of $560 with a high of $680 under a bull scenario and $426 under the worst-case scenario. The firm gave an “Overweight” rating on the software company’s stock.

Several other analysts have also updated their stock outlook. Adobe had its target price raised by equities research analysts at Goldman Sachs to $523 from $523. The brokerage currently has a “sell” rating on the software company’s stock. Griffin Securities reiterated a “buy” rating and issued a $597 target price. Royal Bank of Canada lifted their price target to $575 from $570 and gave the company an “outperform” rating.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: GameStop, Adobe and Darden Restaurants in Focus

Earnings Calendar For The Week Of March 22

Monday (March 22)

Ticker Company EPS Forecast
SNX SYNNEX $1.67
YY YY $7.54
CBPO China Biologic $0.69
BKRKY Bank Rakyat $0.13
ILD Iliad €0.75
EGFEY Eurobank Ergasias S.A. ADR -$0.01
NGHC National General $0.73
KGF Kingfisher £6.97
TLK Telekomunikasi Indns Tbk Prshn Pp Pt $0.29
KHOLY Koc Holdings AS $0.55
BEAT BioTelemetry $0.48
PE Parsley Energy $0.25
WPX WPX Energy $0.04
HDS HD Supply Holdings $0.39
PKX Posco $1.52
CHA China Telecom $1.57
MNTA Momenta Pharmaceuticals -$0.50

Tuesday (March 23)

IN THE SPOTLIGHT: GAMESTOP, ADOBE

GAMESTOP: The world’s largest multichannel video game retailer is expected to report its fourth-quarter earnings of $1.35 per share, which represents year-over-year growth of over 6% from $1.27 per share seen in the same quarter a year ago.  In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 21%.

The Grapevine, Texas-based company would post year-over-year revenue growth of about 1% year-on-year to $2.21 billion.

“Shares of GameStop have outpaced the industry in the past three months. Notably, the company’s shares got a boost recently after it announced the formation of a new strategic committee for accelerating transformation. The committee includes Ryan Cohen, who had been appointed to the company’s board earlier in January. The company had restructured its board to include three activist investors from RC Ventures. The move is expected to aid the company in boosting digital offerings,” noted analysts at ZACKS Research.

“Moving on, the company’s comparable-store sales (comps) numbers for the holiday season were encouraging. Markedly, strong e-commerce sales and sturdy demand for consoles aided holiday comps. Management continues to expect positive comps and profitability for the fourth quarter. However, store closures and supply chain constraints are likely to remain a drag.”

ADOBE: San Jose, California-based software company is expected to report its first-quarter earnings of $2.79 per share, which represents year-over-year growth of about 23% from $2.27 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of 4.7%.

According to the ZACKS Research, Adobe forecasts year-over-year revenue growth of 26% from Digital Media. Digital Experience segment revenues are expected to grow 19% on a year-over-year basis, while Digital Experience subscription revenues are likely to increase 22%.

“Our Digital Media partner survey showed an improvement vs. last qtr w/ 58% meeting/beating targets, up from 50% last qtr. 2Q pipeline commentary was strong; FY outlooks were unchanged; outlook on Doc Cloud very encouraging. At ~29xEV/CY22E FCF, valuations are near trough levels & we think shares are poised for a bounce off of strong results,” noted J. Derrick Wood, equity analyst at Cowen and Company.

ADBE shares are down 10% YTD and we think valuations are attractive at ~29x EV/CY22E FCF. We continue to see strong upside potential navigating through CY21, aided by an SMB recovery & growing tailwind for Doc Cloud. Reiterate Outperform & $600 price target.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 23

Ticker Company EPS Forecast
HUYA HUYA Inc $0.82
ADBE Adobe Systems $2.79
INFO IHS Markit Ltd $0.70
BNGO BioNano Genomics Inc -$0.06
HOME At Home Group $0.69
VNET 21Vianet $1.65
GME GameStop $1.35
NEOG Neogen $0.26
GGB Gerdau $0.17
CEO Cnooc $4.94

Wednesday (March 24)

Ticker Company EPS Forecast
BWY Bellway £120.00
GIS General Mills $0.84
WGO Winnebago Industries $1.40
WOR Worthington Industries $1.12
HTHT China Lodging $2.41
RH Restoration Hardware $4.72
KBH Kb Home $0.92
FUL HB Fuller $0.48
PAYX Paychex $0.93
TCEHY Tencent $0.52
ACH Aluminum Of China -$0.15

 Thursday (March 25)

IN THE SPOTLIGHT: DARDEN RESTAURANTS

Darden Restaurants, an American multi-brand restaurant operator, is expected to report its third-quarter earnings of $0.69 per share, which represents a year-over-year decline of over 64% from $1.90 per share seen in the same quarter a year ago. However, it is worth noting that in the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 260%.

The company, which owns and operates 1,800 full-service casual and fine dining, is expected to see a year-over-year revenue decline of over 30% to around $1.6 billion.

“Best in class casual dining operator with strong brand portfolio. As the largest CDR operator, DRI has substantial scale advantages in shared services which can be levered in a post-COVID-19 environment by improving margins and gaining market share. Lead brand Olive Garden (50% of sales) garners top consumer scores, its comp sales have historically outpaced the industry and recent cost savings have improved unit economics,” noted John Glass, equity analyst at Morgan Stanley.

“Acquisition of Cheddar’s has been more challenging than initially expected, though still provides longer-term growth potential. Strong position relative to peers, scale, operational leadership, unit growth, and structurally higher margins drive our Overweight rating.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 25

Ticker Company EPS Forecast
DRI Darden Restaurants $0.69
SAIC Science Applications International $1.45
TOELY Tokyo Electron Ltd PK $0.80
AUOTY AU Optronics $0.31
CAG Conagra Foods $0.58
LULU Lululemon Athletica $2.49
PTR Petrochina $1.22
JEF Jefferies Financial Group Inc $1.08
IGMS IGM Biosciences -$0.74
SBS Companhia De Saneamento Basico $0.18
SHI SinOPEC Shanghai Petrochemical $1.60

 

Friday (March 26)

No major earnings scheduled for release.

US Stock Markets Daily Recap: That’s Why You Buy the Dips

Days like Tuesday (Mar. 9) are why you buy the dips. It was nothing short of a reverse rotation from what we’ve seen as of late. Bond yields moved lower; tech stocks popped.

That’s why I called BUY on the Nasdaq.

Inflation fears and the acceleration of bond yields are still a concern. But it looks as if things are stabilizing, at least for one day. The lesson here, though, is to be bold, a little contrarian, and block out the noise.

Unless you’ve been living under a rock, you know that recent sessions have been characterized by accelerating bond yields driving a rotation out of high growth tech stocks into value and cyclical stocks that would benefit the most from an economic recovery. The Nasdaq touched correction territory twice in the last week and gave up its gains for the year.

But imagine if you bought the dip as I recommended.

The Nasdaq on Tuesday (Mar. 9) popped 3.7% for its best day since November. Cathie Wood’s Ark Innovation ETF (ARKK) surged more than 10% for its best day ever after tanking by over 30%. Semiconductors also rallied 6%.

Other tech/growth names had themselves a day too: Tesla (TSLA) +20%, Nvidia (NVDA) +8%, Adobe (ADBE) +4.3%, Amazon +3.8%, Apple (AAPL) +4.1%, and Facebook (FB) +4.1%.

In keeping with the theme of buying the dip, do you also know what happened a year ago yesterday to the date? The Dow tanked 7.8%!

There’s no way to time the market correctly. If you bought the Dow mirroring SPDR DJIA ETF (DIA) last March 9, you’d have still seen two weeks of pain until the bottom. However, you’d have also seen a gain of almost 36% if you bought that dip and held on until now.

Look, I get there are concerns and fears right now. The speed at which bond yields have risen is concerning, and the fact that another $1.9 trillion is about to be pumped into a reopening economy makes inflation a foregone conclusion. But let’s have a little perspective here.

Bond yields are still at a historically low level, and the Fed Funds Rate remains 0%.

So is the downturn overblown and already finished?

Time will tell. I think that we could still see some volatile movements over the next few weeks as bond yields stabilize and the market figures itself out. While I maintain that I do not foresee a crash like what we saw last March and feel that the wheels remain in motion for an excellent 2021, Mr. Market has to figure itself out.

A correction of some sort is still very possible. I mean, the Nasdaq’s already hit correction territory twice in the last week and is still about 3-4% away from returning to one. But don’t fret. Corrections are healthy and normal market behavior. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).

Most importantly, a correction right now would be an excellent buying opportunity. Just look at the Nasdaq Tuesday (Mar. 9).

It can be a very tricky time for investors right now. But never, ever, trade with emotion. Buy low, sell high, and be a little bit contrarian. There could be some more short-term pain, yes. But if you sat out last March when others bought, you are probably very disappointed in yourself. Be cautious, but be a little bold too.

You can never time the market.

My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.

With that said, to sum it up:

There is optimism but signs of concern. The market has to figure itself out. A further downturn is possible, but I don’t think that a decline above ~20%, leading to a bear market, will happen any time soon.

Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck.

 Nasdaq- That’s Why I Called BUY

Figure 1- Nasdaq Composite Index $COMP

For the second time in a week, the Nasdaq hit correction territory and rocketed out of it. It saw its best day since November and proved once again that with the Nasdaq, you always follow the RSI. There could be more uncertainty over the next few weeks as both the bond market and equity market figure themselves out. However, the Nasdaq declines were very buyable, as I predicted.

If you bought the dip before Tuesday’s (Mar. 9) session, good on you. Be a little bit bold and fearless right now. Take Ark Funds guru Cathie Wood, for example. Many old school investors scoffed at her comments on Monday (Mar. 8) after she practically doubled down on her bullishness for her funds and the market as a whole. After crushing 2020, her Ark Innovation Fund (ARKK) tanked over 30%. Many called her the face of a bubble. Many laughed at her.

Tuesday, March 9, ARKK saw its best day in history.

I’m not saying that we’re out of the woods with tech. All I’m saying is don’t try to time the market, don’t get scared and have perspective.

The Nasdaq is once again roughly flat for the year, its RSI is closer to oversold than overbought, and we’re still below the 50-day moving average, near a 2-month low, and right around support at 13000.

It can’t hurt to start nibbling now. There could be some more short-term pain, but if you waited for that perfect moment to start buying a year ago when it looked like the world was ending, you wouldn’t have gained as much as you could have.

I think the key here is to “selectively buy.” I remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.

Mike Wilson , chief investment officer at Morgan Stanley, had this to say about recent tech slides- “I don’t think this is the end of the bull market or the end of tech stocks per se, but it was an adjustment that was very necessary.”

I like the levels we’re at, and despite the possibility of more “adjustments” in the short-run, it’s a good time to BUY. But just be mindful of the RSI, and don’t buy risky assets. Find emerging tech sectors or high-quality companies trading at a discount.

For an ETF that attempts to correlate with the performance of the NASDAQ directly, the Invesco QQQ ETF (QQQ) is a good option.

For more of my thoughts on the market, such as when small-caps will be buyable, more thoughts on inflation, and emerging market opportunities, sign up for my premium analysis today.

Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter – it’s absolutely free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

Thank you.

For a look at all of today’s economic events, check out our economic calendar.

Matthew Levy, CFA
Stock Trading Strategist
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits’ employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Earnings to Watch Next Week: Toll Brothers, AutoZone, Campbell, Adobe and Costco Wholesale in Focus

Earnings Calendar For The Week Of December 7

Monday (December 7)

IN THE SPOTLIGHT: TOLL BROTHERS

Toll Brothers, a home construction company based in Fort Washington, is expected to report a profit of $1.23 in the fourth quarter, up from prior $0.90, with new orders growth of more than 60%  as the company benefits from rising housing demand due to record low mortgage rates. Toll Brothers’ shares closed 1.25% higher at $47.9 on Friday; the stock is up over 20% so far this year.

“Our 4Q EPS estimate goes to $1.25. Our FY21 EPS estimate goes to $4.42 given what we expect will be a very large backlog ($6.6 billion, +26% y/y) heading into the new year. As a higher-end builder constructing largely build-to-order product, we do expect closing timing and costs to construct to have somewhat less visibility than peers despite the long backlog. This means guidance will likely be more important to share price performance post-EPS release than 4Q data. As a result of our higher estimates, our target goes to $40 from $36, but for now, we still see relative underperformance for the shares in the intermediate term,” said Carl E. Reichard, equity analyst at BTIG Group.

“While Toll Brothers (TOL) is benefiting from the ‘rising tide’ of housing demand, we believe entry-level, spec-focused builders will produce better growth, margins and returns in an environment where valuation gaps have not led to differentiated stock performance. Although shares are less expensive on a relative basis (1.3x TBV vs 1.8x for the group), and TOL has been moving to smaller homes and more optioned lots to improve turns and returns, we are looking for additional evidence that the company’s strategy for structural (not just cyclical) improvement in turns and/or margins is bearing fruit, such as improved backlog-to-close cycle time (running over 300 days currently) and inventory turns nearer to the group average of 1.0x (currently running below 0.7x.).”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 7

Ticker Company EPS Forecast
JKS JinkoSolar Holding Co. Ltd. ADR $0.85
CASY Casey’s General Stores $2.80
HQY Healthequity Inc $0.36
SMAR Smartsheet Inc. -$0.21
SUMO Sumo -$0.24
EC Ecopetrol $0.15
GCTAY Siemens Gamesa ADR $0.01

Tuesday (December 8)

IN THE SPOTLIGHT: AUTOZONE

AutoZone, the largest retailer of aftermarket automotive parts and accessories in the United States, is expected to report a profit of $17.56 in the first quarter ended Saturday, November 21, 2020. AutoZone’s shares closed 0.75% higher at $1162.63 on Friday. However, the stock is down 2.5% so far this year.

“AutoZone (AZO) is our top pick in DIY Auto. We see it as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (80% of sales),” equity analysts at Zacks Research noted.

“In addition, its DIFM growth was accelerating pre-COVID-19 and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 8

Ticker Company EPS Forecast
HRB H&R Block -$0.94
CMD Cantel Medical Corp $0.37
THO Thor Industries $1.58
MDB MongoDB Inc -$0.45
GWRE Guidewire Software -$0.05
AVAV AeroVironment $0.31
JRONY Jeronimo Martins $0.45
HOCPY Hoya Corp $0.74

Wednesday (December 9)

IN THE SPOTLIGHT: CAMPBELL SOUP

Campbell Soup, a US-centric packaged food company, is expected to report a profit of $0.91 in the first quarter of fiscal year 2021, up from previous $0.63. The one of the world’s top soup maker has set its Q1 2021 pre-market guidance at $0.88-$0.92 EPS. Campbell’s shares closed 0.49% lower at $48.5 on Friday; the stock is down about 2% so far this year.

“High exposure to secularly challenged soup category: Shelf-stable soup (26.5% of sales) faces headwinds given shifts in preferences toward better-for-you and fresh foods, competition from private label, and pricing pressure. Snacking brands are well-positioned, but face competitive pressures: Milano, Goldfish, Farmhouse, and Snyder’s-Lance have strong brand equity, but face high competition from PEP and MDLZ,” said Pamela Kaufman, equity analyst at Morgan Stanley.

Significant organizational changes over last two years refocused the company and show promise: Divesting non-core businesses and new leadership refreshes the company’s strategic plan, allowing the company to focus on its key segments and geographies,” Kaufman added.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 9

Ticker Company EPS Forecast
VRNT Verint Systems $0.80
RH Restoration Hardware $5.23
GEF Greif $0.70
AUOTY AU Optronics $0.09

Thursday (December 10)

IN THE SPOTLIGHT: ADOBE

Adobe, one of the largest software companies, is expected to report a profit of $2.67 in the fourth quarter, up from the previous $2.57. The company has set its Q4 2020 after-hours guidance at 2.64-2.64 EPS and its Q4 guidance at $2.64 EPS.

“Adobe (ADBE) has leading market share in some of the most dynamic secular growth areas in software: creative design, dynamic media, and marketing automation. As such, we see the longer-term growth story for ADBE as better than most,” said Keith Weiss, equity analyst at Morgan Stanley.

“With a large recurring rev base and operating margin improvements expected (as margin pressure from recent acquisitions comes to an end), we expect 23% EBIT CAGR from FY19-FY21 and believe this durable growth is not fully reflected in shares. Our $560 price target is based on 49x CY21e EPS of $11.50, which implies 2.3x PEG on 21% EPS CAGR from FY19-FY21e,” Weiss added.

IN THE SPOTLIGHT: COSTCO WHOLESALE

Costco Wholesale, the largest wholesale club operator in the U.S., is expected to report a profit of $2.02 in the first quarter of the fiscal year 2021, down from the previous $3.51. D.A. Davidson equity analyst M. Baker forecasts the retailer will report earnings per share of $1.93 for the quarter, up from their previous forecast of $1.92.

“FQ1 comps bested our above-cons. est. (as reported on 12/2) with earnings set for 12/10. All-in, Q1 comps accel’d Q/Q, but November slowed, we believe primarily due to hardlines -10 pts and ticket -220 bps. However, largely cont’d strength through the qtr, notably in Fresh and Softlines, should be a positive read for core-on-core GM% and EPS. While go-fwd comps likely moderate on vaccine/normalcy, we see robust growth and share gain opptys L-T. Reiterate Buy,” noted Stephanie Wissink, equity analyst at Jefferies.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 10

Ticker Company EPS Forecast
CIEN Ciena $0.63
AVGO Avago Technologies $6.24
MTN Vail Resorts -$3.60
LULU Lululemon Athletica $0.86
ORCL Oracle $1.00
SMDS Ds Smith £17.80
ASEKY Aisin Seiki Co $0.42
RLAY Relay Therapeutics Inc. -$0.32
FIZZ National Beverage $0.90

Friday (December 11)

No major earnings scheduled for release.

Couch Shoppers Expected to Make Cyber Monday Best Digital Shopping Day Ever

U.S. retailers opened their doors to Black Friday shoppers by offering steep discounts, but that didn’t help their sales numbers with social distancing practices and other measures put in place to mitigate infection risks likely driving down traffic. The good news is e-commerce sales reached a new record.

Black Friday Shopping in Stores Craters 52%

CNBC reported over the weekend that traffic at stores on Black Friday fell by 52.1% compared with last year, as Americans by and large eschewed heading to malls and queuing up in lines for shopping online, according to preliminary data from Sensormatic Solutions.

For the six key weeks of the holiday season this year, traffic in retail stores is expected to be down 22% to 25% year over year, an earlier forecast by Sensormatic Solutions said.

“We knew Black Friday [traffic] was going to be down, we just didn’t know how much it was going to be down,” said Brian Field, a senior director of global retail consulting at Sensormatic Solutions. “Shoppers are spreading out their shopping throughout the holiday season because of concerns about social distancing and the pandemic.”

Many malls looked bleak, and parking lots were more empty than full, across much of the country during the early hours of the morning Friday. Some reported traffic picking up later in the day, especially at outlet and open-air shopping centers, as some consumers felt more comfortable heading out. The warmer weather that blanketed much of the country also helped.

“Black Friday this year, from a traffic impact perspective, looked a lot like a typical Saturday after a Black Friday,” Field said.

Black Friday 2020 Online Shopping Surges 22% to Record $9 Billion – Adobe Analytics

Spending online on Black Friday this year surged nearly 22% to hit a new record, according to data from Adobe Analytics, as the Covid pandemic pushed more people to shop from the sofa and avoid crowded stores and malls.

Consumers spent $9 billion on the web the day after Thanksgiving, up 21.6% year over year, according to Adobe, which analyzes website transactions from 80 of the top 100 U.S. online retailers.

On Black Friday, Adobe found consumers spent $6.3 million per minute online, or $27.50 per person, on average. Spending on smartphones surged 25.3% year over year to reach $3.6 billion, representing 40% of total e-commerce spending.

This makes Black Friday 2020 the second-largest online spending day in history in the United States, behind Cyber Monday last year.

Retail Stock Investors Looking Forward to Cyber Monday

Despite the slow traffic at the malls on Friday, traditional brick and mortar stores may have been saved by robust online buying and curbside pickups. However, the most popular online sellers like Amazon and Etsy should continue to outperform on Cyber Monday.

According to Adobe Analytics, Cyber Monday (November 30) this year is slated to become the largest digital sales day ever, with spending reaching between $10.8 billion and $12.7 billion, which would represent growth of 15% to 35% from a year earlier.

For a look at all of today’s economic events, check out our economic calendar.