Earnings Week Ahead: PayPal, Middleby, Walt Disney and AstraZeneca in Focus

Earnings Calendar For The Week Of November 8

Monday (November 8)

IN THE SPOTLIGHT: PAYPAL

The leading global payments company PayPal will post earnings of $1.07 per share in the third quarter, more or less in line with the reading seen in the same period a year ago. San Jose, California-based company would post revenue growth of about 14% to around $6.2 billion.

PayPal estimates revenues of about $6.15 billion to $6.25 billion during the third quarter of 2021, up by 13-14% from the previous quarter. The company anticipates non-GAAP earnings per share of $1.07 during Q3 of 2021.

PayPal, one of our top OWs (Overweight), is the preferred digital wallet option for non-Amazon merchants, as evidenced by its online acceptance lead vs. other digital wallets and industry-low attrition. PayPal’s efforts to offer a seamless and secure checkout experience ties its TPV growth rate with the secular growth of eCommerce. As consumers increase their habitual use of PayPal, the company should grow its TPV at or above the rate of eCommerce (ex-Amazon),” noted James Faucette, equity analyst at Morgan Stanley.

“Venmo, POS and partnership monetization could offer additional TPV and revenue growth, while operating leverage from its scale support 20%+ earnings growth over the medium term, despite near-term headwinds from eBay and macro impacts.”

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

Ticker Company EPS Forecast
FIVN Five9 $0.24
THS TreeHouse Foods $0.50
BKI Black Iron Inc. $0.57
COTY Coty $0.02
AEIS Advanced Energy Industries $0.82
AMRS Amyris -$0.15
SANM Sanmina $0.99
AU Anglogold Ashanti $0.36
MRTX Mirati Therapeutics -$2.88
CTRE CareTrust REIT $0.20
PSEC Prospect Capital $0.18
AMC AMC Entertainment -$0.53
VAC Marriottacations Worldwide $1.42
JKHY Jack Henry Associates $1.32
PRI Primerica $2.98
NNI Nelnet $1.68
OSH Oak Street Health -$0.42
ACAD Acadia Pharmaceuticals -$0.26
FSK FS KKR Capital $0.61
MWA Mueller Water Products $0.19
AEL American Equity Investment Life $0.76
PRAA PRA $0.73
DOOR Masonite International $1.87
TRIP TripAdvisor $0.24
NHI National Health Investors $0.98
TREX Trex $0.58
IFF International Flavors Fragrances $1.37
ENV Envestnet $0.58
TWO Two Harbors Investment $0.19
CBT Cabot $1.03
PYPL PayPal $1.07

Tuesday (November 9)

IN THE SPOTLIGHT: MIDDLEBY

Middleby, a global leader in the foodservice equipment industry, is expected to report earnings of $2.03 in the third quarter, which represents year-over-year growth of over 50% from $1.34 per share seen in the same period a year ago.

The U.S. foodservice equipment maker will report revenue of $837.32 million, up 32% from the same period a year ago. It is worth noting that the company has always surpassed consensus earnings estimates in the last four quarters.

“The outlook for MIDD appears positive heading into 3Q21 earnings next week, with ITW Food Equipment seeing ~50% growth in restaurant revenue and JBT Foodtech generating+15% organic growth. Restaurant commentary points to investment activity centred around increasing efficiency/productivity, although we could see new builds pushed out due to labour/supply chain constraints,” noted Saree Boroditsky, an equity analyst at Jefferies.

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

Ticker Company EPS Forecast
HAIN Hain Celestial $0.24
IGT International Game Technology $0.53
JHX James Hardie Industries $0.32
HAE Haemonetics $0.61
IIVI Ii Vi $0.83
FSS Federal Signal $0.46
TAC TransAlta USA $0.11
WRK WESTROCK $1.17
STWD Starwood Property $0.52
CAH Cardinal Health $1.33
PLTR Palantir Technologies Inc. $0.04
DHI DR Horton $3.39
SGMS Scientific Games $0.37
ELY Callaway Golf $0.03
OCGN Ocugen -$0.04
SEAS SeaWorld Entertainment $1.66
SATS EchoStar $0.33
ITCI Intra Cellular Therapies -$0.90
MIDD Middleby $2.03
EC Ecopetrol $2,315.76
ADT ADT $0.08
SYY Sysco $0.86
G Genpact $0.56
JAZZ Jazz Pharmaceuticals $3.31
RNG RingCentral $0.33
TTEC TeleTech $0.84
NSTG NanoString Technologies -$0.55
LGND Ligand Pharmaceuticals $1.07
BAK Braskem $2.34
EPAY Bottomline Technologies $0.25
PAAS Pan American Silver USA $0.35
NUVA NuVasive $0.54
CNNE Cannae $0.09
COKE Coca Cola Bottlingconsolidated $7.86
PAY VeriFone Systems $0.01
CCXI ChemoCentryx -$0.45
SWX Southwest Gas $0.13
DAR Darling Ingredients $0.82
ASH Ashland $1.34
EDU New Oriental Education Tech -$0.05
GOL Gol Linhas Aereas Inteligentes -$1.01

Wednesday (November 10)

IN THE SPOTLIGHT: WALT DISNEY

Walt Disney, a family entertainment company, is expected to report its fiscal fourth-quarter earnings of $0.44 per share, which represents year-over-year growth of over 320% from a loss of -$0.20 per share seen in the same period a year ago.

The family entertainment company would post revenue growth of 28% to $18.8 billion. The company has beaten earnings per share (EPS) estimates all times in the last four quarters, according to ZACKS Research.

As of July, Disney+ and Hotstar had more than 116 million subscribers, while Hulu and ESPN+ combined had more than 57 million subscribers. Barclays analysts cite slowing growth and the fact that Disney+ produces far less new content than Netflix, as reasons for their scepticism. Disney+ claims to have 250 million subscribers by 2024, Fobes reported.

“We see Disney on the shortlist of global streaming majors. Despite significant continued upward earnings revisions, shares have lagged as net adds expectations ran ahead of content deliveries. As the content pipeline builds into ’22 and ’23, core net adds should accelerate, driving shares,” noted Benjamin Swinburne, equity analyst at Morgan Stanley.

Disney is building content assets that enable it to take advantage of the significant direct-to-consumer streaming opportunity ahead. Disney’s underlying IP remains best-in-class, supporting long term content monetization opportunities. During this period of FCF pressure from Parks closures, ESPN’s FCF generation is key to driving down leverage. Historical cycles suggest a potential return to above prior peak US Parks revenues in FY23.”

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

Ticker Company EPS Forecast
AY Atlantica Yield $0.60
PRGO Perrigo $0.65
ADNT Adient PLC -$0.75
WWW Wolverine World Wide $0.61
ENR Energizer $0.72
GIB CGI Group USA $1.08
AER AerCap $2.22
ELP Companhia Paranaense De Energia $0.66
MSGS Madison Square Garden Sports -$1.30
PAM Pampa Energia $0.93
BRKS Brooks Automation USA $0.77
YPF YPF $0.31
ENS Enersys $1.07
EBR Centrais Eletricas Brasileiras $0.25
FICO Fair Isaac $3.18
CCMP Cabot Microelectronics $1.87
DIS Walt Disney $0.52
BRFS BRF $0.03
ATO Atmos Energy $0.34
KGC Kinross Gold USA $0.06

Thursday (November 11)

Ticker Company EPS Forecast
CAE Cae USA $0.16
GFI Gold Fields $0.21
AEG Aegon -$0.02
TPR Tapestry Inc $0.70
BAM Brookfield Asset Management USA $0.83
EPC Edgewell Personal Care $0.84
UTZ Utz Brands $0.16
FLO Flowers Foods $0.25
CELH Celsius $0.06
SBH Sally Beauty $0.52
MT Arcelormittal $4.01
PVG Pretium Resources $0.16
SBS Companhia De Saneamento Basico $0.19
BLFS BioLife Solutions -$0.07

Friday (November 12)

IN THE SPOTLIGHT: ASTRAZENECA

The British-Swedish pharmaceutical giant AstraZeneca is expected to report earnings per share of GBP 92.54 in the third quarter on revenue of GBP 7.04 billion.

“We expect Q3’21 sales to reflect lower levels of cancer diagnoses and VBP pressures in China, with the gross margin continuing to be impacted by COVID-19 vaccine sales and changes in product mix. With collaboration revenues / OOI phased into 4Q21, consensus Q3’21 earnings appear c.8% too high,” noted Mark D Purcell, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 12

Ticker Company EPS Forecast
MFG Mizuho Financial $0.08
SMFG Sumitomo Mitsui Financial $0.20
CIG Companhia Energetica Minas Gerais $0.07
SPB Spectrum Brands $0.79
ROLL Rbc Bearings $1.05

 

Wall Street Retreats From Record Highs on Taper Concerns

All three major U.S. stock indexes extended their declines after hawkish commentary from Dallas Fed President Robert Kaplan and a blast outside the Kabul airport in Afghanistan helped fuel the risk-off sentiment.

Kaplan, who is not currently a voting member of the Federal Open Markets Committee, said he believes the progress of economic recovery warrants tapering of the Fed’s asset purchases to commence in October or shortly thereafter.

Kaplan’s remarks followed earlier comments from the St. Louis Fed President James Bullard, who said that the central bank is “coalescing” around a plan to begin tapering process.

“There’s a lot of focus over what will come out of Jackson Hole meeting,” said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis. “Whether we will see new information regarding inflection point in (Fed) policy or whether that will be deferred to the next meeting in September.”

Regarding the recovery, the economy grew at a slightly faster pace than originally reported in the second quarter, fully recovering its losses from the most abrupt downturn in U.S. history, according to the Commerce Department. But jobless claims, though still on a downward trajectory, ticked higher last week.

The data did little to move the needle with respect to expectations that the Fed is unlikely tip its hand regarding the taper timeline when Chairman Jerome Powell unmutes and delivers his speech at Friday’s virtual Jackson Hole Symposium.

“We’re transitioning between two horizons, the first being the reopening of the economy,” Northey added. “There’s little question that the data is strong across the U.S. economy.

“Horizon two is when we get back to economic normalization,” he continued. “There’s concert about the Delta variant extending the timeline between horizon one and horizon two.”

The Dow Jones Industrial Average fell 89.35 points, or 0.25%, to 35,316.15, the S&P 500 lost 13.6 points, or 0.30%, to 4,482.59 and the Nasdaq Composite dropped 33.42 points, or 0.22%, to 15,008.44.

Of the 11 major sectors in the S&P 500, all but real estate were in the red, with energy stocks suffering the steepest percentage loss after several sessions of strong gains.

Discount retailers Dollar General Corp and Dollar Tree Inc tumbled 3.8% and 11.9%, respectively, after warning higher transportation costs will hurt their bottom lines.

Coty Inc jumped 14.8% after the cosmetics firm said it expects to post full-year sales growth for the first time in three years.

Salesforce.com Inc hiked its earnings forecast as the shift to a hybrid work model is expected to fuel strong demand. Its shares advanced 4.9%.

NetApp Inc jumped 5.6% as brokerages raised their price targets in the wake of the cloud computing firm’s better-than expected 2022 earnings outlook.

Declining issues outnumbered advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favored decliners.

The S&P 500 posted 29 new 52-week highs and two new lows; the Nasdaq Composite recorded 74 new highs and 33 new lows.

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

(Reporting by Stephen Culp; Additional reporting by Devik Jain in Bengaluru; Editing by Marguerita Choy)

 

Coty to Acquire 20% Stake in Kim Kardashian West; Shares Jump Over 12%

Coty Inc, an American multinational beauty company, has announced that it will acquire 20% stake in Kim Kardashian West’s beauty business worth $200 million, sending shares of the cosmetics maker up over 12%.

The value of the deal is about $1 billion, as first reported by the FT, which is just below the $1.2 billion Coty put on West’s younger sister Kylie Jenner’s business when it acquired a 51% stake in January.

The cosmetics maker is saddled with billions of dollars of debt following slow sales due to salon closures worldwide amid coronavirus crisis. In order to ease some burden, the company has offloaded a majority stake in its hair and nail care business for $3 billion in May.

The acquisition is expected to close in the third quarter of FY21. All the business’ products will be sold through leading luxury beauty retailers as well as owned digital channels. After the announcement, Coty shares gained over 12% to $4.70 in pre-market New York trading on Monday.

Coty outlook and price target

Seven analysts forecast the average price in 12 months at $6.00 with a high of $8.00 and a low of $5.00. The average price target represents a 43.54% increase from the last price of $4.18, according to Tipranks. From those seven, one analyst rated ‘Buy’, six rated ‘Hold’ and none rated ‘Sell’.

Morgan Stanley target price is $6 with a high of $10 under a bull scenario and $2 under the worst-case scenario. Coty Inc has received a consensus rating of “Hold” from the sixteen rating firms that are currently covering the stock, as per MarketBeat Rating report.

The average yearly target among equity analysts were $8.58. Stifel cuts price target to $6 from $7. Last month, Jefferies lowered its price target to $5 from $5.50, Citigroup cuts price target to $3.1 from $4 and Deutsche Bank cuts target price to $6 from $8. On the other hand, 50-day Moving Average and 100-200-day MACD Oscillator signals a strong selling opportunity.

Analyst comment

“We remain Equal-weight on Coty with weak underlying fundamentals reflected in valuation,” wrote Dara Mohsenian, equity analyst at Morgan Stanley in his last month’s note.

“Long-term, we expect a gradual improvement to slight Coty organic sales growth, well below peers, after a severe near-term COVID-19 impact. COTY trades at a valuation discount to more attractive beauty peers, which we believe properly reflects COTY’s suboptimal beauty positioning, near-term execution risk, low earnings visibility, and high net debt/LTM EBITDA leverage,” he added.