European Equities: A Quiet Economic Calendar Leaves Inflation and COVID-19 in Focus

Economic Calendar

Monday, 30th August

Spanish HICP (YoY) (Aug) Prelim

German CPI (MoM) (Aug) Prelim

Tuesday, 31st August

French Consumer Spending (MoM) (Jul)

French GDP (QoQ) (Q2)

German Unemployment Change (Aug)

German Unemployment Rate (Aug)

Italian CPI (MoM) (Aug) Prelim

Eurozone CPI (YoY) (Aug) Prelim

Wednesday, 1st September

German Retail Sales (MoM) (Jul)

Spanish Manufacturing PMI (Aug)

Italian Manufacturing PMI (Aug)

French Manufacturing PMI (Aug) Final

German Manufacturing PMI (Aug) Final

Eurozone Manufacturing PMI (Aug) Final

Eurozone Unemployment Rate (Jul)

Friday, 3rd September

Spanish Services PMI (Aug)

Italian Services PMI (Aug)

French Services PMI (Aug) Final

German Services PMI (Aug) Final

Eurozone Markit Composite PMI (Aug) Final

Eurozone Services PMI (Aug) Final

Eurozone Retail Sales (MoM) (Jul)

The Majors

It was a relatively bullish end to the week for the European majors on Friday.

The CAC40 rose by 0.24%, with the DAX30 and the EuroStoxx600 ending the day up by 0.37% and by 0.43% respectively.

There were no major stats from the Eurozone to provide the majors with direction early in the European session.

Economic data from the U.S also took a back seat, with the markets awaiting FED Chair Powell’s scheduled speech late in the day.

A dovish stance on monetary policy delivered support for the majors on the day, with Powell closing the door on any near-term talk of rate hikes.

The Stats

There were no major stats from the Eurozone.

From the U.S

Inflation and personal spending figures delivered mixed results ahead of FED Chair Powell’s scheduled speech.

In July, the Core PCE Price Index increased by 3.6%, year-on-year, with the index rising by 0.3%, month-on-month. In June, the index had also risen by 3.6% year-on-year, while having risen by 0.5%, month-on-month. The numbers were in line with forecasts.

Personal spending saw a modest 0.3% increase in July, however, after having risen by 1.1% in June. Economists had also forecast a 0.3% rise.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Continental and Daimler ended the day up by 0.84% and by 0.87% respectively, with BMW rising by 0.17%. Volkswagen saw a modest 0.05% increase on the day.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.61% and by 0.42% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole fell by 0.39% and by 0.07% respectively, while Soc Gen rose by 0.32%.

It was a bullish day for the French auto sector. Stellantis NV and Renault saw gains of 0.20% and 0.58% respectively.

Air France-KLM fell by 0.52%, while Airbus SE ended the day up by 0.02%.

On the VIX Index

It was back into the red for the VIX on Friday.

Reversing a 12.21% jump from Thursday, the VIX slid by 13.00% to end the day at 16.39.

The NASDAQ rallied by 1.23%, with the Dow and the S&P500 ending the day up by 0.69% and by 0.88% respectively.

VIX 300821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Prelim August inflation figures for Spain and Germany will be in focus.

Softer numbers would deliver the majors with support on the day.

From the U.S, pending home sales numbers are due out late in the day but should have a muted impact on the majors.

Away from the economic calendar, COVID-19 news updates from the weekend will also need considering.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 15 points.

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

Earnings Week Ahead: Zoom, Nordson, Five Below and MongoDB in Focus

Earnings Calendar For The Week Of August 30

Monday (August 30)

IN THE SPOTLIGHT: ZOOM, NORDSON

ZOOM: The San Jose, California-based communications technology company is expected to report its second-quarter earnings of $1.16 per share, which represents year-over-year growth of over 26% from $0.92 per share seen in the same period a year ago.

The company, which provides video telephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of about 50% to $990.2 million. Zoom will report 2Q FY22 earnings after market close on Monday, August 30th.

Zoom expects to report revenue of $985 million to $990 million and adjusted earnings of $1.14 to $1.15 per share in the second quarter. In its full-year guidance, the company now expects revenue of $3.98 billion – $3.99 billion, and adjusted earnings of $4.56 – $4.61 per share.

“Continuation of WFH and structural increase in usage of video, progress in Phone, and pending FIVN acq supports Zoom Video Communications’ (ZM) longer-term platform opportunities. With Delta variant likely slowing NT churn, FQ2 expectations skew high. Remain EW but positively inclined w/ next legs of growth coming into view,” noted Meta A Marshall, equity analyst at Morgan Stanley.

Zoom has established its position as the newly emerged leader in video conferencing, now a growth market, largely credible to the company itself given an introduction of a solution that employees actually use. The company has a meaningful competitive moat built on more than just architecture, but a rapid uptick in video usage has attracted significant investment efforts from competitors. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins are encouraging. Expanding platform with pending FIVN acquisition. Environment post-COVID and large-scale WFH, and timing to reach, less certain.”

NORDSON: The Westlake, Ohio-based medical device manufacturer is expected to report its fiscal third-quarter earnings of $2.07 per share, which represents year-over-year growth of over 45% from $1.42 per share seen in the same period a year ago.

The maker of adhesives and industrial coatings would post revenue growth of about 12% to $600 million. Nordson will report 3Q FY21 earnings on Monday, August 30th. It is important to note that the company beat consensus expectations for EPS four times in a row. Monday’s better-than-expected results could help the stock hit new all-time highs.

“We are tactically constructive into Nordson’s (NDSN) 3Q21 earnings release next week, as we see the likelihood for a 3Q21 beat and full-year guidance raise. Additionally, we think NDSN’s favourable exposure to electronic components shortages (more an upside opportunity than downside risk) is differentiated,” noted Connor Lynagh, equity analyst at Morgan Stanley.

“We are making moderate revisions to our prior estimates, largely reflecting our incrementally positive outlook on NDSN’s end-markets. The impact on our long-term estimates is limited, with FY21 EBITDA only ~3% higher. Near-term, we have raised our 3Q consolidated revenue growth by ~400bps, with ATS ~700bps higher. Consequently, 3Q revenue is ~3% above prior, with EBITDA ~5% higher as well.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 30

Ticker Company EPS Forecast
LI Li Auto $0.00
CTLT Catalent $1.10
ZM Zoom Video Communications $1.16
NDSN Nordson $2.07
BACHY Bank China ADR $0.84
CEA China Eastern Airlines -$1.34
ADOOY Adaro Energy ADR $0.12

Tuesday (August 31)

Ticker Company EPS Forecast
NTES NetEase $6.16
ALXN Alexion Pharmaceuticals $3.43
IMAB I Mab -$1.24
EGFEY Eurobank Ergasias S.A. ADR $0.01
CRWD CrowdStrike Holdings Inc. Cl A $0.09
PVH PVH $1.20
AMBA Ambarella $0.25

Wednesday (September 1)

IN THE SPOTLIGHT: FIVE BELOW

The Philadelphia, Pennsylvania-based discount retailer Five Below is expected to report its second-quarter earnings of $1.11 per share, which represents year-over-year growth of over 45% from $0.50 per share seen in the same period a year ago.

The popular discount store retailer that sells products that cost up to $5 would post revenue growth of more than 50% to $656 million. Five Below will report 2Q FY21 earnings after market close on Wednesday, Sept 1. It is important to note that the company beat consensus expectations for EPS four times in a row.

Five Below’s (FIVE) profile among pure B&M retailers is nearly unmatched (20% top/bottom-line growth, no debt). It’s driven by a differentiated, defensible model focused on extreme value merchandise across diverse categories. FIVE is exiting the COVID-19 pandemic as a fundamentally stronger and more relevant business, with best-in-class growth characteristics, various company-specific initiatives in place, and solid liquidity,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“However, valuation is near peak the stock seems fairly valued, in our view, with a balanced risk/reward skew. White space store growth (>50% unit runway remaining) and multi-year track record of ~20% square footage growth with >90% productivity.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 1

Ticker Company EPS Forecast
CPB Campbell Soup $0.47
GEF Greif $1.54
VEEV Veeva Systems $0.87
SMTC Semtech $0.62
FIVE Five Below $1.11

Thursday (September 2)

IN THE SPOTLIGHT: MONGODB

MongoDB Inc, which provides an open-source database platform for automating, monitoring, and deployment backups, is expected to report a loss of $0.39 per share in the second quarter, worse than -$0.22 per share seen in the same quarter a year ago.

However, the New York City-based company would post year-over-year revenue growth of over 30% to $182.4 million.

MongoDB has established itself as one of the most popular databases to support the development of modern net-new apps. Into CY21, we see the business at a crucial inflection point. First, it is poised to garner the majority of revs from its public cloud business – the segment where market growth and share gains are the strongest,” noted Sanjit Singh, equity analyst at Morgan Stanley.

“Second, the acceleration in customer adds suggests that its go-to-market model has matured to scale a modern, cloud-first business.  As a result, an equation for durable 30%+ growth emerges (20%+ customer base growth with near 120% net expansion from the existing base) – a growth story that does not look overly demanding given the strategic nature of this asset.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 2

Ticker Company EPS Forecast
BDEV Barratt Developments £32.00
CIEN Ciena $0.80
SIG Signet Jewelers $1.62
AEO American Eagle Outfitters $0.54
TTC Toro $0.77
HRL Hormel Foods $0.40
SAIC Science Applications International $1.47
GWRE Guidewire Software $0.24
AVGO Avago Technologies $6.88
COO Cooper Companies $3.29
PDCO Patterson Companies $0.37
MDB MongoDB Inc -$0.39
SMAR Smartsheet Inc. -$0.13
CLDR Cloudera Inc. $0.10
PD PagerDuty Inc. -$0.15
GMS GMS Inc. $1.26
DCI Donaldson $0.66
HPE Hewlett Packard $0.42
BRC Brady $0.71

Friday (September 3)

No major earnings are scheduled for release.

European Equities: A Week in Review – 20/08/21

The Majors

It was a relatively bullish week for the majors in the week ending 27th August. Compared with the prior week’s losses, the gains were modest, however.

The DAX30 rose by 0.28%, with the DAX30 and the EuroStoxx600 ending the week up by 0.84% and by 0.76% respectively.

Private sector PMIs and economic data from Germany tested support for the DAX30 in particular.

While economic data from the U.S was mixed in the week, market focus was towards FED Chair Powell’s policy speech at the end of the week.

Uncertainty over FED policy had pegged the majors back in the week. FED Chair Powell’s speech delivered support for riskier asset, with the DAX30 reversing losses from earlier in the week.

Concerns over the continued rise in the number of Delta variant cases worldwide was a negative for the majors, however.

The Stats

Prelim private sector PMIs for August and the German economy were in focus, with the stats skewed to the negative.

Germany’s manufacturing PMI fell from 65.9 to 62.7, with the services PMI declining from 61.8 to 61.5.

For France, the manufacturing PMI fell from 58.0 to 57.3, with the services PMI falling from 56.8 to 56.4.

As a result, the Eurozone’s manufacturing PMI fell from 62.8 to 61.5. The services PMI slipped from 59.8 to 59.7.

From Germany, the economy grew by 1.6% in the 2nd quarter, coming in ahead of a forecasted 1.5%. Year-on-year, the economy grew by 9.8%. Year-on-year, the economy had contracted by 3.4% in the previous quarter.

While the GDP numbers were upbeat, business and consumer sentiment disappointed.

Germany’s IFO Business Climate Index fell from 100.7 to 99.4, with the GfK Consumer Climate Indicator falling from -0.40 to -1.20.

From the U.S

Early in the week, private sector PMIs were in focus. Weaker numbers weighed, with the Services PMI falling from 59.9 to 55.2 in August, according to prelim figures.

On Wednesday, core durable goods rose by 0.7% in July, following a 0.6% increase in June, which was a positive.

2nd quarter GDP numbers were also revised up on Thursday. In the 2nd quarter, the economy grew by 6.6%, which was up from a 6.5% first estimate.

Jobless claims disappointed, however, with initial jobless claims rising from 349k to 353k.

At the end of the week, personal spending and inflation figures delivered mixed results.

In July, the Core PCE Price Index rose by 3.6% year-on-year, which was in line with forecasts and June figures. Month-on-month, the index rose by 0.3% following a 0.5% increase in June.

Personal spending disappointed, however, with spending up by just 0.3%. Spending had risen by 1.1% in June.

While the stats did influence, FED Chair Powell’s speech on Friday was the main event of the week…

The FED Chair Powell delivered what the markets were looking for, weighing on the Dollar while supporting riskier assets. In line with expectations, Powell talked of tapering later in the year but highlighted that tapering did not mean tightening and that it would not translate into a shift in policy on interest rates…

The Market Movers

From the DAX, it was a bullish week for the auto sector. Volkswagen rallied by 4.03% to lead the way, with Continental and Daimler ending the week up by 2.05% and by 2.20% respectively. BMW saw a more modest 1.58% gain in the week.

It was also a bullish week for the banking sector. Deutsche Bank and Commerzbank rose by 0.67% and by 2.13% respectively.

From the CAC, it was a bullish week for the banks. Credit Agricole and Soc Gen rallied by 3.06% and by 3.61% respectively, with BNP Paribas rising by 2.61%.

It was a mixed week for the French auto sector, however. Stellantis NV slipped by 0.09%, while Renault eked out a 0.06% gain.

Air France-KLM and Airbus ended the week with gains of 5.40% and 4.11% respectively.

On the VIX Index

It was a back into the red for the VIX in the week ending 27th August, marking a 4th weekly loss in 6-weeks.

Partially reversing a 20.13% rise from the previous week, the VIX fell by 11.69% to end the week at 16.39.

3-days in the red from 5 sessions, which included a 7.60% fall on Monday and a 13.00% slide on Friday delivered the downside. A 12.21% rise on Thursday limited the downside, however.

For the week, the NASDAQ rallied by 2.82%, with the Dow and the S&P500 ending the week up by 0.96% and by 1.52% respectively.

VIX 280821 Weekly Chart

The Week Ahead

It’s another busy week ahead on the economic calendar.

On Tuesday, French consumer spending and 2nd quarter GDP numbers are due out along with German unemployment data.

Expect the GDP and unemployment figures to be of greater influence.

On Wednesday, German retail sales and Spanish and Italian manufacturing PMIs are due out. Finalized numbers for France, Germany, and the Eurozone will also draw attention, however.

Barring marked revisions to prelim numbers, Italy and the Eurozone’s PMIs and German retail sales will be key.

At the end of the week, service sector PMIs will also be in focus.

From the U.S, there’s also plenty to consider…

In the first half of the week, consumer sentiment, ADP nonfarm employment, and ISM Manufacturing PMI figures are in focus.

Expect the consumer sentiment and ADP numbers to be key.

In the 2nd half of the week, the focus will shift to the jobless claim figures on Thursday.

Wrapping things up, however, will be the nonfarm payrolls for August. Another surge in hiring could be the green light for the FED to make a move.

From China, private sector PMIs for August will also influence… On, Wednesday, the Caixin Manufacturing PMI will be the key stat of the week.

Away from the economic calendar, COVID-19 news updates and monetary policy chatter will also need monitoring.

Five Below Q2 Earnings to More Than Double, Revenue to Jump Over 50%

The Philadelphia, Pennsylvania-based discount retailer Five Below is expected to report its second-quarter earnings of $1.11 per share, which represents year-over-year growth of over 45% from $0.50 per share seen in the same period a year ago.

The popular discount store retailer that sells products that cost up to $5 would post revenue growth of more than 50% to $656 million. Five Below will report 2Q FY21 earnings after market close on Wednesday, Sept 1. It is important to note that the company beat consensus expectations for EPS four times in a row.

Five Below shares have gained over 23% so far this year. However, the stock fell about 4% to $216.04 on Friday.

Analyst Comments

Five Below’s (FIVE) profile among pure B&M retailers is nearly unmatched (20% top/bottom-line growth, no debt). It’s driven by a differentiated, defensible model focused on extreme value merchandise across diverse categories. FIVE is exiting the COVID-19 pandemic as a fundamentally stronger and more relevant business, with best-in-class growth characteristics, various company-specific initiatives in place, and solid liquidity,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“However, valuation is near peak the stock seems fairly valued, in our view, with a balanced risk/reward skew. White space store growth (>50% unit runway remaining) and multi-year track record of ~20% square footage growth with >90% productivity.”

Five Below Stock Price Forecast

Fourteen analysts who offered stock ratings for Five Below in the last three months forecast the average price in 12 months of $236.33 with a high forecast of $300.00 and a low forecast of $185.00.

The average price target represents a 9.30% change from the last price of $216.22. From those 14 analysts, eight rated “Buy”, six rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $230 with a high of $300 under a bull scenario and $140 under the worst-case scenario. The firm gave an “Equal-weight” rating on the discount retailer’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to $230 from $210. Deutsche Bank lifted the price target to $271 from $254. Berenberg upped the target price to $185 from $181.

Nordson Could Scale to Fresh Record High on Strong Q3 Earnings; Target Price $265

The Westlake, Ohio-based medical device manufacturer Nordson is expected to report its fiscal third-quarter earnings of $2.07 per share, which represents year-over-year growth of over 45% from $1.42 per share seen in the same period a year ago.

The maker of adhesives and industrial coatings would post revenue growth of about 12% to $600 million. Nordson will report 3Q FY21 earnings on Monday, August 30th. It is important to note that the company beat consensus expectations for EPS four times in a row.

Nordson shares have gained over 16% so far this year. The stock hit an all-time high of $235.78 on Friday, trading 0.72% higher.

Analyst Comments

“We are tactically constructive into Nordson’s (NDSN) 3Q21 earnings release next week, as we see the likelihood for a 3Q21 beat and full-year guidance raise. Additionally, we think NDSN’s favourable exposure to electronic components shortages (more an upside opportunity than downside risk) is differentiated,” noted Connor Lynagh, equity analyst at Morgan Stanley.

“We are making moderate revisions to our prior estimates, largely reflecting our incrementally positive outlook on NDSN’s end-markets. The impact on our long-term estimates is limited, with FY21 EBITDA only ~3% higher. Near-term, we have raised our 3Q consolidated revenue growth by ~400bps, with ATS ~700bps higher. Consequently, 3Q revenue is ~3% above prior, with EBITDA ~5% higher as well.”

Nordson Stock Price Forecast

Two analysts who offered stock ratings for Nordson in the last three months forecast the average price in 12 months of $265.50 with a high forecast of $276.00 and a low forecast of $255.00.

The average price target represents a 13.14% change from the last price of $234.66. All those two analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $230 with a high of $260 under a bull scenario and $160 under the worst-case scenario. The firm gave an “Equal-weight” rating on the company’s stock.

Several other analysts have also updated their stock outlook. D.A. Davidson raised the target price raised to $255 from $250. Berenberg lifted the target price to $275 from $265. Wells Fargo upped the price target to $245 from $230.

Check out FX Empire’s earnings calendar

European Equities: With no Major Stats from the Eurozone it is all Eyes on FED Chair Powell

The Majors

It was a bearish day for the European majors on Thursday.

The CAC40 slipped by 0.16%, with the DAX30 and the EuroStoxx600 falling by 0.42% and by 0.32% respectively.

Economic data was on the lighter side, with the German consumer sentiment figures. Disappointing consumer confidence from Germany tested support for the majors.

With the Jackson Hole Symposium underway, apprehension ahead of FED Chair Powell’s speech later today also weighed.

Economic data from the U.S had a muted impact, however, later in the European session.

The Stats

It was a quieter economic calendar through the European session.

Germany’s GfK Consumer Climate was in focus early in the session.

In September, the GfK Consumer Climate Index fell from -0.4 to -1.2. Economists had forecast a decline to -0.7.

According to the August report,

  • In August, while income expectations improved slightly, both economic expectations and propensity to buy waned.
  • As a result, the GfK is forecasting a value of -1.2 points in consumer sentiment for September.
  • According to the GfK, there was also an increase in propensity to save.
  • Concerns over COVID-19 weighed on sentiment and the September forecast.
  • Additionally, the GfK noted that inflation is playing a role, with the cost of living up 3.8% in July, year-on-year.
  • In June, sentiment had hit a 10-year high before retreating.

From the U.S

Weekly jobless claims and 2nd estimate GDP numbers were of little influence later in the session.

In the week ending 20th August, initial jobless claims rose from 349k to 353k. Economists had forecast claims of 350k.

According to 2nd estimates, the U.S economy grew by 6.6% in the 2nd quarter, which was up from a 1st estimate 6.1%. Economists had forecast growth of 6.8%, quarter-on-quarter.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen bucked the trend, rising by 0.24%. Continental and Daimler ended the day down by 0.28% and by 0.46% respectively, with BMW falling by 0.04%.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 2.04% and by 1.31% respectively.

From the CAC, it was a relatively bearish day for the banks. BNP Paribas and Credit Agricole fell by 0.89% and by 0.67% respectively, with Soc Gen declining by 0.95%.

It was also a bearish day for the French auto sector. Stellantis NV and Renault saw losses of 0.93% and 1.21% respectively.

Air France-KLM and Airbus SE ended the day down by 1.74% and by 0.79% respectively.

On the VIX Index

It was back into the green for the VIX on Thursday.

Reversing a 2.50% fall from Wednesday, the VIX rose by 12.21% to end the day at 18.84

The NASDAQ fell by 0.64%, with the Dow and the S&P500 ending the day down by 0.54% and by 0.58% respectively.

VIX 270821 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar. There are no material stats to provide the European majors with direction on the day.

The lack of stats will leave the majors firmly in the hands of FED Chair Powell. Powell is scheduled to speak later today.

Economic data from the U.S, will draw attention, however. Inflation and personal spending figures will be key ahead of Powell’s speech.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 65 points.

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

Zoom Q2 Earnings to Rise Over 26%, Revenue to Jump Nearly 50%

The San Jose, California-based communications technology company Zoom is expected to report its second-quarter earnings of $1.16 per share, which represents year-over-year growth of over 26% from $0.92 per share seen in the same period a year ago.

The company, which provides video telephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of about 50% to $990.2 million. Zoom will report 2Q FY22 earnings after market close on Monday, August 30th.

Zoom expects to report revenue of $985 million to $990 million and adjusted earnings of $1.14 to $1.15 per share in the second quarter. In its full-year guidance, the company now expects revenue of $3.98 billion – $3.99 billion, and adjusted earnings of $4.56 – $4.61 per share.

Zoom shares have been range-bound so far this year. The stock ended 0.74% lower at $337.74 on Wednesday.

Analyst Comments

“Continuation of WFH and structural increase in usage of video, progress in Phone, and pending FIVN acq supports Zoom Video Communications’ (ZM) longer-term platform opportunities. With Delta variant likely slowing NT churn, FQ2 expectations skew high. Remain EW but positively inclined w/ next legs of growth coming into view,” noted Meta A Marshall, equity analyst at Morgan Stanley.

Zoom has established its position as the newly emerged leader in video conferencing, now a growth market, largely credible to the company itself given an introduction of a solution that employees actually use. The company has a meaningful competitive moat built on more than just architecture, but a rapid uptick in video usage has attracted significant investment efforts from competitors. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins are encouraging. Expanding platform with pending FIVN acquisition. Environment post-COVID and large-scale WFH, and timing to reach, less certain.”

Zoom Stock Price Forecast

Twenty-one analysts who offered stock ratings for Zoom Video Communications in the last three months forecast the average price in 12 months of $421.75 with a high forecast of $495.00 and a low forecast of $345.00.

The average price target represents a 24.87% change from the last price of $337.74. From those 21 analysts, 10 rated “Buy”, 11 rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $360 with a high of $480 under a bull scenario and $240 under the worst-case scenario. The firm gave an “Equal-weight” rating on the communications software company’s stock.

Several other analysts have also updated their stock outlook. BTIG slashed the stock price forecast to $495 from $550. Deutsche Bank raised the target price to $375 from $360. JPMorgan lowered the target price to $385 from $456.

Check out FX Empire’s earnings calendar

European Equities: Economic Data from Germany and the U.S and the FED in Focus

Economic Calendar

Thursday, 26th August

GfK German Consumer Climate (Sep)

The Majors

It was another mixed day for the European majors on Wednesday.

The DAX30 fell by 0.28%, while the CAC40 and the EuroStoxx600 saw gains of 0.18% and 0.01% respectively.

Economic data was on the lighter side, with the German economy in focus once more. Disappointing business sentiment figures from Germany weighed on the DAX30.

With the Jackson Hole Symposium kicking off today, there was also plenty of caution, pegging the majors back.

While the markets are betting that the FED will kick the policy can further road, it’s not been a sure thing on the tapering front.

Rising delta variant cases globally have also raised concerns over the economic outlook as some economies trail on vaccination rates.

The Stats

It was a quieter economic calendar through the European session.

Germany’s IFO Business Climate Index figures were in focus early in the session.

In August, the Business IFO Business Climate Index fell from 100.7 to 99.4. Economists had forecast a decline to 100.4.

The decline came in spite of a pickup in business sentiment towards the current situation. In August, the Current Assessment sub-index increased from 100.4 to 101.4.

Weighing on the headline number was business expectations, which fell from 101.0 to 97.5.

According to the August survey,

  • In the manufacturing sector, the business climate has deteriorated noticeably. The assessment of the current situation was less positive. While companies were still satisfied with the day-to-day business, the outlook for the coming months hit reverse. The expectation indicator fell to its lowest level since November 2020.
  • For the services sector, optimism with regards to the future business development has been dampened. By contrast, the companies assessed the current situation as better than in the previous month.
  • Traders were less satisfied with their current business situation. Additionally, pessimism returned with regard to expectations. The retail sector was particularly concerned about the months ahead.

From the U.S

Durable and core durable goods orders also influenced.

Durable goods orders fell by 0.1% in July, partially reversing a 0.9% increase from June. Economists had forecast a 0.3% decline. Core durable goods rose by 0.7%, however, versus a forecasted 0.5% increase. In June, core durable goods had risen by 0.6%.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. BMW and Continental fell by 0.57% and by 0.17% respectively. Volkswagen and Daimler ended the day up by 0.40% and by 0.09% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 1.36% and by 2.45% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rallied by 2.04% and by 2.44% respectively, with Credit Agricole gaining by 1.38%.

It was also a relatively bullish day for the French auto sector. Stellantis NV and Renault saw modest gains of 0.55% and 0.22% respectively.

Air France-KLM slipped by 0.36%, while Airbus SE rallied by 2.17%.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking a 3rd day in the red from 4 sessions.

Reversing a 0.40% rise on Tuesday, the VIX fell by 2.50% to end the day at 16.79.

The S&P500 rose by 0.22%, with the Dow and the NASDAQ ending the day up by 0.11% and by 0.15% respectively.

VIX 260821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Consumer sentiment figures for Germany will be in focus in the early part of the session.

While the numbers will provide the DAX30 with direction, we can expect the markets to be tentative ahead of the Symposium.

Later in the day, initial jobless claims and GDP numbers from the U.S will provide the majors with direction.

With the Symposium getting underway, a marked fall in jobless claims could test the market’s dovish bets…

Ultimately, any chatter from the Symposium will be the key driver on the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 21 points.

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

Preview: Dollar General Q2 Earnings to Decline 17%

Dollar General, the US’ largest discount retailer by the number of stores, is expected to report a profit of $2.59 in the second quarter, which represents a year-over-year decline of about 17% from $3.12 per share seen in the same period a year ago.

The company’s revenue would also decline 1.5% to 8.56 billion. On average, the company has delivered an earnings surprise of over 9% in the last four consecutive quarters.

Analysts expect earnings per share of $10.18 for the fiscal year, versus $10.62 last year. Revenue is expected to come in at $34.10 billion, compared with $33.75 billion last year.

Dollar General shares have gained over 10% so far this year. The stock ended 0.80% lower at $232.75 on Tuesday.

Analyst Comments

Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. Recent high-quality results add more confidence to the 10% L-T EPS growth algorithm, ramping top-line initiatives appear sustainable, and we see underappreciated margin upside from the rollout of Fresh self-distribution,” noted Simeon Gutman, equity analyst at Morgan Stanley.

DG’s valuation (high teens P/E multiple) presents a solid entry point as it is in line with its history despite much stronger EPS power (and below DG’s pre-COVID multiple) while a ~5x turn discount to the market. This seems unwarranted given DG’s consistent execution & outlook.”

Dollar General Stock Price Forecast

Nine analysts who offered stock ratings for Dollar General in the last three months forecast the average price in 12 months of $245.78 with a high forecast of $270.00 and a low forecast of $209.00.

The average price target represents a 5.60% change from the last price of $232.75. From those nine analysts, eight rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $225 with a high of $300 under a bull scenario and $150 under the worst-case scenario. The firm gave an “Overweight” rating on the discount retailer’s stock.

Several other analysts have also updated their stock outlook. Telsey Advisory Group raised the target price to $260 from $235. Deutsche Bank lifted the price target to $253 from $231. Oppenheimer upped the target price to $270 from $225.

Check out FX Empire’s earnings calendar

European Equities: German Business Sentiment in Focus Early in the Session

Economic Calendar

Wednesday, 25th August

German Ifo Business Climate Index (Aug)

Thursday, 26th August

GfK German Consumer Climate (Sep)

The Majors

It was a mixed day for the European majors on Tuesday.

The DAX30 rose by 0.33%, while the CAC40 and the EuroStoxx600 saw losses of 0.28% and 0.02% respectively.

Economic data was on the lighter side, with the German economy back in focus. Better than expected GDP numbers from Germany delivered the DAX with the support to buck the trend on the day.

For the broader market, FED uncertainty and concerns over the Delta variant continued to weigh, however.

The Stats

It was a quieter economic calendar through the European session, with German GDP numbers in focus.

In the 2nd quarter, the German economy grew by 1.6%, quarter-on-quarter, recovering from 1st quarter 1.8% contraction. Economists had forecast growth of 1.5%.

According to Destatis, the economy grew by 9.8%, year-on-year, versus a forecasted 9.6%. In the 1st quarter, the economy had contracted by 3.3%.

From the U.S

New home sales figures for July were in focus, which had a muted impact on the European majors.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Tuesday. BMW and Volkswagen led the way, with gains of 2.04% and 2.11% respectively. Continental and Daimler ended the day up by 1.71% and by 1.25% respectively.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank rose by 1.28% and by 0.87% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.68% and by 0.69% respectively, with Soc Gen gaining by 0.59%.

It was also a relatively bullish day for the French auto sector. Stellantis NV and Renault saw modest gains of 0.26% and 0.90% respectively.

Air France-KLM surged by 5.58%, with Airbus SE rising by 1.56%.

On the VIX Index

It was back into the green for the VIX on Tuesday, ending a 2-day losing streak.

Following a 7.60% decline on Monday, the VIX rose by 0.41% to end the day at 17.22.

The NASDAQ rose by 0.52%, with the Dow and the S&P500 ending the day up by 0.09% and by 0.15% respectively.

VIX 250821 Daily Chart

The Day Ahead

It’s another relatively busy day ahead on the Eurozone’s economic calendar. The German economy is back in focus, with Business IFO Climate Index numbers in focus.

With business investment a key component of the economic recovery, the numbers will influence.

From the U.S, durable goods orders and core durable goods orders for July will also provide direction late in the day.

With the Jackson Hole Symposium just around the corner, however, we can expect some caution…

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 3 points.

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

Medtronic Shares Hit Fresh Record High as Q1 Earnings Beat Forecasts; Target Price $142

Medtronic shares hit a fresh record high on Tuesday after the medical device company reported better-than-expected earnings in the fiscal first quarter and lifted its full-year profit guidance.

The Dublin-based company said its first-quarter GAAP net income and diluted earnings per share (EPS) were $763 million and $0.56, respectively, increases of 57% and 56%, respectively. As detailed in the financial schedules included at the end of this release, first quarter non-GAAP net income and non-GAAP diluted EPS were $1.908 billion and $1.41, respectively, increases of 128% and 127%, respectively. That was higher than the Wall Street consensus estimates of $1.32 per share.

The company reported first-quarter worldwide revenue of $7.987 billion, an increase of 23% as reported and 19% on an organic basis, which excludes the $245 million benefit of foreign currency translation. That was higher than the market expectations of $7.8 billion.

Medtronic said the first-quarter results reflect a strong recovery from the impact of the COVID-19 pandemic on elective procedures that the company experienced in 2020.

The company expect revenue growth in its fiscal year 2022 to approximate 9% on an organic basis. If current exchange rates hold, revenue growth in the fiscal year 2022 would be positively affected by approximately $100 to $200 million.

The company increased its fiscal year 2022 diluted non-GAAP EPS guidance from the prior range of $5.60 to $5.75 to the new range of $5.65 to $5.75, including an estimated 5 to 10 cent positive impact from foreign currency exchange versus a 10 to 15 cent positive impact previously.

Following the upbeat results, Medtronic shares hit a fresh record high, rising over 3% to $132.66 on Tuesday. The stocks have gained over 17% so far this year.

Executive Comments

“We’re reiterating our revenue guidance for the year while increasing the lower end of our EPS range on the back of our first-quarter results,” said Karen Parkhill, Medtronic chief financial officer.

“We remain focused on accelerating our long-term revenue growth and generating strong returns for our shareholders. In addition to growing our dividend, we are increasing our investments at the front end of major product launches, growing our R&D spend broadly across the company, and executing disciplined tuck-in acquisitions.”

Analyst Comments

Medtronic (MDT) reported F1Q revenue and EPS of $7.99B and $1.41 compared to Street targets of$7.87B and $1.32 and our estimates of $7.83B and $1.31. Organic sales growth was 19%, exceeding guidance of 17%-18%. For fiscal 2022, MDT continues to expect organic sales growth of 9%. The company raised the low end of its full-year EPS guidance range and now targets $5.65-$5.75 compared to $5.60-$5.75 previously,” noted Joshua Jennings, equity analyst at Cowen.

“For fiscal 2022, the company continues to forecast organic sales growth of 9% despite the unknowns posed by COVID-19 and specifically, the Delta variant. This target was approximately 100 bps ahead of expectations when it was set, and we were not expecting MDT to increase what is already a sufficiently high growth estimate. As such, we believe the reiteration of the full-year sales guidance is favourable and will be well-received by investors.”

Medtronic Stock Price Forecast

Sixteen analysts who offered stock ratings for Medtronic in the last three months forecast the average price in 12 months of $142.73 with a high forecast of $150.00 and a low forecast of $135.00.

The average price target represents a 7.15% change from the last price of $133.20. From those 16 analysts, 14 rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $140 with a high of $158 under a bull scenario and $104 under the worst-case scenario. The firm gave an “Overweight” rating on the medical device company’s stock.

Several other analysts have also updated their stock outlook. BTIG raised the target price to $137 from $135. Guggenheim lifted the price target to $145 from $135. Oppenheimer upped the price target to $147 from $134.

Check out FX Empire’s earnings calendar

European Equities: German GDP Numbers, FED Policy, and COVID-19 in Focus

Economic Calendar

Tuesday, 24th August

German GDP (YoY) (Q2)

German GDP (QoQ) (Q2)

Wednesday, 25th August

German Ifo Business Climate Index (Aug)

Thursday, 26th August

GfK German Consumer Climate (Sep)

The Majors

It was a bullish day for the European majors on Monday.

The DAX30 rose by 0.28%, with the CAC40 and the EuroStoxx600 seeing gains of 0.86% and 0.66% respectively.

Following the previous week’s losses, the majors were in recovery mode. Private sector PMI figures from the Eurozone could have been worse, delivering some comfort.

Ultimately, however, plenty of uncertainty over FED monetary policy and the Delta variant remained negatives for the majors.

The Stats

It was a busier economic calendar through the European session, with private sector PMIs in focus.

According to prelim figures for August, Germany’s manufacturing PMI fell from 65.9 to 62.7. Economists had forecast a decline to 65.0. The services PMI slipped from 61.8 to 61.5 versus a forecasted 61.0.

For France, the manufacturing PMI fell from 58.0 to 57.3, which was in line with forecasts. The Services PMI fell from 56.8 to 56.4. Economists had forecast an increase to 57.0.

The Eurozone’s Manufacturing PMI fell from 62.8 to 61.5, with the Services PMI falling from 59.8 to 59.7. Economists had forecast PMIs of 62.0 and 59.8 respectively. As a result, the Composite PMI fell from 60.2 to 59.5 versus a forecasted 59.7.

According to the Eurozone’s prelim survey,

  • Eurozone business activity continued to grow at a fast pace in August.
  • The rate of expansion cooled only slightly despite supply chain delays.
  • Growth sector growth exceeded that of the manufacturing sector for the first time since the pandemic.
  • Firms’ costs and prices charged rose at some of the fastest rates seen over the past 20-years.
  • Business confidence was subdued as a result of the Delta variant.
  • In spite of softer confidence, hiring remained the strongest for 21-years.
  • Inflows of new orders were amongst the highest seen in the past two decades.
  • Within the Eurozone, Germany continued to lead the expansion. This was in spite of growth softening from July’s 23-year record high.

Late in the European session, consumer confidence figures for the Eurozone also influenced.

In August, the Eurozone’s Consumer Confidence Indicator fell from -4.4 to -5.3. Economists had forecast a decline to -5.0.

From the U.S

Prelim private sector PMIs were also in focus along with housing sector data.

The Manufacturing PMI fell from 63.4 to 61.2, with the Services PMI falling from 59.9 to 55.2. Economists had forecast PMIs of 62.5 and 58.3 respectively.

Housing sector data from the U.S had a muted impact on the European majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Volkswagen rose by 1.19% to lead the way, with Daimler (+0.44%) also finding support. BMW and Continental saw modest losses of 0.01% and by 0.04% respectively, however.

It was a bullish day for the banks. Deutsche Bank and Commerzbank ended the day with gains of 0.72% and 0.56% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Soc Gen rose by 1.17% and by 1.16% respectively, with Credit Agricole rallying by 1.75%.

It was a mixed day in the red for the French auto sector, however. Stellantis NV rose by 0.81%, while Renault fell by 0.40%.

Air France-KLM rallied by 2.51%, with Airbus SE rising by 1.12%.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Monday.

Following a 14.35% slide on Friday, the VIX fell by a further 7.60% to end the day at 17.15.

The NASDAQ rallied by 1.55%, with the Dow and the S&P500 seeing gains of 0.61% and by 0.85% respectively.

VIX 240821 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the Eurozone’s economic calendar. 2nd quarter GDP numbers for Germany are due out later this morning.

With little else for the markets to consider, expect plenty of influence from the numbers.

From the U.S, new home sales figures, due out late in the day, should have a muted impact on the majors.

FOMC member chatter ahead of Jackson Hole and COVID-19 will also remain the key areas of interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 69 points.

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

Autodesk Could Hit New All-Time High on Strong Earnings; Target Price $353

Autodesk, a leading provider of drafting and design software for the building, and infrastructure fields is expected to report its second-quarter earnings of $1.12 per share, which represents year-over-year growth of over 14% from $0.98 per share seen in the same period a year ago.

On average, the company has delivered an earnings surprise of over 9% in the last four consecutive quarters. The San Rafael, California-based company would post year-over-year revenue growth of over 15% to $1.05 billion.

For the fiscal second quarter, the company expects revenues between $1.045 billion and $1.06 million. The company expects non-GAAP earnings of $1.08-$1.14 per share.

Autodesk shares have gained over 9% so far this year. Wednesday’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

“Upside in resellers’ Q2 performance & forward expectations increases confidence ADSK is on track to hit revenue & billings growth guides in FY22, despite a back-end loaded year. Our estimates are towards the high-end of guidance & forecast achieving a $2.4 billion FY23 FCF target. Resume coverage at a price target of $334,” noted Keith Weiss, equity analyst at Morgan Stanley.

“On the back of our stronger checks, our estimates are towards the high-end of FY22 guidance ranges and forecast Autodesk achieves FY23 FCF target for $2.4 billion as back-end loaded, multi-year deals in FY22 result in an outsized deferred revenue build and FCF collection in FY23. Our modified-DCF based price target of $334 applies a 28x EV/ FCF multiple to our FY26e FCF estimate, or 1.9x growth-adjusted, and discounts back at an 11% WACC. Debates on the longer-term sustainable growth, quality of FY23 FCF given multi-year deals, and higher macro sensitivity likely limit further multiple expansion near-term, leaving us equal weight. Autodesk is scheduled to report F2Q22 earnings on Wednesday, August 25th, after market close.”

Autodesk Stock Price Forecast

Eleven analysts who offered stock ratings for Autodesk in the last three months forecast the average price in 12 months of $353.22 with a high forecast of $380.00 and a low forecast of $330.00.

The average price target represents a 5.63% change from the last price of $334.38. From those 11 analysts, nine rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $334 with a high of $451 under a bull scenario and $230 under the worst-case scenario. The firm gave an “Equal-weight” rating on the multinational software corporation’s stock.

Several other analysts have also updated their stock outlook. RBC raised the target price to $363 from $340. Stifel lifted the target price to $370 from $342. Mizuho upped the price target to $380 from $355.

Check out FX Empire’s earnings calendar

European Equities: Private Sector PMIs and Consumer Confidence in Focus

Economic Calendar

Monday, 23rd August

French Manufacturing PMI (Aug) Prelim

French Services PMI (Aug) Prelim

German Manufacturing PMI (Aug) Prelim

German Services PMI (Aug) Prelim

Eurozone Manufacturing PMI (Aug) Prelim

Eurozone Markit Composite PMI (Aug) Prelim

Eurozone Services PMI (Aug) Prelim

Eurozone Consumer Confidence (Aug)

Tuesday, 24th August

German GDP (YoY) (Q2)

German GDP (QoQ) (Q2)

Wednesday, 25th August

German Ifo Business Climate Index (Aug)

Thursday, 26th August

GfK German Consumer Climate (Sep)

The Majors

It was relatively bullish day for the European majors on Friday, with the majors reversing losses from early in the session.

The DAX30 rose by 0.27%, with the CAC40 and the EuroStoxx600 seeing gains of 0.31% and 0.33% respectively.

A quiet economic calendar allowed the markets to hit pause on the pullback through the week.

Apprehension ahead of next week’s Jackson Hole Symposium and concerns over the Delta variant pegged the majors back, however.

The Stats

In July, Germany’s producer price index for industrial products rose by 1.9% versus a forecasted 0.8% increase. The index had risen by 1.3% in June.

According to Destatis,

  • Compared with July 2020, the index was up by 10.4%.
  • This was the highest increase compared to the corresponding month of the preceding year since January 1975.
  • Increases inn prices of intermediate products and energy drove the index northwards.
  • Prices of intermediate goods increased 15.6% compared with July 2020 and by 2.3% month-on-month.
  • Energy prices as a whole increased by 20.4% compared with July 2020 and by 4.1% compared with June 2021.

From the U.S

There were no major stats to provide the European majors with direction late in the day.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Daimler rose by 0.39% to buck the trend on the day. BMW and Continental fell by 0.30% and by 0.22% respectively, however, with Volkswagen ending the day down by 1.09%.

It was a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 0.38% and 0.37% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas rose by 0.37%, with Soc Gen and Credit Agricole ending the day up by 0.02% and by 0.17% respectively.

It was another day in the red for the French auto sector, however. Stellantis NV and Renault fell by 1.15% and by 1.13% respectively.

Air France-KLM declined by 1.26%, while Airbus SE rose by 0.40%.

On the VIX Index

It was back into the red for the VIX on Friday, ending a 4-day winning streak.

Reversing a 0.46% gain from Thursday, the VIX slid by 14.35% to end the day at 18.56.

The NASDAQ rose by 1.19%, with the Dow and the S&P500 seeing gains of 0.65% and by 0.81% respectively.

VIX 230821 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone’s economic calendar. Prelim August private sector PMIs for France, Germany, and the Eurozone will be in focus early in the European session.

Expect plenty of influence from the numbers as the markets look to assess whether the Delta variant has impacted activity.

With consumption key to a sustainable economic recovery, Eurozone consumer sentiment figures for August will also draw attention late in the day.

From the U.S, prelim private sector PMis will also be in focus, with the Services PMI the key driver.

FOMC member chatter ahead of Jackson Hole and COVID-19 will also remain the key areas of interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 12 points.

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

Wall Street Week Ahead: Best Buy, Medtronic, Autodesk and Dollar General in Focus

Earnings Calendar For The Week Of August 23

Monday (August 23)

Ticker Company EPS Forecast
JD JD.com $2.69
EDU New Oriental Education Tech $0.02
RBREW Royal Unibrew A/S kr8.25
PANW Palo Alto Networks $1.43
GRUB GrubHub $0.27
MSNFY Minera Frisco ADR $0.01
TLK Telekomunikasi Indns Tbk Prshn Pp Pt $0.41
GPFOY Financiero Inbursa ADR $0.14
SUMO Sumo -$0.14
JOBS 51job $3.77
CBPO China Biologic $1.33
TV Grupo Televisa Sab $0.10

Tuesday (August 24)

IN THE SPOTLIGHT: BEST BUY, MEDTRONIC

BEST BUY: The Richfield, Minnesota consumer electronics retailer is expected to report its second-quarter earnings of $1.89 per share, which represents year-over-year growth of over 10% from $1.71 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 36%. The consumer electronics retailer would post year-over-year revenue growth of over 17% to $11.6 billion. According to ZACKS Research, full-year earnings to be at $8.53 per share and revenue of $49.56 billion, rising +7.84% and +4.86% year-over-year, respectively.

Best Buy (BBY) is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. BBY’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labour management, supply chain and omnichannel underpin our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We think BBY can sustain >5% EBIT margins after pulling forward its margin target by 5 years during the COVID-19 pandemic. This is reliant on generating SG&A efficiencies, which we believe are possible given BBY’s strong track record in this arena.”

MEDTRONIC: An American-Irish medical device company, is expected to report its fiscal first-quarter earnings of $1.32 per share, which represents year-over-year growth of over 112% from $0.62 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 45%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 20% to $7.8 billion.

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

“CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 24

Ticker Company EPS Forecast
BNS Scotiabank $1.90
BMO Bank Of Montreal USA $2.93
MDT Medtronic $1.32
BBY Best Buy $1.89
HTHT Huazhu Group Limited $1.04
INTU Intuit $1.59
HEI Heico $0.55
TOL Toll Brothers $1.49
URBN Urban Outfitters $0.78
JWN Nordstrom $0.27
VNET 21Vianet -$0.31
ACH Aluminum Of China $0.22

Wednesday (August 25)

IN THE SPOTLIGHT: AUTODESK

Autodesk, a leading provider of drafting and design software for the building, and infrastructure fields is expected to report its second-quarter earnings of $1.12 per share, which represents year-over-year growth of over 14% from $0.98 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%. The San Rafael, California-based company would post year-over-year revenue growth of over 15% to $1.05 billion.

For the fiscal second quarter, the company expects revenues between $1.045 billion and $1.06 million. The company expects non-GAAP earnings of $1.08-$1.14 per share.

“Upside in resellers’ Q2 performance & forward expectations increases confidence ADSK is on track to hit revenue & billings growth guides in FY22, despite a back-end loaded year. Our ests are towards the high-end of guidance & forecast achieving $2.4B FY23 FCF target. Resume coverage at a price target of $334,” noted Keith Weiss, equity analyst at Morgan Stanley.

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

Ticker Company EPS Forecast
SYDB Sydbank A/S kr5.70
ATHM Autohome $6.32
RY Royal Bank Of Canada $2.70
DKS Dick’s Sporting Goods $2.83
KC Kutcho Copper -$1.34
ADSK Autodesk $1.12
SPLK Splunk -$0.69
NTAP NetApp $0.95
BOX BOX $0.18
CRM Salesforce.com $0.92
ULTA Ulta Salon Cosmetics Fragrance $2.50
SNOW Intrawest Resorts -$0.15
WSM Williams Sonoma $2.59
ASND Ascendant Resources -$2.23
SHI SinOPEC Shanghai Petrochemical $1.23
LFC China Life $0.40
PTR Petrochina $1.13
BAVA Bavarian Nordic As kr0.57
PLAN Progressive Planet -$0.14
SMTC Semtech $0.62
DY Dycom Industries $0.74
RAVN Raven Industries $0.20

Thursday (August 26)

IN THE SPOTLIGHT: DOLLAR GENERAL

The U.S. largest discount retailer by the number of stores Dollar General is expected to report a profit of $2.59 in the second quarter, which represents a year-over-year decline of about 17% from $3.12 per share seen in the same quarter a year ago.

The company’s revenue would also decline 1.5% to 8.56 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%.

“Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. Recent high-quality results add more confidence to the 10% L-T EPS growth algorithm, ramping top-line initiatives appear sustainable, and we see underappreciated margin upside from the rollout of Fresh self-distribution,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“DG’s valuation (high teens P/E multiple) presents a solid entry point as it is in line with its history despite much stronger EPS power (and below DG’s pre-COVID multiple) while a ~5x turn discount to the market. This seems unwarranted given DG’s consistent execution & outlook.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 26

Ticker Company EPS Forecast
BURL Burlington Stores $1.45
HAIN Hain Celestial $0.39
CM Canadian Imperial Bank Of Commerce USA $2.72
TD Toronto-Dominion Bank $1.53
SJM J.M. Smucker $1.88
ANF Abercrombie & Fitch $0.76
DLTR Dollar Tree $1.02
SAFM Sanderson Farms $6.38
LANC Lancaster Colony $1.31
COTY Coty -$0.06
DG Dollar General $2.59
PTON Peloton Interactive, Inc. -$0.44
HPQ HP $0.84
VMW VMware $1.65
WDAY Workday $0.78
GPS Gap $0.46
MRVL Marvell Technology $0.31

Friday (August 27)

Ticker Company EPS Forecast
ZNH China Southern Airlines -$0.77
CICHY China Construction Bank Corp $0.90
SNP China Petroleum Chemical $2.42
LEGN LEG Immobilien AG -$0.31
For a look at all of today’s economic events, check out our economic calendar.

European Equities: A Week in Review – 20/08/21

The Majors

It was a bearish week for the majors in the week ending 20th August.

The CAC40 slid by 3.91%, with the DAX30 and the EuroStoxx600 ending the week with losses of 1.06% and 1.48% respectively. For the EuroStoxx600, the loss ended a run of 4 consecutive weekly gains.

Economic data from the Eurozone was on the lighter side in the week, leaving COVID-19, U.S Stats, and the FED in focus.

Overnight FOMC meeting minutes from Wednesday sent the European majors into the deep red on Thursday.

While falling short of a taper tantrum, rising expectations of a near-term move by the FED weighed on riskier assets.

A continued spread of the Delta variant and disappointing economic data from China also weighed on the majors.

From China, industrial production increased by 6.4% in July, year-on-year. In June. industrial production had risen by 8.3%. Retail sales was up 8.5% compared with 12.1% in June.

The Stats

Eurozone employment, 2nd estimate GDP, and finalized inflation figures were in focus.

In line with 1st estimates, the Eurozone economy expanded by 2.0% in the 2nd quarter, rebounding from a 0.3% contraction in the previous quarter. While, the year-on-year, number was revised down from 13.7% to 13.6%, the numbers were good enough to support the majors.

Employment also picked up in the 2nd quarter, rising by 0.5% to reverse a 0.2% decline from the previous quarter.

On the inflation front, the Eurozone’s annual rate of inflation picked up from 1.9% to 2.2%, which was in line with prelim figures. The Eurozone’s core annual rate of inflation softened from 0.9% to 0.7%, which was also in line with prelim numbers.

From the U.S

Key stats included retail sales and jobless claims figures.

Retail sales figures disappointed. In July, retail sales fell by 1.1%, reversing a 0.7% rise from June. Economists had forecast a 0.3% decline. Core retail sales fell by 0.4% versus a forecasted 0.1% rise. In June, core retail sales rose by 1.6%.

On the positive side, however, were labor market numbers once more. In the week ending 13th August, initial jobless claims fell from 377k to 348k. Economists had forecast a decline to 363k.

On the monetary policy front, the FOMC meeting minutes from Wednesday weighed on riskier assets. FOMC member chatter also suggested an increased chance of a near-term move.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Daimler slumped by 7.66% to lead the way down, with BMW and Volkswagen ending the week down by 7.35% and 7.26% respectively. Continental saw a more modest 4.40% decline in the week.

It was also a bearish week for the banking sector. Deutsche Bank and Commerzbank fell by 4.83% and by 5.49% respectively.

From the CAC, it was a bearish week for the banks. Soc Gen slid by 6.19%, with BNP Paribas and Credit Agricole falling by 4.19% and by 4.39% respectively.

The French auto sector also struggled, with Stellantis NV and Renault sliding by 7.43% and by 7.48% respectively.

Air France-KLM and Airbus ended the week with losses of 4.94% and 4.30% respectively.

On the VIX Index

It was a back into the green for the VIX in the week ending 20th August.

Reversing a 4.33% fall from the previous week, the VIX rose by 20.13% to end the week at 18.56.

4-days in the green from 5 sessions, which included a 20.44% jump on Thursday delivered the downside. A 14.35% slide on Friday pared some of the gains, however.

For the week, the Dow fell by 1.11%, with the NASDAQ and the S&P500 ending the week down by 0.73% and by 0.59% respectively.

VIX 210821 Weeklly Chart

The Week Ahead

It’s a busy week ahead on the economic calendar.

Early in the week, prelim August private sector PMIs for France, Germany, and the Eurozone will be in focus.

Expect plenty of interest in the numbers. There’s been lingering concerns over the sustainability of the economic recovery. Weak numbers would pressure the majors.

Through the remainder of the week, the German economy will be in focus.

2nd quarter GDP, business sentiment, and consumer sentiment figures will provide direction.

From the U.S, private sector PMIs, core durable goods, jobless claims, personal spending, and inflation will also influence.

On the monetary policy front, the FED will also be in the limelight once more. The FED’s annual Economic Policy Symposium is scheduled for 26th August to 28th August. With the markets expecting a tapering to the asset purchasing program, the markets will be expecting guidance on what’s to come.

Away from the economic calendar, COVID-19 news updates will also need monitoring.

Medtronic Q1 Earnings to More Than Double; Stocks Could Hit New Highs

Medtronic, an American-Irish medical device company, is expected to report its fiscal first-quarter earnings of $1.32 per share, which represents year-over-year growth of over 112% from $0.62 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 45%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 20% to $7.8 billion.

Medtronic shares have gained over 10% so far this year. The stocks ended 0.30% lower at $128.93 on Thursday. Tuesday’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

“CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

Medtronic Stock Price Forecast

Seventeen analysts who offered stock ratings for Medtronic in the last three months forecast the average price in 12 months of $142.56 with a high forecast of $150.00 and a low forecast of $135.00.

The average price target represents a 10.57% change from the last price of $128.93. From those 17 analysts, 15 rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $140 with a high of $158 under a bull scenario and $104 under the worst-case scenario. The firm gave an “Overweight” rating on the medical device company’s stock.

Several other analysts have also updated their stock outlook. BTIG raised the target price to $137 from $135. Guggenheim lifted the price target to $145 from $135. Oppenheimer upped the price target to $147 from $134.

Check out FX Empire’s earnings calendar

European Equities: A Light Economic Calendar Leaves FED Policy in Focus

Economic Calendar

Friday, 20th August

German PPI MoM JUL

The Majors

It was a particularly bearish day for the European majors on Thursday, with the majors heading for a 1st weekly loss of the month.

The CAC40 slid by 2.43%, with the DAX30 and the EuroStoxx600 falling by 1.25% and by 1.54% respectively.

From the Eurozone, there were no major stats to distract the markets.

The overnight FOMC meeting minutes from Wednesday and economic data from the U.S raised the prospects of a near-term move by the FED.

Jitters over an imminent tapering by the FED delivered the downside on the day.

The Stats

There were no major stats from the Eurozone to provide the majors with direction.

From the U.S

Philly FED Manufacturing and weekly jobless claims figures were in focus.

In August, the Philly FED Manufacturing Index fell from 21.9 to 19.4. Economists had forecast an increase to 23.0.

More significantly, in the week ending 13th August, jobless claims fell from 377k to 348k. Economists had forecast a decline to 363k.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. BMW and Daimler slid by 3.12% and by 3.37% respectively to lead the way down. Continental and Volkswagen ended the day down by 2.13% and by 1.81% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 2.92% and 1.93% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen slid by 3.03%, with BNP Paribas and Credit Agricole ending the day down by 2.68% and by 2.05% respectively.

Things were not much better for the French auto sector. Stellantis NV slid by 3.56%, with Renault falling by 2.60%.

Air France-KLM saw a relatively modest 1.60% decline, while Airbus SE slid by 3.15%.

On the VIX Index

It was a 4th consecutive day in the green for the VIX on Thursday.

Following a 20.44% jump on Wednesday, the VIX rose by 0.46% to end the day at 21.67.

The NASDAQ and the S&P500 rose by 0.11% and by 0.13% respectively, while the Dow slipped by 0.19%.

VIX 200821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Wholesale inflation figures from Germany are due out in the early part of the day.

We don’t expect the numbers to influence, however.

FOMC member chatter ahead of Jackson Hole and COVID-19 will remain the key areas of interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 27 points.

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

Best Buy’s Q2 Earnings to Rise over 10%; Target Price $130

The Richfield, Minnesota consumer electronics retailer Best Buy is expected to report its second-quarter earnings of $1.89 per share, which represents year-over-year growth of over 10% from $1.71 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 36%. The consumer electronics retailer would post year-over-year revenue growth of over 17% to $11.6 billion.

According to ZACKS Research, full-year earnings to be at $8.53 per share and revenue of $49.56 billion, rising +7.84% and +4.86% year-over-year, respectively.

Best Buy shares have gained over 10% so far this year. The stocks ended 0.59% lower at $110.1 on Wednesday.

“We believe the company remains fundamentally undervalued and there could be room for gains in the stock going forward. Specifically, there is a 60% chance of a rise for BBY stock over the next month (twenty-one trading days) based on our machine learning analysis of trends in the stock price over the last ten years,” noted analysts at Trefis.

Analyst Comments

Best Buy (BBY) is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. BBY’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labour management, supply chain and omnichannel underpin our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We think BBY can sustain >5% EBIT margins after pulling forward its margin target by 5 years during the COVID-19 pandemic. This is reliant on generating SG&A efficiencies, which we believe are possible given BBY’s strong track record in this arena.”

Best Buy Stock Price Forecast

Sixteen analysts who offered stock ratings for Best Buy in the last three months forecast the average price in 12 months of $130.75 with a high forecast of $150.00 and a low forecast of $109.00.

The average price target represents an 18.76% change from the last price of $110.10. From those 16 analysts, nine rated “Buy”, six rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $120 with a high of $152 under a bull scenario and $86 under the worst-case scenario. The firm gave an “Equal-weight” rating on consumer electronics retailer’s stock.

Several other analysts have also updated their stock outlook. BofA Global Research raised the price objective to $145 from $132. Raymond James lifted the price objective to $135 from $130. Guggenheim upped the target price to $135 from $130.

Check out FX Empire’s earnings calendar

European Equities: A Quiet Economic Calendar Leaves U.S Data to Influence

Economic Calendar

Friday, 20th August

German PPI MoM JUL

The Majors

It was another mixed day for the European majors on Wednesday, with the EuroStoxx600 finding further support after Monday’s slip.

DAX30 and the EuroStoxx600 rose by 0.28% and by 0.14% respectively, while the CAC40 fell by 0.73%.

Economic data from the Eurozone had a muted impact on the majors, with housing sector data from the U.S also failing to move the dial.

Continued concerns over the ongoing spread of the Delta variant pegged the majors back once more,

Uncertainty over the FED’s tapering plans ahead of the FOMC meeting minutes also tested the majors on the day.

The Stats

Finalized inflation figures for the Eurozone were the key stats of the day.

In July, the Eurozone’s annual rate of inflation picked up from 1.9% to 2.2%, which was in line with prelim figures. Month-on-month, consumer prices fell by 0.1%, following a 0.3% rise in June.

The core annual rate of inflation softened from 0.9% to 0.7%, which was also in line with forecasts.

According to Eurostat,

  • The lowest annual rates were registered in Malta (+0.3%), Greece (+0.7%), and Italy (+1.0%).
  • Estonia recorded the highest annual rate of inflation of 4.9%.
  • For the euro area, the largest contribution came from energy (+1.34 pp), followed by food, alcohol, & tobacco (+0.35 pp).
  • Services contributed 0.31 pp, with non-energy industrial goods 0.17 percentage points.

From the U.S

Housing sector data for July were in focus. With the FOMC minutes due out after the European close however, the stats failed to move the dial.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Continental rose by 0.97% to buck the trend. By contrast, Daimler slid by 1.21% to lead the way down. BMW and Volkswagen ended the day down by 0.70% and by 1.12% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank ended the day with gains of 1.17% and 2.32% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.91%, with Soc Gen and Credit Agricole ending the day up by 0.59% and by 0.23% respectively.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.76%, while Renault fell by 0.40%.

Air France-KLM and Airbus SE saw relatively modest gains of 0.41% and 0.07% respectively.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Wednesday.

Following an 11.10% rise on Tuesday, the VIX jumped by 20.44% to end the day at 21.57.

The Dow and the S&P500 slid by 1.08% and by 1.07% respectively, with the NASDAQ ending the day down by 0.89%.

VIX 190821 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar. There are no material stats due out of the Eurozone to provide the majors with direction.

The lack of stats will leave the majors to respond to the overnight FOMC meeting minutes going into the open.

Later in the day, jobless claims and Philly FED manufacturing numbers from the U.S will also influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 18 points.

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