On Wednesday, we have Walt Disney (DIS) announcing its quarterly earnings after the market closes with also 7 positive earnings out of the last 10 reports
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Some of us might think earnings season is all over, but... it seems, there's a lot ahead of us yet! Santa Zvaigzne-Sproge (Conotoxia) points to earnings of Activision Blizzard, Walt Disney, AstraZeneca ADR and PayPal as ones which may be useful to follow this week. Speaking of marcoeconomic events, it shows less releases than last week, but still German CPI is released this Friday and we wonder if it could confirm inflation slowdown.
We're almost past earnings of all the most popular big tech companies. Do you think of any stock, which could really surprise markets next week?
We still have some big names announcing their earnings next week. Surprises usually could not be expected but below are names of the companies, which earnings may be useful to follow.
On Monday, we wait for Activision Blizzard (ATVI) to announce its earnings after the market closes. They have announced better-than-expected earnings in 7 out of the last 10 reports. Activision Blizzard's earnings announcement may be closely watched by the investors in hopes to hear any indication of the potential deal between ATVI and MSFT. As ATVI’s stock price still reflects the Federal Trade Commission’s opposition to the deal, there may be a considerable profit potential in case the acquisition is realized. The current stock price is 77.11 USD versus the 95 USD price announced by MSFT.
On Wednesday, we have Walt Disney (DIS) announcing its quarterly earnings after the market closes with also 7 positive earnings out of the last 10 reports. Walt Disney may still have some potential to capitalize on the reopening of Disney theme parks after the Covid-19 pandemic hit its Disney Park, experiences, and products segment. On the downside, the management change and the following restructuring in Walt Disney may have its impact on the bottom line.
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On Thursday, AstraZeneca ADR (AZN) is to announce its earnings before the market opens. They also have announced better-than-expected earnings in 7 out of the last 10 reports. It may be interesting to watch AZN reports on Covid-19 vaccines as Pfizer has already reported a slower-than-expected demand for the vaccines. The company itself has recently announced improved guidance for FY2022.
On Friday, we have PayPal Holdings Inc (PYPL) announcing its earnings results for the quarter after the market closes. Out of these four companies, Paypal has the best track of positive results: 9 out of 10 reports. While Paypal has joined its peers with considerable layoff plans, its CEO has indicated that the Q4 earnings may be slightly better than expected. Furthermore, a significant part of the company’s operations is global while its reporting currency is the US Dollar. The lowering US Dollar in the past months may boost its earnings in the fourth quarter.
Are you of the opinion German CPI on Friday will confirm inflation slowdown?
CPI largely depends on the energy and food prices during the reporting period. If we look at energy prices during January, we see that they have dropped markedly in comparison to December but still remain at a high level. Even with Germany’s subsidy package, the annual energy cost for an average household has been estimated to reach 6270 euros in January which is 13% less than a month before but 3% higher in a year-on-year comparison. However, lowered energy prices may not always reflect not lower prices for food and other products, especially in the short term.
Meanwhile, Germany’s jobless rate for January came out low suggesting that the labor market still remains resilient despite the economic tightening performed by the ECB. A strong jobs market may allow people to keep their spending at higher levels further encouraging inflation.
The current forecast for the German CPI preliminary data to be reported on Thursday expects a slight increase from the previous month (9.2% versus 8.5% in December) meaning that we may not be able to speak about a substantial inflation slowdown yet.
Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)
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