STZ - A Light First Week of 2022
Although the stock market ended 2021 on a strong footing, the fast-spreading Omicron variant is also going strong and putting an end to the optimistic hopes that the global economy would improve this year. Although the scheduled earnings reports are unlikely to cause major market movements, the first week of the year sets the tone of investors’ sentiment. Walgreens Boots Alliance Inc (NASDAQ: WBA), Constellation Brands Inc (NYSE: STZ) and Acuity Brands Inc (NYSE: AYI) will be the names in the earnings report spotlight.
Walgreens Boots Alliance
On Thursday, Wall Street expects the blue-chip pharmaceutical name that operates a US retail pharmacy chain and Boots Pharmacy in Europe to report its fiscal first-quarter earnings of $1.22 per share as the Deerfield, Illinois-based retail pharmacy provider’s revenue is predicted to plummet more than 9% to around $32.9 billion.
The new Health Segment is guided to contribute as much as 60% to LT EPS growth in FY25 and beyond, but also carries significant investment requirements and integration risk. noted Ricky Goldwasser, Equity Analyst at Morgan Stanley fears that management’s inexperience in healthcare could cause growing pains as the company shifts away from core operations.
Constellation Brands
Also on Thursday, the beer and wine seller is expected to report its fiscal third-quarter earnings of $2.82 per share with the revenue of the New York-based Fortune 500 international beverage alcohol company is expected to drop more than 6% to around $2.28 billion.
While Constellation Brands historically made its bones as a winery and distillery, it is one of the most stellar global brewers. With an enviable growth profile and best of breed margins, its beer business is positioned to thrive even amid an evolving industry landscape, according to Morningstar senior analyst Jaime M. Katz. Althoguh the company’s outlook is not at all pink, especially when it comes to its wine and spirits business, it is focusing its efforts on high growth, high margin and long-term success. It is facing intense competition, especially into explosive-growth categories like hard seltzer that demand significant investment to build brand awareness and customer loyalty, but management is capable of navigating these risks.
Acuity
The Atlanta, Georgia-based lighting and building management firm is expected to report its fiscal first-quarter earnings of $2.2 per share, which represents YoY growth of over 17%, up from the last year’s comparable quarter along with YoY revenue growth of more than 11% to around $ 880.24 million.
The company is well positioned due to its product breadth, top-notch agent channel, and leadership in control integration that allows it to outperform the market, even when macro challenges present themselves. On October 6 th , Cowen equity analyst, Jeffrey Osborne, stated the company boasts a 40%+ gross margin and has a strong cash flow generation profile, therefore expecting more large-scale higher-margin projects will begin to move off the sidelines as the environment improves, which should support the company’s margin profile longer term. Distech and Atrius products provide it with an early lead in the intelligent building market and longer-term, it has an opportunity in the UVC germicidal market where it is well-positioned due to its many partnerships.
On Wednesday, Costco Wholesale Corporation (NASDAQ: COST) will release its December sales data and the fourth-quarter earnings season is scheduled to begin in earnest toward the end of the following week.
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