RBLX - Stocks To Watch Include DraftKings Roblox Guidewire Software And Celsius Holdings

2023-11-11 10:30:00 ET

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The consumer price index report for October will be a key event next week as investors look for direction with interest rates, especially after Federal Reserve President Jerome Powell said at an International Monetary Fund conference that the Fed would not hesitate to tighten monetary policy if the data supported a hike. While markets are pricing in less than a 20% probability of a December rate increase, a stronger-than-expected CPI report or hot retail sales print could reset expectations. Weighing in on the wildcard, Seeking Alpha analyst Dan Victor thinks that CPI could surprise on the low side. President Biden's meeting in the middle week with China leader Xi Jinping will also be closely watched by investors in the tech sector. The earnings calendar for the week ahead includes reports from retail giants Walmart (WMT), Target (TGT), and Home Depot (HD), while investor events scheduled for DraftKings (DKNG), Roblox (RBLX), and Guidewire Software (GWRE) have the potential to jolt shares.

Earnings spotlight: Monday, November 13 - Tyson Foods (TSN) and Tower Semiconductor (TSEM).

Earnings spotlight: Tuesday, November 14 - Home Depot (HD), Sea Limited (SE), On Holding AG (ONON), and Vipshop (VIPS).

Earnings spotlight: Wednesday, November 15 - Cisco (CSCO), TJX Companies (JX), Palo Alto Networks (PANW), Target (TGT), JD.com (JD), and XPeng (XPEV).

Earnings spotlight: Thursday, November 16 - Walmart (WMT), Alibaba (BABA), Applied Materials (AMAT), and Macy's (M).

Earnings spotlight: Friday, November 17 - BJ's Wholesale Club Holdings (BJ) and Spectrum Brands (SPB).

Volatility watch: Short interest levels have pushed even higher on SMX (Security Matters) (SMX) and ProKidney Corp. (PROK). Options trading volume has moved higher on Spirit Airlines (SAVE) as the DOJ trial looking to block the airline company's merger with JetBlue Airways (JBLU) heads into its second week. The most overbought stocks per their 14-day relative strength index are Bluegreen Vacations Holding Corporation (BVH), Sierra Metals (SMTS), and HCI Group (HCI). The most oversold stocks per their 14-day Relative Strength Index are Ventyx Bio (VTYX), Oroco Resource (ORRCF), and Core Molding (CMT).

Dividend watch: Companies projected to boost their quarterly dividend payouts include Apple Hospitality (APLE) to $0.10 from $0.08, Amkor Technology (AMKR) to $0.090 from $0.075, Aecom (ACM) to $0.20 from $0.18, and Nike (NKE) to $0.37 from $0.34. See Seeking Alpha's list of Quick Dividend Stock Picks.

IPO watch: Three small IPOs are expected to price and start trading next week. College athletics recruiting firm Signing Day Sports (SDYS), skincare product seller Elevai Labs (ELAB), and Chinese ready-to-cook meal provider DDC Enterprise (DDC) are all expected to make their public debut. Quiet periods end during the week on Webuy Global (WBUY), Northann (NCL), and ABIVAX (ABVX) to free up analysts to post ratings. Of the three, only Webuy Global trades above its IPO pricing level.

Sports betting: ESPN BET will go live in Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia. Disney (DIS) property ESPN will also start using official odds provided by ESPN BET across editorial and other content. Penn Entertainment (PENN) has secured the exclusive right to the ESPN Bet trademark for OSB in the U.S. for an initial 10-year term which may be extended for an additional 10 years upon mutual agreement. The casino operator committed to $2B to ESPN for the partnership, with $1.5B in cash to be paid over 10 years and $500M in warrants to buy shares. The launch of ESPN Bet arrives at a strategic time for the sector, just ahead of the busy slate of Thanksgiving week college and pro games.

Home Depot earnings preview: Home Depot (HD) will report earnings on November 14. Consensus estimates are for the home improvement retailer to report revenue of $37.7B and EPS of $3.78. Same-store sales growth are expected to fall 3.2% during the quarter, including a 3.6% decline in the U.S. Transactions and average ticket are both expected to be lower than a year ago. Operating margin is seen coming in at 14.4% of total sales. Morgan Stanley noted Home Depot has historically been a steadier operator in weaker demand environments, and said it is more comfortable with HD's ability to hold its 14% EBIT margin floor in 2023 and 2024. The firm also said there are some signs that the middle part of 2024 may mark the bottom for the housing cycle. Seeking Alpha analyst Deep Value Ideas also has a positive view on Home Depot ahead of earnings, calling the stock a solid buy below the $300 level.

Target earnings preview: Target Corporation (TGT) will report earnings on November 15, with expectations running low. Revenue of $25.2B is anticipated, and same-store sales are expected to fall 5.4% during the quarter. Following a series of downward revisions by analysts, EPS of $1.48 is now expected. Gross margin is seen coming in at 27.0% of sales and the retailer is forecast to have an inventory position 17% below last year's level. The stock has attracted some positive views ahead of the report, despite the sales pressures. Evercore ISI added the name to its Tactical Outperform List on the view that Target's near-term comparable sales problems are already well understood by investors, while the company's ability to manage earnings is seen as driving EPS upside. "With TGT trading near pre-pandemic levels and down 28% YTD, we believe that the stock reflects much of the bad news of a softer consumer backdrop, mix headwinds, and operational missteps over the course of the past year and a half," previewed Evercore. Meanwhile, Oppenheimer dropped FY24 and FY25 EPS estimates on Target (TGT), but thinks the Q3 guidance is achievable. Oppenheimer sees a bottom for Target shares at the $100 level, and advises that investors continue to take advantage of any dips. Meanwhile, Morgan Stanley's view is that Target (TGT) remained rational on promotions and markdowns in Q3, despite sales softness. In addition, the firm does not think Target's shrink rate worsened sequentially in comparison to Q2. "While Target is likely to continue ceding share to Walmart, we believe a guide for a low to mid single digit comp decline in F4Q is likely as another quarter of down 5% comps would imply a meaningful deceleration of underlying demand vs. the 2019 run rate since 3Q," noted analyst Simeon Gutman. On Seeking Alpha, analyst Skeptical12 warned of a value trap with Target.

Crypto watch: ARK Invest and 21Shares will launch a new suite of digital asset exchange-traded funds on November 14-15 aimed at delivering long-term capital appreciation through strategic investments in Bitcoin (BTC-USD) and Ethereum (ETH-USD) futures contracts, and the application of blockchain technologies. The ETFs will include ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA), ARK 21Shares Active Ethereum Futures Strategy ETF (ARKZ), ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC) and ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY).

Conference schedule: The Nareit's REITworld: 2023 Annual Conference will be of high interest to investors active in the real estate sector. The event has led to share price gains for REIT stocks in the past. Some of the notable companies due to participate include Uniti Group (UNIT), Sabra Health Care REIT (SBRA), National Storage Affiliates Trust (NSA), and Tanger Factory Outlet Centers (SKT). Other notable conferences include the Needham Virtual Security, Networking, & Communications Conference, Wolfe Research Healthcare Conference, Goldman Sachs Global Metals and Mining Conference, and Stephens Annual Investment Conference.

Stocks splits: Celsius Holdings (CELH) will begin trading on a split-adjusted basis on November 15. The beverage company's board approved a three-for-one split of the common stock. Seeking Alpha analyst Yuval Rotem advised that Celsius (CELH) provides a rare opportunity for investors to invest in a semi-staple business which is still in its hyper-growth stage.

Box Office preview: The Marvels debuts over the weekend amid some concerns that superhero fatigue will hold back traffic. The Disney (DIS) film is forecast to bring in between $60M and $65M domestically, which would make it the weakest Marvel Cinematic Universe film debut since 2015. The domestic box office is up 25% year-over-year through November 9, but is down 23% in comparison to the 2018 tally. Shares of Disney (DIS) fell on Friday after the company delayed the release of several Marvel movies. Four of the upcoming superhero movies are being pushed back days after CEO Bob Iger said the company is looking to focus more on quality after blasting the market with fantastical comic book-based films. Deadpool 3 is moving from May 3 to July 26 and will now be the only one of several planned releases for 2024. Captain America: Brave New World has been delayed from July to Feb. 14, 2025; Thunderbolts was moved from Dec. 20, 2024 to July 25, 2025; the Blade reboot has shifted from Feb. 15, 2025 to Nov. 7, 2025.

Quant ratings: Stocks with recent quant rating changes include Pinterest (PINS) to Strong Buy from Hold, PriceSmart (PSMT) to Buy from Hold, and Sally Beauty Holdings (SBH) to Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.

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