ACXP - Stocks To Watch: Tesla Netflix And AT&T Headline Big Week Of Earnings

2023-10-14 10:30:00 ET

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Investors will aim to look through the fog of war headlines next week to recalibrate as economic and earnings releases pour in. The U.S. retail sales for September are forecast to show a small increase in the core rate from August, while reports on industrial production and housing starts also anticipated to incremental show month-over-month gains. Those reports will be followed by a key speech by Federal Reserve Chairman Jerome Powell on October 19 as the blackout period for Fed speakers ahead of the next FOMC meeting rapidly approaches. The Q3 earnings season also kicks into high gear next week, with Tesla (TSLA) leading the charge. Other earnings reporters with the potential to shake up their respective sectors include Procter & Gamble (PG) ( preview) , Johnson & Johnson (JNJ) ( preview ), AT&T (T) ( preview ), Netflix (NFLX) ( preview ), Bank of America (BAC) ( preview ), and Taiwan Semiconductor (TSM) ( preview ).

Earnings spotlight: Monday, October 16 - Charles Schwab (SCHW) and Equity LifeStyle Props (ELS).

Earnings spotlight: Tuesday, October 17 - Johnson & Johnson (JNJ), Bank of America (BAC), Lockheed Martin (LMT), and Goldman Sachs (GS).

Earnings spotlight: Wednesday, October 18 - Tesla (TSLA), Procter & Gamble (PG), Abbott Laboratories (ABT), Netflix (NFLX), and Morgan Stanely (MS).

Earnings spotlight: Thursday, October 19 - Philip Morris International (PM), Union Pacific (UNP), AT&T (T), CSX (CSX), Taiwan Semiconductor Manufacturing (TSM), and American Airlines Group (AAL).

Earnings spotlight: Friday, October 20 - American Express (AXP) and Schlumberger (SLB).

Volatility watch: Short interest levels elevated on Fisker (FSR), Theravance Biopharma (TBPH), Novavax (NVAX), Bowlero Corp. (BOWL), and Bicycle Therapeutics plc (BCYC). Options trading volume has moved higher recently on Virgin Galactic (SPCE) and Replimune Group (REPL). The most overbought stocks per their 14-day relative strength index are Generation Asia I Acquisition (GAQ), Acurx Pharmaceuticals (ACXP), and Startek (SRT). The most oversold stocks per their 14-day Relative Strength Index are McCormick (MKC), Real Good Food (RGF), and PSQ Holdings (PSQH).

Dividend watch: Companies projected to boost their quarterly dividend payouts include Apple Hospitality (APLE) to $0.10 from $0.08, Visa (V) to $0.54 from $0.45, Blackstone (BX) to $0.87 from $0.79, Penske Automotive (PAG) to $0.78 from $0.72, and Hubbell (HUBB) to $1.21 from $1.12. See Seeking Alpha's list of Quick Dividend Stock Picks.

IPO watch: Birkenstock (BIRK) will begin its second week of trading, with shares sitting below their IPO pricing level. The post-IPO quiet period ends on a number of stocks to set up the potential for share price moves as analysts weigh in. Watch for ratings on Instacart (CART), Klaviyo (KVYO), MDB Capital (MDBH), SR Bancorp (SRBK), and Davis Commodities (DTCK) to pour in. The IPO lockup period expires on U Power Limited (UCAR). The Chinese EV battery-swapping tech stock trades well below its $6 per share IPO pricing level.

Tesla earnings preview: The electric vehicle sector will be on high alert when Tesla (TSLA) reports earnings on October 18. Analysts expect the Austin-based company to disclose revenue of $24.3B for the quarter and EPS of $0.75. Automotive gross margin is expected to fall to 17.5% from 18.1% in Q2 and 19.0% in Q1. Tesla (TSLA) already reported that it produced 430,488 vehicles and delivered 435,059 vehicles during Q3. The electric vehicle maker said a sequential decline in volumes was caused by planned downtimes for factory upgrades. Crucially, Tesla's (TSLA) 2023 volume target of around 1.8 million vehicles has remained unchanged so far, but it is unclear if demand consideration and recent price cuts on the Model 3/Model Y will be a factor with the new update. Ahead of the report, Morgan Stanley noted that expectations seemed quite low for the quarter, with investors bracing for some negative revisions. Analyst Adam Jonas thinks commentary around 2024 volume and Cybertruck execution could be key. An interesting wildcard will be what Elon Musk has to say on the earnings conference call in regard to the United Auto Workers strike and any anticipated benefit for Tesla. Options trading on Tesla implies a 7% swing up or down for shares after the report drops. Tesla shed just under 10% after its last earnings report. Fisker (FSR) and Rivian Automotive (RIVN) are the two EV stocks that correlate the closest to Tesla.

ESMO preview: The healthcare sector will see one of its bigger conferences of the year begin in Madrid. ESMO Congress is an annual oncology meeting that has led to share price jolts for participating companies in the past. The first abstracts drop on October 16. Bank of America previewed that the most watched readout could be from the Mariposa trial, with Johnson & Johnson's (JNJ) amivantamab attempting to knock off Tagrisso as the heir apparent in frontline lung cancer. RBC Capital has tipped that Ambrx Biopharma (AMAM) will report positive data at ESMO. Needham has pointed to Revolution Medicines (RVMD) as a company that may see shares move off its ESMO abstract. Readouts from Ambrx Biopharma (AMAM), Eisai (ESALF), Relay Therapeutics (RLAY), Olema Pharmaceuticals (OLMA), and ORIC Pharmaceuticals (ORIC) are also being circled by analysts as potential catalysts. Some of the other notable companies due to present abstracts include AstraZeneca (AZN), Mirati Therapeutics (MRTX), Seagen (SGEN), Merck (MRK), and Bristol-Myers Squibb (BMY).

NCR splits into two: NCR Corporation (NCR) will split into two companies through a spinoff on October 17. The ATM business will be called NCR Atleos and the digital commerce business will be called NCR Voyix. The ATM company will be a cash-generative business positioned to focus on delivering ATM-as-a-Service to a large, installed customer base across banks and retailers. It will build on NCR's leadership in self-service banking and ATM networks to meet global demand for ATM access and leverage new ATM transaction types, including digital currency solutions, to drive market growth. NCR Atleos will also continue shifting to a highly recurring revenue model to drive stable cash flow and capital returns to shareholders. Meanwhile, the digital commerce company called NCR Voyix will be a growth business positioned to leverage NCR's software-led model to continue transforming, connecting, and running global retail, hospitality, and digital banking. It will maximize common solutions to drive innovation, and boost operational efficiency. The company will also reinvest in the business to accelerate growth and recurring revenue. NCR Voyix will leverage NCR's software to transform and connect global retail, hospitality and digital banking technology platforms to create a digital commerce experience. The name is a nod to the ever-present vision, innovation and partnership that NCR offers its customers as we work with them in their voyage to succeed, noted NCR CEO Michael Hayford.

Key events: Baidu (BIDU) will hold its Baidu World 2023 event in Beijing next week. The company says it will release multiple AI-native applications at the event and introduce the latest progress in foundation models. Analysts think the update on the ChatGPT-like tool Ernie Bot could spark interest in the stock. Investor events scheduled include Charles Schwab's Fall Business Update (SCHW), Equillium's (EQ) Analyst & Investor Day and Jefferies Financial Group's (JEF) Investor Day. Other notable investor events include BlackBerry's (BB) summit and investor briefing from New York City, DarioHealth's (DRIO) Investor Day, Helen of Troy's (HELE) Investor Day, Hewlett Packard Enterprise's (HPE) Securities Analyst Meeting, Vista Outdoor's (VSTO) Investor Day, and Cytokinetics' (CYTK) Virtual Investor & Analyst Day.

Conference schedule: The conference schedule is in the week ahead. The healthcare sector will have its eyes on the World Vaccine Congress, Europe. Presentations from Novavax (NVAX), Vaxart (VXRT), and Tonix Pharmaceuticals (TNXP) will be of interest. The Lytham Partners Fall Investor Conference and ThinkEquity Conference could lead to share price jolts for small cap stocks.

Quant ratings: Stocks with recent quant rating changes include Berkshire Hathaway (BRK.B) to Strong Buy from Hold, Neogen (NEOG) to Buy from Hold, and ARK Next Generation Internet ETF (ARKW) to Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.

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