Walgreens Boots Alliance, Constellation Brands and Featured Acuity Brands

Tuesday (January 4)

Wednesday (January 5)

Thursday (January 6)

FOCUS: WALGREENS BOOTS ALLIANCE, THE CONSTELLATION BRANDS

WALGREEN BOOT ALLIANCE: The blue-chip pharmaceutical name is expected to report fiscal first quarter earnings of $ 1.22 per share, which is unchanged from the same period a year ago. Revenue at the Deerfield, Ill.-Based retail pharmacy provider is expected to fall more than 9% to about $ 32.9 billion.

The company has been able to beat earnings per share (EPS) estimates most of the time over the past two years. According to ZACKS Research, annual profit of $ 4.91 per share and revenue of $ 131.5 billion.

“Walgreens Boots Alliance operates one of the two largest retail drugstore chains in the United States as well as Boots Pharmacy in Europe. The new Healthcare segment, designed to contribute up to 60% to LT EPS growth in FY25 and beyond, carries significant investment requirements and integration risk. Management’s inexperience in the health sector could cause growth difficulties, ”noted Ricky Goldwasser, equity analyst at Morgan Stanley.

“Risk of slippage in basic operations as more and more attention shifts to healthcare. “

CONSTELLATION BRANDS: Beer and wine seller is expected to post third-quarter tax profit of $ 2.82 per share, representing year-over-year growth of nearly 9%, from $ 3.09 per share in the same quarter a year ago.

New York-based international alcoholic beverage company Fortune 500 is expected to fall more than 6% to around $ 2.28 billion. The company has been able to beat earnings per share (EPS) estimates twice in the past four quarters and revenue in all four.

According to ZACKS Research, for annual profit of $ 10.01 per share and revenue of $ 8.64 billion.

“While Constellation Brands has historically proven itself as a winery and distillery, we now consider the company to be one of the most stellar brewers in our global coverage. After transforming the antitrust dilemma of AB InBev (which was seeking to acquire Mexican brewer Grupo Modelo) exclusive property rights in the United States to brands like Corona and Modelo, we consider the overall Mexican beer portfolio of the company is ideally located at the confluence of secular and unwavering demographic trends. With an enviable growth profile and best-in-class margins, we believe the beer industry can thrive even in a changing industrial landscape, ”said Jaime M. Katz, senior equity analyst at Morningstar.

“The prospects for the company are not entirely rosy, especially with its wine and spirits business undergoing rapid change. It divested lower quality brands as it places more intentionality behind its long-term “high growth, high margin” strategy, but the remaining brands (such as Meiomi, Kim Crawford, Svedka vodka and High West craft whiskey ) will always face stiff competition. Constellation’s foray into explosive growth categories such as hard seltzer also requires significant investment, given the competitive intensity and brand value already built by the incumbents. Nevertheless, we believe that the experience of the management team will allow the company to manage these risks. “

CHECK OUR WINNING CALENDAR FOR FULL RELEASES ON JANUARY 6

Friday (January 7)

IN THE SPOTLIGHT: THE ACUITY BRANDS

The lighting and building management company is expected to report first-quarter profits of $ 2.2 per share, representing year-over-year growth of more than 17%, from $ 1.87 per share. share at the same time a year ago.

The Atlanta, Ga.-Based company is reportedly showing year-over-year revenue growth of more than 11% to around $ 880.24 million. The company has been able to beat earnings per share (EPS) estimates most of the time over the past two years.

“We remain constructive on Acuity’s breadth of products, its premier agent channel and leadership in control integration. This positioning should allow the company to outperform the market, even when macro challenges arise. The company has a gross margin of over 40% and has a strong cash flow generation profile, ”said Jeffrey Osborne, equity analyst at Cowen in an Oct. 6 research note.

“As macroeconomic conditions improve, we expect more large-scale, higher-margin projects will start to disappear. This should help further support the company’s margin profile in the longer term. We believe that Acuity differentiates itself from its competitors and has a rapid lead in the smart building market with its Distech and Atrius products. Longer term, we see an opportunity in the UVC germicide market and believe the company is well positioned given its many partnerships in the space.

CHECK OUR WINNING CALENDAR FOR FULL RELEASES ON JANUARY 7TH

What to expect in the markets in 2022

In 2021, the S&P 500 returned more than 15% for the third year in a row, investors have to wonder if there will be more upside in the stock market in the coming year. The S&P 500 rose about 27% last year and the index’s P / E ratio is above its long-term average, raising concerns about overbought conditions. A forward price-to-earnings ratio of 21.3 is well above the long-term average of 15 for the S&P 500.

Additionally, earnings are expected to slow this year after a strong 2021. In light of the new US Federal Reserve and the ever-evolving virus, analysts and investors alike are struggling to gauge the future direction of the stock market.

With the inflation rate high, investors face more uncertainty as they attempt to justify record stock prices, and the new, fast-spreading Omicron variant puts an end to optimistic hopes that the global economy would improve. by 2022.

“We expect strong economic growth and earnings in 2022 to help US stocks generate additional gains (this) year. If we are approaching or are already in the middle of an economic cycle with at least a few more years (in our opinion), then we think the odds of another good year for stocks in 2022 are pretty high. We believe the S&P 500 could be fairly valued between 5,000 and 5,100 by the end of 2022, based on an EPS estimate of $ 235 for 2023 and a P / E index of between 21 and 21, 5, ”noted Ryan Detrick, CMT, Chief Markets Strategist, LPL Financial.

“The outlook for above-average economic growth and accompanying earnings gains in 2022 portends another potentially good year for equity investors. Although the pandemic is not completely behind us as the COVID-19 variant Omicron is spreading rapidly (albeit with a high proportion of mild cases), and there are several other risks to watch out for, especially inflation, stocks have historically performed well in mid-cycle economies. We don’t expect 2022 to be an exception, ”added Detrick of LPL Financial.

Jurrien Timmer, global macro director of Fidelity, believes stocks are on course to deliver positive returns in 2022, but not as much as this year, due to slower earnings growth and a tightening in the market. monetary policy of the US Federal Reserve.

“Since the brief but sharp drop of 35% almost 2 years ago, US stocks have reached record highs, in part thanks to the rapid and massive response of fiscal and monetary policy to COVID-19 and the lockdowns that result ”, noted Jurrien Timmer. , Global Macro Director of Fidelity’s Global Asset Allocation Division.

“At the start of 2022, I expect the markets to return to trend growth and the Fed to take the first steps on the path to a return to neutral monetary policy,” he added.

As stock market trends continue to change rapidly in the pandemic world, it becomes increasingly difficult to predict future performance of stocks, especially with analysts and investors dealing with hawkish central banks, on the one hand, and the risk of a new economic blockage on the other.

According to a report from stockmarket.com, three FAANG stocks will be closely watched this year. Against the backdrop of the broader stock market recovery, technology stocks are once again the center of attention. Among the top performing stocks in the industry, FAANG stocks shine the most, as S&P 500 companies with a technology component make up a large portion of the index. In case you didn’t know, that share group includes Meta Platforms (formerly known as Facebook), Amazon, Apple, Netflix, and Google’s parent company Alphabet will be the focus in 2022.