3 Stocks To Watch In The Coming Week: Home Depot, Salesforce.com, Beyond Meat
Investing.com | Feb 23, 2020 10:36
Coronavirus appears to be the main focus of markets, likely overshadowing everything else when trading opens on Monday. This overarching worry follows new reports showing that Covid-19 continues to spread outside China, the epicenter of the illness.
The virus has infected more than 78,000 people so far, mostly in China, and killed more than 2,400. South Korea, Iran and Italy have reported fatalities from the illness. In Iran, there have been 18 cases diagnosed and four deaths in just the past two days.
The Dow Jones Industrial Average plunged more than 227 points, or 0.78%, on Friday pressured by worries that the outbreak could have a more serious impact on the U.S. and global economy than previously anticipated.
Beyond this looming risk, there are still some big earnings announcements scheduled for the coming week, especially from a variety of large retailers. We're keeping a close eye on the following three stocks:
The hardware and household improvement chain, Home Depot (NYSE:HD), will reports fourth quarter earnings on Tuesday, Feb. 25, before the open. The retailer is expected to report about $25.7 billion in revenue and $2.11 in profit per share.
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The world's largest home improvement chain has pursued a variety of successful strategies during the past few years, to fuel growth and benefit from strong consumer spending.
In the third quarter, however, Home Depot delivered a big negative surprise when its earnings came up short versus analyst expectations and the company trimmed its annual growth outlook for the second time in three months.
Home Depot shares, which closed Friday at $245.34, gained more than 12% this year. The stock has been a participant in the strong rally in the equity markets so far in 2020, suggesting that investors are expecting a comeback in sales growth this year.
h2 2. Salesforce.com/h2Salesforce.com (NYSE:CRM), which sells enterprise software and cloud-based services to corporate clients, will also be reporting on Tuesday, albeit after the market closes.
The software provider is forecast to report more than $4.7 billion in revenue and $0.56 of earnings per share. Since the company last reported in early December, the stock is up more than 17%. It closed on Friday at $189.50.
The stock's rise has been spurred by the market's bullish view on the company’s outlook over the next few years. RBC Capital Markets, in January, upgraded Salesforce.com shares to top-pick status, from outperform, saying it has “significant upside potential in 2020.” Analyst Alex Zukin noted the company’s forecast for revenue growth was above 20% through its 2024 fiscal year, calling the stock “an important strategic asset.”
One of the biggest drivers of future growth is last year’s acquisition of software maker Tableau Software for $15.3 billion. The all-stock deal was Salesforce’s largest transaction ever, part of its move to expand into the business intelligence arena.
According to the company, the Tableau deal will boost sales and propel the software maker more deeply into competition with segment giants Microsoft (NASDAQ:MSFT) and Oracle (NYSE:ORCL), both of which offer business intelligence tools.
El Segundo, CA-based maker of plant-based burgers, Beyond Meat (NASDAQ:BYND) reports fourth-quarter earnings after the close on Friday, Feb. 28.
The company is developing new promotions and products aimed at extending the rapid growth it experienced over the past year in restaurants and grocery stores. Beyond Meat currently has partnerships with Carl’s Jr., Hardee’s and Dunkin’ Donuts in the U.S., and recently announced an expansion of its partnership with Subway in Canada, where the chain will begin serving "meatball" subs nationwide.
Nonetheless, big food company players, including Tyson (NYSE:TSN), Smithfield Foods (OTC:WHGLY), Nestle (OTC:NSRGY) and Kellogg (NYSE:K), all plan to enter the briskly expanding market for fake meat, casting a cloud over Beyond Meat's future outlook.
Shares of BYND skyrocketed after the company’s May 1 IPO when the stock debuted at $25 a share. It peaked at $239.71 in late July. Though the stock is down significantly since then, it closed at $117.45 on Friday, up 55% this year.
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