Stocks To Watch: Earnings Parade Includes Apple, Amazon And AMD; Big Events For Datadog And Fisker

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Investors will see earnings report flood in for a second consecutive week, with almost a third of the S&P 500 companies due to disclose numbers over the next five trading days. The earnings calendar includes big reports from Apple (AAPL) (analysis), Merck (MRK) (dividend grades), Pfizer (PFE) (growth metrics), Caterpillar (CAT) (analysis), and Amazon (AMZN) (preview). The C-suite at Amazon could be especially busy during the week, as media reports indicate the Federal Trade Commission could file its highly-anticipated antitrust lawsuit as early as next week. A wide-ranging lawsuit could challenge Amazon (AMZN) on a number of fronts, including the practices of the Amazon Prime business. Datadog (NASDAQ:DDOG) and Fisker (NYSE:FSR) have corporate events scheduled that could create a share price jolt, while major economic reports in the week ahead include construction spending, U.S. manufacturing PMI, and factory orders - all before the July jobs report lands on the laps of traders on August 4. Nonfarm payroll employment is forecast to increase by 200K in a slight drip from the 209L job additions in June. The employment data is expected to highlight a moderation from the recent trend, but continue to show a tight labor market. The jobs report will fuel more debate on if the Federal Reserve is too loose or tight?

Earnings spotlight: Monday, July 31 - Arista Networks (ANET), Yum China (YUMC), Tenet Healthcare (THC), and Western Digital (WDC).

Earnings spotlight: Tuesday, August 1 - Merck (MRK), Pfizer (PFE), Advanced Micro Devices (AMD), Caterpillar (CAT), Starbucks (SBUX), Uber (UBER), and Altria (MO).

Earnings spotlight: Wednesday, August 2 - CVS Health (CVS), Shopify (SHOP), PayPal (PYPL), Kraft Heinz (KHC), MetLife (MET), Humana (HUM), Skillz (SKLZ), and Joby Aviation (JOBY).

Earnings spotlight: Thursday, August 3 - Apple (AAPL), Amazon (AMZN), Amgen (AMGN), Anheuser-Busch InBev (BUD), ConocoPhillips (COP), Booking Holdings (BKNG), Opendoor Technologies (OPEN), and Wayfair (W).

Earnings spotlight: Friday, August 4 - Enbridge (ENB), Dominion Energy (D), Magna International (MGA), Nikola (NKLA), and Fubotv (FUBO).

Volatility watch: Stocks with high levels of short interest outstanding on them include Bullfrog AI Holdings (BFRG) and Aravive (ARAV). Options trading volume is elevated on Tupperware Brands (TUP) and Yellow (YELL) amid bankruptcy rumblings.

IPO and spinoff watch: No new IPOs are expected to debut in the week ahead. The quiet period on Prestige Wealth (NASDAQ:PWM) expires on July 31 to open up analysts to post ratings. The IPO lockup period expires for a block of shares of Atlas Energy Solutions (NYSE:AESI).

Dividend watch: Companies projected to boost their quarterly dividend payouts include Diamondback Energy (NASDAQ:FANG) to $1.03 from $0.80, Sturm, Ruger (RGR) to $0.39 from $0.32, KLA Corp (KLAC) to $1.45 from $1.30, Wingstop (WING) to $0.21 from $0.19, and Papa John's International (PZZA) to $0.45 from $0.42. See Seeking Alpha's list of Quick Dividend Stock Picks.

Apple earnings preview: Apple (AAPL) steps up to the earnings batter's box on August 3. The consensus estimate are for the tech giant to report revenue of $81.8B and EPS of $1.19. Morgan Stanley expects Apple (AAPL) to post an in-line Q2 earnings report, but guide Q3 revenue and gross margin materially higher than the current consensus estimates, reflecting stable iPhone builds, seasonal Mac strength, low-teens Services growth, and continued secular and cyclical margin tailwinds. That would break a streak of five consecutive quarters of Apple guiding forward quarter estimates below the consensus mark. For Q2, the prevailing view is that iPhone and iPad revenue will decline from a year ago, but Mac revenue and Services revenue will post solid growth. On the conference call, investors will be watching for the view from Cupertino on gross margins, App store spending, and Vision Pro color. Apple could also shake things up with an update on if it is developing a large language model of AI, similar to Microsoft's (MSFT) Bing and Google's (GOOG) Bard. On the last earnings call, CEO Tim Cook said the Cupertino tech giant would roll out AI on a "very thoughtful" basis. Wedbush Securities analyst Dan Ives thinks a transformational AI trend is being seen across all facets of the enterprise and consumer worlds that will inject roughly $800B of new IT projects and spending into the tech world over the next decade.

Amazon earnings preview: Amazon (AMZN) will report earnings on August 3 just a few weeks after the e-commerce giant's Prime Day event stirred up the retail sector. Consensus estimates on Amazon stand at revenue of 131.6B, EPS of $0.66, operating income of $4.70B, and a gross margin rate of 46.5%. The AWS business is seen generating revenue of $21.7B during the quarter, which would represent a deceleration in growth to +10% year-over-year from +16% in Q1. Morgan Stanley expects the profit numbers for Amazon to come in stronger than anticipated due to shipping and fulfillment cost per unit efficiencies. Crucially, Amazon noted last quarter that it has seen a 15% reduction in the distance items are traveling from fulfillment centers to customers, a 12% reduction in touches, and improvements in inventory placement. "With the stock currently trading at ~48X/15X NTM EBIT/EBITDA (a ~10%/25% discount to the long-term average multiple), we see room for upside driven by both multiple appreciation and earnings revisions," previewed the firm. Important topics for the conference call include the read-through on AI innovation, healthcare-related opportunities, and the overall cost structure in place. During the earnings conference call, Amazon (AMZN) is expected to issue its outlook for the full year, but not directly address the potential headache of a FTC lawsuit. Options trading implies a share price swing of 7% up or down for Amazon after it reports. The stocks that have correlated the closest to Amazon in trading right after earnings day are Global-e Online (GLBE), Farfetch (FTCH), and Wayfair (W). The stocks that have correlated the closest to AMZN in general over the last two years are Etsy (ETSY), ContextLogic (WISH), and Chewy (CHWY).

Eyes on auto: A big week in the automobile sector is ahead on the heels of the earnings reports from General Motors (GM) and Ford (F). Chinese electric vehicle makers NIO (NIO), XPeng (XPEV), and Li Auto (LI) will report on July deliveries just days after Volkswagen (OTCPK:VLKAF) rattled the sector with an investment and collaboration deal with XPeng. In the U.S., there are more signs that auto demand is holding up. J.D. Power forecast that new-vehicle sales rose 21.5% in July, marking the fourth consecutive month of double-digit growth. Total new-vehicle sales for July, including retail and non-retail transactions, are projected to reach 1,320,982 units. Total sales of new vehicles in July are expected to reach 1,320,982 units, a 21.5% increase compared to last year when adjusted for selling days. The seasonally adjusted annualized rate for total new-vehicle sales is expected to be 16.0M units, up 2.6M units from July. "July continues the prevailing theme of robust sales growth thus far in 2023, facilitated by amplified vehicle production and pent-up consumer demand," noted the research firm. There is also some good news for buyers. As sales volumes have improved, the average new-vehicle retail transaction prices have declined modestly. Only 28.7% of new vehicles are projected to be sold in July above MSRP, which is down from 49.3% in July of a year ago. That development is worth watching as startups such as Rivian Automotive (RIVN), Lucid Group (LCID), and Fisker (FSR) look to ramp up.

Corporate events: Datadog (DDOG) will hold its two-day DASH annual conference on August 2-3. Some analysts expect the company to introduce a new AI product at the event. Amazon (AMZN) has AWS Summit events scheduled in Taipei, Taiwan and Sao Paulo, Brazil during the week. Fisker (FSR) will provide a first look at its future product portfolio at its inaugural Product Vision Day event on August 3. The U.S. automaker said it will unveil its strategic product roadmap. See a detailed list of key events for next week in Seeking Alpha's Catalyst Watch.

Quant ratings: Stocks with recent quant rating changes include Royal Caribbean (RCL) to Strong Buy from Hold, TriNet (TNET) to Strong Buy from Hold, and Ouster (OUST) to Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.

Box office preview: The Barbenheimer box office phenomenon heads into a second weekend after both Barbie (WBD) and Oppenheimer (CMCSA) continued to attract impressive audiences during the week. After opening last weekend with $162M, Barbie consistently drew weekday moviegoers -- and after another $21M on Thursday, has hit $258M in domestic grosses with its sophomore weekend just beginning. That makes it the fifth-biggest 2023 release already, and it's also cruised past half-billion dollars on a worldwide basis. There's no sign of a slowdown as the already ubiquitous movie based on the Mattel (MAT) doll adds another rack of theaters, to hit a total of 4,337 venues. Its double-feature buddy Oppenheimer (CMCSA) opened at $82.5M last weekend, and similarly hasn't slowed down on weekdays, reaching $117.9M domestically and adding another $112M internationally, for a global gross of $230M. The two films will still be the story of the weekend, even as Disney (NYSE:DIS) is set to give another go to a film based on a theme-park ride. Haunted Mansion (DIS) drew $3.1M in Thursday previews and, as a third-place alternative to Barbenheimer, could hit the $25M range or even $30M.

Barron's mentions: Disney (DIS) made the cover this week, with the stock highlighted as being on the rebound. The House of Mouse is said to be back on track toward strong profitability after cutting costs, canceling shows, and redirecting strategy. On a valuation check, the stock was called cheap based on a sum-of-the-parts analysis. The brightest spot in Disney’s portfolio was noted to be the theme parks, cruises, and consumer products businesses, which represented more than a third of revenue last fiscal year and two-thirds of operating profits. Those businesses were noted to have benefited from pent-up demand for travel and experiences by consumers in the U.S. and abroad, which has kept attendance high and given Disney strong pricing power. Underscoring that point, Disney management recently noted that per capita spending at Disney’s parks is more than 40% higher than in 2019, thanks to premium offerings like Genie+ and Lightning Lane. In the long term, Disney's direct-to-consumer business is expected to look more like Netflix’s (NFLX), which is about 50% larger in streaming currently and boasts an operating profit margin of nearly 20%. Adding it all up, the recommendation is to buy Disney on the cheap.