3 Stocks To Watch In The Coming Week: Target, Twitter, Costco Wholesale
Investing.com | Mar 01, 2020 04:43
After witnessing the worst week since the 2008 financial crisis, investors are bracing for another wild week as the coronavirus outbreak continues to rattle markets globally. Over the weekend, the U.S. reported its first virus-related death, while other global outbreak hotspots, including Iran and South Korea, saw more people falling sick.
The S&P 500 tumbled more than 11% during the last week as evidence mounted the disease will hamper economic growth. Activity in China’s manufacturing sector contracted sharply in February, with the official gauge hitting the lowest level on record.
With a more than 10% plunge in major indexes, the bond market also sent recession signals as the yield on the benchmark 10-year Treasury note, which moves inversely to price, dropped to an all-time low.
While the coronavirus outbreak will continue to be the major market-moving event, here are three major stocks which we are monitoring during the week ahead:
h2 1. Target /h2The big-box retailer, Target (NYSE:TGT), will report its fourth quarter earnings on Tuesday, Mar. 3, before the market opens. The retail chain’s holiday sales fell well short of expectations, dimming hopes for another blowout quarter.
Analysts on average are expecting $23.4 billion in sales and $1.65 earnings per share. Holiday sales were sluggish, the company said last month, signaling that the retailer’s turnaround is losing steam.
Target’s November-December sales rose 1.4% for stores and digital channels operating for at least 12 months. The company warned in January that growth for its full fiscal fourth quarter, which includes January, would likely fall short of the 3% to 4% gain it previously predicted.
“We faced challenges throughout November and December in key seasonal merchandise categories and our holiday sales did not meet our expectations,” said Chief Executive Brian Cornell, who launched a turnaround plan in 2017 that included store remodels and investment in Target’s digital platform.
Target shares have fallen about 20% this year, underperforming the benchmark S&P 500 Index. The stock closed at $103 on Friday after falling 2.48% for the day.
h2 2. Twitter/h2
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Social media giant Twitter (NYSE:TWTR) may see elevated activity in its shares next week, after news broke on Friday that an activist investor, Elliott Management Corp. has taken a sizable stake in the company and plans to push for changes, including replacing Chief Executive Officer Jack Dorsey.
Bloomberg news reported the New York-based hedge fund has nominated four directors to Twitter’s board. Elliott has taken a roughly $1 billion stake and been in talks with Twitter management about its desire for the company to find a full-time chief executive officer.
That most likely would involve replacing co-founder Dorsey, who began a second stint as the company’s CEO in 2015. In addition to his role at Twitter, Dorsey leads Square (NYSE:SQ), a financial-technology firm he also co-founded.
In November, Dorsey said via a tweet that he planned to live in Africa for three-to-six months this year. The announcement surprised executives at Twitter and angered investors frustrated with the company’s performance under the part-time CEO, the Wall Street Journal reported. Twitter shares rose 0.58% on Friday, closing at $33.20, after losing 7.4% during the past week’s correction.
h2 3. Costco/h2The retail sector will come under scrutiny again on Thursday when Costco Wholesale (NASDAQ:COST) reports its fiscal 2020 second quarter results after the close. Analysts are expecting $2.07 a share in profit on sales of $38.2 billion.
Unlike the weak showing by some retailers during their recently concluded quarters, chances are good that Costco will provide a strong report. The company has benefited from robust consumer spending, which helped boost the U.S. economy for much of 2019, even amid worries about slowing global growth.
Comparable sales, meaning revenue from Costco stores open for more than a year as well as online sales, rose 5.2% in the last quarter, while earnings per share were $2.47. But after the coronavirus outbreak, investors will be keen to know about the company's future outlook and whether it's facing any supply-chain related disruptions.
Shares plunged more than 4% on Friday to $281.14, extending the retailer’s past week losses to 10.31%.
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