Wall Street can be a dog-eat-dog world for the uninitiated: if you’re not careful you’ll lose your shirt. That means knowing the best stocks to watch and what events to pay close attention to.
Any sane, productive and profitable investor in today’s high-tech world — which spits out seemingly infinite amounts of undifferentiated information at the speed of light — needs an information filter. And Apple (Nasdaq: AAPL) is one of the few that passed the filter test this week.
Before getting to a preview of this week’s best events, earnings and stocks to watch, here’s a brief look at why Apple stock is even more worthy of dissection than it usually is:
[Read: Should Tech Investors Curb Their Enthusiasm?]
AAPL stock: It’s all about the iPhone. Diehard Apple fans are well aware of the two incredibly important Apple-related days on last week’s calendar: last Tuesday and Friday.
Last Tuesday was the highly anticipated unveiling of three brand new iPhones — the iPhone 8, iPhone 8 Plus and the 10th anniversary, $999 iPhone X — as well as a few other big-name Apple products.
Three long days later, on Sept. 15, eager iFans could finally pony up their dough to order any of those products (except the iPhone X, which we’ll touch on later).
But there’s another milestone date for the tech giant looming this week, and it’s far more important than any demonstration or online shopping cart: The iPhone 8, iPhone 8 Plus, Apple TV 4K and Apple Watch Series 3 will all hit store shelves this Friday.
Consumers’ reception of these products — and most importantly their reception of the iPhone — will be a major focus of Wall Street this week. Expect analysts, journalists and reviewers of every sort to scrutinize the new moneymaking smartphone intensely.
It’s a bittersweet debut though: Many consumers were disappointed to see the iPhone X ship date of Nov. 3, a full six weeks after the other iPhones will become available.
“The delay of the iPhone X launch into November will prompt the Street to revise downward the current year estimates as the new iPhone revenue will be pushed into the March quarter of 2018,” says K C Ma, professor of finance at Stetson University.
Not everyone is so bearish, though.
[See: The 25 Best Blue-Chip Stocks to Buy for 2017.]
“The iPhone X will indeed be the ‘X factor’ for Apple that could send the share price rocketing toward $200 with strong numbers,” says Chad Bockius, chief marketing officer of Vast, a provider of big data solutions for many of the Global 1000’s largest automotive businesses. That would imply upside of around 25 percent from Friday’s $159.88 closing price.
While Ma could be right about some nearer-term revenue expectations being revised downward, the market has already had nearly a week to react, implying that any major fluctuations in the AAPL stock price will result from early sales data, product reviews and the product mix.
Of course, it’s not like equity markets will halt trading until Apple can get the iPhone 8 out. Here’s a look at more events and stocks to watch this week, other than the Cupertino-based elephant in the room.
Macro Events Sept. 18 -22
The 72nd United Nations General Assembly. President Donald Trump will attend his first U.N. summit in New York as leaders from 193 countries across the world convene to discuss and debate global matters beginning Tuesday. Foremost on the mind of Wall Street, and most U.N. attendees for that matter, will be North Korea’s volatile behavior and nuclear threats. The Syrian civil war, the resulting refugee crisis, an ethnic cleansing of Rohingya in Myanmar and the cost structure of the U.N. itself will also be discussed.
Federal Reserve meeting. The Federal Open Market Committee will have a two-day meeting between Tuesday and Wednesday where the central bank will give an update on its path for raising interest rates. Always a closely watched event, expect discussion about how Hurricanes Harvey and Irma have impacted the rate schedule.
Earnings in Focus
Adobe Systems (ADBE). Shares of creative software company Adobe Systems, the business behind iconic programs like Photoshop, Acrobat, Flash, Dreamweaver and the PDF file format, have crushed the market in 2017, roaring about 50 percent higher. Outperformance is nothing new for ADBE stock, which also boasts 360 percent gains over the last five years.
Analysts expect ADBE to grow revenue by 23 percent in fiscal 2017 to $7.22 billion, a sharp contrast to the $4.13 billion it took in just three years back in fiscal 2014. Consensus analyst estimates see revenue jumping 24.2 percent to $1.82 billion in the August quarter, and investors will see how accurate that is when Adobe announces after the bell on Tuesday, Sept. 19. Earnings per share growth is expected to clock in above 33 percent as well for the quarter, growing from 75 cents to $1.01.
Bed Bath and Beyond (BBBY). On the opposite end of the performance spectrum is Bed Bath and Beyond, the home furnishings retailer that’s been hammered by Wall Street both in 2017 (off 30 percent) and over the past five years (down 60 percent).
BBBY will also announce its results Tuesday after the market close, but that’s where the Adobe comparisons end. Analysts expect revenue growth of just 0.6 percent to $3.01 billion, while EPS is actually slated to fall 14 percent to 95 cents, down from $1.11 in the same quarter a year ago.
Still, some industry watchers think BBBY stock could be oversold and poised for a beat.
“After the precipitous drop of the last five years, there’s reasonable upside to Bed Bath & Beyond as the company’s earnings power has adjusted to the new post-Amazon ( AMZN) retail landscape,” Ma says.
And with a price-to-earnings ratio of just 6.6 (ADBE’s is 53.8 by comparison), “investors have already priced in significant deterioration in operating margins.”
This Week’s Earnings Calendar
Tuesday. AutoZone ( AZO), Yingli Green Energy ( YGE). Adobe Systems, Bed Bath & Beyond, FedEx Corp. ( FDX).
Wednesday. General Mills ( GIS). Herman Miller ( MLHR).
[See: 9 Ways to Spot Value Trap Stocks.]
Friday. CarMax ( KMX), Finish Line ( FINL).
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Market Events, Plus Best Stocks to Watch This Week (AAPL, ADBE, BBBY) originally appeared on usnews.com
