This week marks the first set of quarterly reports to be released in 2021. Several companies are expected to announce quarterly results this week. For shrewd investors, it will be important to evaluate the management commentaries in these reports for the upcoming months because they may set the tone for the markets in the near term at least.
A strong showing and outlook may set a bullish tone for the start of 2021. Other factors that will influence the direction of the markets include today’s Georgia U.S. Senate runoff elections and the disposition of the incoming Biden Presidential administration later in the month.
Companies like Micron Technology, Inc. (MU), Constellation Brands, Inc. (STZ), Walgreens Boot Alliance, Inc. (WBA), and ConAgra Brands, Inc. (CAG) are slated to announce their results this week. These companies are expected to see a growth in revenue and EPS in the soon-to-be reported last quarter, which, we think, should drive their stocks higher.
Micron Technology, Inc. (MU)
MU provides semiconductor solutions globally. The company is involved in dynamic random-access memory (DRAM), NAND flash, and NOR flash products. MU’s stock gained 37.9% in 2020.
The company recently developed and launched the world’s first 176-layer 3D NAND flash memory, which has a range of applications in smartphones, intelligent edge, and data centers. The company has also started mass producing the world’s first universal flash storage (UFS) multichip package with low-power DDR5 (LPDDR5) DRAM.
MU will be reporting its first fiscal quarter report on January 7. During the last quarter, the company saw a 24% year-over-year increase in revenue. Its revenue from DRAM sales was up 29% during the same period.
MU is expected to see a revenue growth of 11.4% for the quarter ended November 30, 2020 and 13.7% in 2021. The company’s EPS is estimated to grow 47.9% for the quarter ended November 30, 2020 and at a rate of 14.2% per annum over the next five years.
How does MU stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
B for Industry Rank
A for Overall POWR Rating
The stock is also ranked #6 of 88 stocks in the Semiconductor & Wireless Chip industry.
Constellation Brands, Inc. (STZ)
STZ is involved in the production and marketing of various brands of beer, wine, and spirits. The company has operations in the United States, Canada, New Zealand, Mexico, and Italy. STZ’s stock rose 15.6% in 2020.
STZ recently received antitrust clearance from the FTC to divest a part of its portfolio along with some of its facilities in California, New York, and Washington state. The company has also added a new wine called Meiomi Cabernet Sauvignon to its wine portfolio.
STZ has announced that it will report its fiscal third quarter report on January 7. During the last quarter, the company’s operating income increased 17% compared to the same period last year. The company’s operating cash flow increased 2% during the same period.
STZ’s EPS is expected to grow 11.2% year-over-year to $2.38 for the quarter ended November 30, 2020. EPS is also expected to rise 3.4% in 2021 and 9% per year over the next five years. Its revenue is estimated to increase 3.9% for the quarter ended February 28, 2021 and 0.7% in 2021.
STZ’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. It is ranked #6 of 29 stocks in the Beverages industry.
Walgreens Boot Alliance, Inc. (WBA)
WBA operates a chain of drug stores in the United States. In addition to pharmaceuticals, its stores provide consumer goods and services. WBA’s stock price has increased 15.7% over the past three months.
WBA has partnered with VillageMD to open 40 new Village Medical at Walgreens full-service primary care clinics by the end of the summer in 2021. The company has also reinvented its loyalty program with the name of myWalgreens to offer customers several new benefits.
WBA is slated to announce its quarterly results on January 7. During the last quarter, WBA’s sales increased 2.3% compared to the same period last year. During the same quarter, sales from the company’s e-commerce portal boots.com increased 155% compared to last year.
WBA’s revenue is expected to grow 1.9% for the quarter ended November 30, 2020 and 2.9% in 2021. The company’s EPS growth is expected to be 1.3% in 2021 and 7% per annum over the next five years.
In our POWR Ratings systems, WBA has been accorded a grade of “B” in Industry Rank. In the 4-stock Medical Drug Stores industry, WBA is ranked #2.
ConAgra Brands, Inc. (CAG)
CAG is a packaged foods company. The company operates a range of brands in the consumer foods and commercial foods categories. CAG’s stock gained 8.7% in 2020.
The company recently launched the first-ever range of soups with plant-based meat alternatives under the Gardein brand. CAG has also launched a new sustainable package design for its Swiss Miss Hot Cocoa line of products.
CAG will announce its fiscal second quarter results on January 7. During the last quarter, the company’s net sales increased 12.1%, and the company’s operating margin increased 800 basis points to 19%.
CAG’s revenue is estimated to increase 6.1% for the quarter ended November 30, 2020 and 4.6% for the quarter ended February 2021. The company’s EPS is expected to rise 15.9% for the about-to-be reported quarter, 10.5% in 2021 and 7% per year over the next five years.
CAG’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” for Trade Grade. It is ranked #16 out of 65 stocks in the Food Makers industry.
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MU shares were trading at $77.04 per share on Tuesday afternoon, up $2.99 (+4.04%). Year-to-date, MU has gained 2.47%, versus a -0.90% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...
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