What to Expect in the Week Ahead (LI, U, CRM and HPQ Earnings; PCE Data)

Moomoo Breakfast US joined discussion · Feb 25 18:09

What to Expect in the Week Ahead (LI, U, CRM and HPQ Earnings; PCE Data)

A bevy of retail and technology earnings reports and the Federal Reserve's preferred inflation measure will be this week's highlights.

Monday's earnings highlights will include results from $Li Auto (LI.US)$, $Workday (WDAY.US)$, $Zoom Communications (ZM.US)$, and $Unity Software (U.US)$.

$Lowe's Companies (LOW.US)$, $Bank of Montreal (BMO.US)$, $Bank of Nova Scotia (BNS.US)$, $Rocket Lab (RKLB.US)$ and $Beyond Meat (BYND.US)$ report on Tuesday, then $Royal Bank of Canada (RY.US)$, $Salesforce (CRM.US)$, $Snowflake (SNOW.US)$, $HP Inc (HPQ.US)$, and $C3.ai (AI.US)$ go on Wednesday.

$Dell Technologies (DELL.US)$, $NetEase (NTES.US)$ and $SoundHound AI (SOUN.US)$ report on Thursday.

Salesforce Earnings Preview

San Francisco-based software giant $Salesforce (CRM.US)$ is set to announce its Q4 results after the market closes on Wednesday. Analysts are anticipating 35% growth in the bottom line and approximately 10% growth in the top line.

The stock has shown significant growth, around 80%, over a period of 12 months. Meanwhile, it was named one of Bank of America's top picks for 2024, with BofA Analyst Brad Sills saying the company is well positioned to continue capturing share of the cumulative $200B market.

Consensus EPS Estimates: $2.27

Consensus Revenue Estimates: $9.22B

HP Inc Earnings Preview

$HP Inc (HPQ.US)$ is scheduled to announce its quarterly earnings update after the closing bell on Wednesday.

Recent disclosures revealed that Berkshire Hathaway decreased its stake in the company during Q1, reducing its holdings from 102.5M shares to 22.9M shares.

In a positive development, last week, HSBC upgraded HP to Buy from Hold, citing favorable sector dynamics and expanding margins. The firm also raised the price target on the stock to $33 from $30.

Consensus EPS Estimates: $0.81

Consensus Revenue Estimates: $13.60B

AI-Fueled Momentum in the Final Week of February

The final week of February is expected to maintain Wall Street's AI-fueled rally, even as economic concerns persist, and the Federal Reserve's preferred inflation measure is on deck.

For investors, this week confirms the tech momentum driving markets for the better part of the last year is justified, and many expect it can continue for a while longer. But many worry the writing is on the wall for these market leaders as economic and inflation risks linger.

"It'd be awfully hard to bet against the sort of AI craze in the short term," said Patrick McDonough, portfolio manager at PGIM Quantitative Solutions. "The flip side to that, or maybe the one single cloud that's out in our perfect sunny day, would be the stickiness of inflation, and what that impact is."

Inflation Data

The economic-data highlight of the week will be the Bureau of Economic Analysis' personal-consumption expenditures index for January on Thursday. The consensus estimate for the core PCE, which excludes volatile energy and food prices, is for a year-over-year gain of 2.8%, which would be down from a 2.9% rise through December.

Other economic data to watch this week include the Census Bureau's new home sales data for January on Monday, S&P CoreLogic's Case-Shiller Home Price Indices for December on Tuesday, and the Bureau of Economic Analysis' second estimate of fourth-quarter gross domestic product on Wednesday.

Sectors Performance