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Earnings, ISM non-manufacturing — What to know in the week ahead

Heidi Chung

A steady flow of earnings and economic data are expected to keep investors busy in the upcoming week.

Major companies announcing quarterly results include Uber, Peloton, Under Armour, Disney, Square, Qualcomm, and Roku.

Uber’s third-quarter results due out Monday come on the heels of rival Lyft’s (LYFT) better-than-expected results last week. After hitting public markets earlier this year, both Uber and Lyft stocks have struggled. After pricing its IPO at $72 per share, Lyft shares were trading at $42.98, as of Friday’s close, while Uber was at $31.37 after pricing shares at $45.

“We are neutral to incrementally positive for Ridesharing market demand given the 63% Y/Y revenue growth Lyft reported and we are more positive on Uber’s profitability trends in part due to Lyft commentary about a more rational market environment,” RBC analyst Mark Mahaney wrote in a note Friday. Mahaney expects Uber to report $16.7 billion in gross bookings for the third quarter, which implies 31% year-over-year growth.

Uber’s lock-up period will officially expire two days after its third-quarter earnings results. Approximately 1,682.5MM shares will become eligible for sale, according to Mahaney’s estimates. Shares will likely be under significant pressure this week with that event looming.

A trader wears the Uber logo on his back on the floor of the New York Stock Exchange (NYSE) during the Uber Technologies Inc. IPO in New York, U.S., May 10, 2019. REUTERS/Andrew Kelly

Peloton is another recent IPO gearing up to report quarterly results this week. It’s been a rough ride for Peloton since hitting the public markets in September. The home fitness brand’s shares closed below their $29 IPO price on the first day of trading and have never gotten back to that level since. Peloton stock closed at $24.99 per share on Friday. Despite the underperformance, analysts are optimistic on the future of the company.

“Peloton is well positioned to scale via its powerful brand, vertically integrated model and large addressable market; we forecast ramping hardware and subscriptions given geo expansion and rising awareness,” Cowen analyst John Blackledge wrote in a note Friday. Blackledge has an Outperform rating on Peloton stock with a $34 price target, which represents a 36% increase from its current trading levels.

Meanwhile on the economic data front, market watchers will get the latest Institute for Supply Management’s Non-Manufacturing Index reading for October.

“Even as the non-manufacturing sector has weathered the economic headwinds of slowing global demand and the trade dispute with China to a better degree than the manufacturing sector, the headwinds have still had a dampening impact on the sector,” Wells Fargo said in a note to clients Friday. “The headline index has declined, on average, since its late 2018 peak and currently stands at a three-year low. Encouragingly, the overall performance remains in expansionary territory, though the deteriorating trend is consistent with a meaningful slowdown in growth.”

Much like Wells Fargo, economists at Nomura expect October’s non-manufacturing sector to have held up much better than the manufacturing sector. “We continue to expect elevated business uncertainty despite the recent suspension of additional US tariffs on products from China. This environment suggests downside risk remains, but we expect the non-manufacturing sector to remain more resilient to this risk compared to the manufacturing sector,” the firm said.

Earnings calendar

Monday: Ferrari (RACE), Sprint (S), Under Armour (UAA) before market open; Uber (UBER), Shake Shack (SHAK), Marriott International (MAR) after market close

Tuesday: Chesapeake Energy (CHK), Peloton (PTON), Mylan (MYL), Regeneron (REGN), Match Group (MTCH) after market close

Wednesday: Wendy’s (WEN), Coty (COTY), Capri Holdings (CPRI), CVS (CVS) before market open; Wynn Resorts (WYNN), Humana (HUM), Expedia (EXPE), Square (SQ), Marathon Oil (MRO), Fox (FOXA), TripAdvisor (TRIP), IAC/InterActiveCorp (IAC), Fitbit (FIT), Baidu (BIDU), Qualcomm (QCOM), Roku (ROKU) after market close

Thursday: Ralph Lauren (RL) before market open; Activision Blizzard (ATVI), Zillow Group (ZG), Disney (DIS), Lions Gate (LGF-A), Take-Two Interactive (TTWO), Booking Holdings (BKNG) after market close

Friday: N/A

Economic calendar

Monday: Durable Goods Orders, September final (-1.1% expected, -1.1% prior); Durables excluding Transportation, September final (-0.3% prior); Factory Orders, September (-0.4% expected, -0.1% in August); Capital Goods Orders Nondefense excluding Air, September final (-0.5% prior); Capital Goods Shipments Nondefense excluding Air, September final (-0.7% prior)

Tuesday: Trade Balance, September (-$52.5 billion expected, -$54.9 billion in August); Markit US Services PMI, October final (51.0 prior); Markit US Composite PMI, October final (51.2 prior); JOLTS Job Openings, September (7051 in August); ISM Non-Manufacturing Index, October (53.6 expected, 52.6 in September)

Wednesday: MBA Mortgage Applications, week ended November 1 (0.6% prior); Nonfarm Productivity, Q3 preliminary (0.9% expected, 2.3% prior)

Thursday: Initial Jobless Claims, week ended November 2 (215,000 expected, 218,000 prior); Continuing Claims, week ended October 26 (1.690 million prior); Bloomberg Consumer Comfort, week ended November 3 (61.0 prior)

Friday: Wholesale Inventories month-on-month, September final (-0.3% prior); University of Michigan Sentiment, November preliminary (96.0 expected, 95.5 prior)

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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