The Week Ahead: Ringing in the New Decade With Earnings From Walgreens and More

We enter the first full week of the new decade; earnings reports and economic data will begin pouring in for fourth quarter. For next week’s earning releases, we are watching for Bed Bath & Beyond BBBY, Constellation Brands STZ, and Walgreens WBA, all slated to report on Wednesday.

Bed Bath & Beyond had made what we believe were overdue changes across its leadership team late last year. These changes were sweeping indeed: The firm announced the departures of its chief merchandising officer, chief marketing officer, chief digital officer, chief legal officer, and chief administrative officer as CEO Mark Tritton settled into his role. Our analysts note that Tritton, with his extensive past career at Target, should see a healthy interest piqued for these newly opened roles. We maintain our fair value estimate of $11.40 and maintain that shares are overvalued. However, if the new plan can halt market share deceleration and set Bed Bath & Beyond back on track to gain clout with consumers, we could reconsider our negative moat trend rating.

One of the largest multicategory alcoholic beverage suppliers in the U.S., Constellation Brands, reports earnings on Wednesday. Known for brands including Corona, Modelo beers, and Svedka vodka, the narrow-moat company has put forth continued commitment to its key brands. Its beer business drove results for its portfolio, accounting of 56% of second-quarter sales. Our analysts do not expect a material change to our $212 fair value estimate.

News of Walgreens seeking to go private was announced in November of last year; our analysts believe that the move makes sense, as Walgreens’ management has aspirations to bring wellness services to its stores. Our analysts believe that Walgreens has the scale to foster meaningful partnerships to provide both primary healthcare to convenient locations and wholistic care.

Other notable small- and mid-cap names slated for earnings announcements next week are Commercial Metals CMC, Lennar LEN, and The Simply Good Foods SMPL.

There will be a bundle of economic data releases next week. On Tuesday, trade balance for November releases. Consumer credit data follows the next day. On Friday, labor-related data releases for average hourly earnings, unemployment rate, and average workweek for December are all due.