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Earnings season is in full swing, and we will be looking out for earnings reports from AT&T T on Wednesday, followed by Amazon.com AMZN on Thursday and Verizon Communications VZ on Friday.
Wide-moat Amazon found itself in a unique position amid the novel coronavirus outbreak. Already a global leader in online commerce, Amazon landed in a comfortable spot as containment efforts hastened and more consumers isolated themselves. Online grocery shopping, telecommuting, and streaming entertainment are among the many reasons we anticipate Amazon will capitalize on coronavirus-related demand. However, we expect supply chain disruptions and a decrease in material consumption could become obstacles for the company.
The consumer cyclical sector can also expect earning reports next week from Tesla TSLA and Starbucks SBUX.
The pandemic has affected the communications sector on a wide spectrum, with some companies benefiting and others struggling. AT&T and Verizon have long dominated the telecom industry. While Verizon has remained stable, shares for AT&T have declined about 20% year to date. The Time Warner acquisition was the latest in a string of AT&T ill-advised capital allocation decisions, in our view. Still, we believe AT&T’s most important segments (wireless and media) are solid businesses on their own. Netflix NFLX is another name in the communication sector we will be looking out for on Tuesday.
Coca-Cola KO is also expected to report earnings on Tuesday.
We are also looking out for big names in the financial-services sector, including Visa V, T. Rowe Price TROW, TD Ameritrade AMTD, and E*TRADE Financial ETFC. In the industrials sector, 3M MMM and Intel INTC are expected to report their earnings Thursday.