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The Week Ahead: PepsiCo and Nvidia to Report Earnings

Big names in energy to report, and trade and production data will be released on Friday.

The week will begin with the earnings report from Allergan AGN on Monday. Other companies with earnings announcements include CVS Health CVS and Cisco CSCO on Wednesday.

PepsiCo PEP, which has a Morningstar Economic Moat Rating of wide, will be releasing earnings on Thursday. In December, the company announced its intention to acquire U.S. snack food company BFY Brands for an undisclosed amount. PepsiCo also announced last month that starting this year it will use 100% renewable electricity for all U.S. operations. This is part of its wider goal to become more sustainable and lower its greenhouse gas emissions.

In the energy sector, Dominion Energy D, Duke Energy DUK, and Enbridge ENB will report earnings on Tuesday, Thursday, and Friday, respectively.

The Minnesota Public Utilities Commission voted Monday to resume Enbridge's Line 3 pipeline replacement project after deeming a revised environmental assessment "adequate." The market has been responding positively to this news. Despite the resumption, the pipeline is still not expected to be operational until the end of 2021. Considering these factors, our analysts have reaffirmed their $47 fair value estimate and wide moat rating.

Nvidia NVDA will announce its earnings on Thursday. On Tuesday, Nvidia made a surprise launch of its cloud video-game streaming platform GeForce Now, available in both free and paid tiers. It is being launched as a competitor to Google's Stadia. The narrow-moat company, however, is still facing competitive pressure on pricing from Advanced Micro Devices AMD in the gaming sector, and our analysts maintain that Nvidia's shares are overvalued, with our fair value estimate remaining at $145.

Friday brings a slew of economic reports. This includes retail sales, export prices, import prices, industrial production, and capacity utilization reports for January. Business inventory reports for December 2019 will also be released on Friday.

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