All Fine Here … How Are You?
Wednesdays were made to be different, and we’re about to hit you with our Wednesday Wiped-Out Wrap-Up!
What’s that? Well, it’s Wednesday, for starts. Also, it’s now July … somehow.
What’s wiped out? Most of the hard-hitting stock news that we usually rant and rave about is awash with virus fears and overwhelming uncertainty. Neither the Dow or S&P 500 Index knew what to do with themselves either, even after a hot and high start to the trading day.
In the summer doldrums, a lull in stock news is expected. But throw in some potential lockdown uncertainty and pump the virus fears up a notch … and anyone left piecing together the market could use a handy earnings wrap-up, like a Cracker Jack box of market hot takes.
Scattered across this great nation are your Wednesday Wrap-Up Warriors: myself (Joe Hargett, yours truly), my research pit crew and the ‘Stuff technical crew too. We saved you today’s best bits — the market’s finest select stories brought to you by the Great Stuff Team.
The biggest story on our desks today?
Beyond Meat Inc.’s (Nasdaq: BYND) continued journey into the physical-retail world. It’s been a whole two days since we last checked in on the meatless wonder when Monday offered you a buying opportunity after the company’s surprise double downgrade.
BYND is already up 11% in the past two days, with much of the gains coming with the announcement of a partnership with Alibaba Group Holdings Ltd. (NYSE: BABA). The deal gives Beyond Meat a retail store debut in China through Alibaba’s Freshippo stores — its mix of digital and physical shopping. (Cough cough, Amazon Go, anyone?)
OK, so if that’s the biggest news, what else is going on these days? I’m tired of COVID-19 news. Is earnings season still a thing?
Earnings? They’re … a bit dull right now compared to the big-headline companies we saw report in weeks past. Granted, relatively “boring” earnings are a welcome sight right now, but there’s a reason why no one’s talking about General Mills Inc.’s (NYSE: GIS) predictable-yet-decent earnings.
I mean, if you’re super cereal about it, General Mills earnings beat estimates by a whopping $0.04 per share, with sales also topping estimates by about $38 million. The company reported an “…unprecedented increase in demand for food at home and a corresponding decrease in away-from-home food demand.”
No alarms, and no surprises there…
Like the cold patch of a semi-cooked Hot Pocket, today’s spate of earnings exposés are mostly ho-hum … with a little bit of meh thrown in there for good mehsure. That’s right: There’s no real good, bad or ugly here … just different shades of “decent.”
And this leaves us with two big-name earnings spots: FedEx Corp. (NYSE: FDX) and Constellation Brands Inc. (NYSE: STZ), the alcohol goliath responsible for brands like Svedka, Modelo, Corona and Clos du Bois.
Depending on whom you ask, both companies are equally key parts of the pandemic markets … and we can learn a lil bit from both of their reports. Let’s dive in…
Stoned, Sealed, Delivered
We can sum up both sets of earnings in one line: I didn’t expect much … and I’m still a bit let down.
First, FedEx reported earnings of $2.53 per share, which came in well above analyst expectations for $1.52. The problem here is that analysts didn’t have high hopes in the first place, and earnings are still down almost 50% from year-ago levels.
Without that sweet, sweet corporate cash using FedEx’s business shipping, the company’s gonna hurt — there’s no question about it. What analysts really wanted to see was how many stuck-at-home folks would carry the slack.
With a surge from Amazon hoarders and online boredom fixers, FedEx’s “…residential volumes rose 72% from last year and higher-margin FedEx ground revenues jumped 20%.” (I, for one, feel for any of you FedEx drivers carrying weight sets up countless driveways — the real quarantine workout here.)
The numbers from Constellation Brands are similarly shrug worthy. The alcohol and spirits maker reported $2.30 in per-share earnings on revenue of $1.96 billion. And just like with FedEx, the company beat analysts’ lowball expectations, set at $1.99 in per-share earnings on revenue of $1.94 billion.
The report was quick to point out that earnings would’ve come in at “…$2.44 per share if losses from its investment in Canadian weed company Canopy Growth are excluded…” Now, I’m all for fairness in reporting, but wouldn’t most news be nice if you just, you know, excluded the not-so-great bits?
FDZ shares were up about 11% today, while STZ shares rallied a modest 6%. The takeaway here is that consumers have had no qualms about embracing online shopping (and shipping). But at this point, even meeting an already-low bar counts as an earnings beat.
Editor’s Note: Need a jolt after lackluster earnings?
There’s a radical energy revolution coming soon to 50 million American homes … it’s not solar or wind, but a new technology that may be the most lucrative story of 2020. That’s right — power that never runs out, operates 24/7, on demand. And virtually free of charge.
Better still, it’s poised to create more millionaires than pot stocks, cryptos and Big Tech combined!
It’s time we turn once again to the Poll of the Week!
Last week’s poll drum rolled quite a hoopla when we asked your thoughts on new lockdowns in your neck of the worldwide woods.
About 53% of you don’t see more lockdowns on the horizon, stating: “We handled it well enough here the first time, thanks.” (Jealous … let me know what that’s like, will you?)
With all that in mind, we’re quickly approaching the good ol’ Fourth, and everyone’s talking about plans, no plans and even anti-plans. (Fireworks on TV? Nah, I want to feel that BOOM upset my too-full stomach.)
So, what are your Fourth of July plans? Let us know below!
Reach out to GreatStuffToday@BanyanHill.com with any other celebration ideas you have — if you’re comfortable sharing, that is.
Great Stuff Grilled: Ask Us Anything!
Got any other pressing thoughts to share with us? Good!
My friend, you’ve got the whole Great Stuff Team at your beck and call today. I mean, you do every day, but you see, tomorrow will bring a new edition of Reader Feedback. And we know that you’ve got something to share for it!
So why not drop us a line? Let us know how you’re doing out there!
Until next time, stay Great!