Next week, investors eyes will be on the economy as well as some
key company earnings as markets attempt to continue to make new
In the past week, the S&P 500 Index breached its previous
closing high of 1,565.40. Investors now look to economic indicators
as to the next move for markets.
Next week, earnings from agricultural giant Monsanto (NYSE:
) are expected as well as earnings from food conglomerate Conagra
) and from healthcare provider Accretive Health (NYSE:
Monsanto is expected to report fiscal second quarter EPS on
Wednesday, April 3 of $2.561 compared to $2.28 a year ago.
Analysts at Bank of America have turned more positive on the
stock since its recent deal with Dupont (NYSE DD). "We are
increasing our FY14 EPS estimate to reflect the incremental
royalties and our target price to reflect diminished risks that may
have otherwise dragged on MON's multiple. We continue to use any
volatility into/through March 28th (when the USDA crop planting
intentions report is released) as an opportunity to buy MON."
Sales are expected to grow to $5.236 billion from $4.748 billion
in the same period a year ago. Gross margins are expected to expand
to 56.483 percent from 46.543 percent in the previous quarter. The
options market is expecting a 3.27 percent move in the stock price
on the earnings announcement.
Conagra Foods is also expected to report second quarter results
on Wednesday before the bell.
Analysts at Deutsche Bank have a hold rating on the stock.
"Conagra should continue to benefit from M&A-driven EPS
accretion as well as Long-Term potential synergies from the Ralcorp
deal and less volatility by partly divesting grain milling.
However, we view core fundamentals as challenging, leverage is high
(3.9x net debt/EBITDA) and are worried over slower private label
Conagra is expected to report fiscal third quarter EPS of $0.562
vs. $0.51 a year ago with sales expanding to $3.848 billion from
$3.373 billion a year ago. Gross margins are expected to improve
23.66 percent from 23.44 percent in the previous quarter and the
options market is expecting a 2.9 percent move in the stock
Lastly, Accretive Health is expected to report fourth quarter
operations on Thursday.
Analysts at Oppenheimer have an outperform rating on the stock
with a $15.00 price target. "We continue to believe AH's current
valuation assumes a zero growth scenario. Because new business
contributes essentially zero margin in year one, we apply a mature
EBITDA margin to the company's existing revenue base, which yields
an EV/EBITDA multiple slightly below 6x. Our $15 PT equates to ~9x
mature EBITDA on the existing business."
The company is expected to report EPS of $0.09 compared to $0.17
a year ago with sales expected to be reported at $236.889 million
vs. $260.08 million a year ago. Gross margins are expected to
improve to 21.937 percent from 20.486 percent from the previous
On the economic calendar, investors will be eyeing key economic
data from the US as well as central bank decisions from Europe and
The Bank of England and the European Central Bank are both
expected to announce interest rate decisions Thursday, April 4 and
the Bank of Japan is expected to increase easing efforts Thursday
night in its policy statement.
Also, investors will be eyeing the Non-Farm Payrolls Report for
the U.S. due out Friday morning before the market opens.
Earnings Expected From: GenCorp (NYSE:
), Harvest Natural Resources (NYSE:
) and GMX Resources (NYSE:
).Economic Releases Expected: Markit U.S. PMI, ISM Manufacturing
Index, Reserve Bank of Australia Interest Rate Decision and FDIC
Rules on Loan Purchases.
Earnings Expected From: Maxwell Technologies Inc (NASDAQ:
) and Magnum Holder Resources (NYSE:
).Economic Releases Expected: the Eurozone Unemployment Rate, ECB
Board Member Benoit Coeure, U.S. Factory Orders, Fed Presidents
Kocherlakota, Evans and Lockhart are expected to speak, Total
Vehicle Sales and Domestic Vehicle Sales and the final HSBC China
Services PMI are to be released.
Earnings Expected From: Monsanto and Conagra Foods.Economic
Releases Expected: Eurozone CPI, MBA Mortgage Applications, ADP
Employment Survey, ISM Non-Manufacturing Index and speeches from
Fed Presidents Williams and Bullard.
Earnings Expected From: Accretive Health,Economic Releases
Expected: Eurozone composite and services PMI's, Bank of England
Interest Rate decision, Challenger Job Cuts, the European Central
Bank Interest Rate decision, Eurogroup Finance Minister Jeroen
Dijsselbloem is expected to speak, ECB President Draghi is to hold
his press conference following the interest rate decision, Initial
Jobless Claims, speeches from the Fed's Evans, George, Yellen and
the Bank of Japan Interest Rate decision.
Economic Releases Expected: U.S. Trade Balance, U.S. Non-Farm
Payrolls, U.S. Unemployment Rate and Consumer Credit.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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