Anthem Inc, Chipotle Mexican Grill, Inc., Under Armour Inc on Earnings Watch List

ANTM, CMG, and UAA report earnings next week

Joe Bell, CMT
Jan 27, 2017 at 10:32 AM
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A lot of major companies have earnings reports next week. Three stocks on our radar right now are Anthem Inc (NYSE:ANTM), Chipotle Mexican Grill, Inc. (NYSE:CMG), and Under Armour Inc (NYSE:UAA), which each face heavy skepticism on Wall Street.

ANTM will report before the open on Wednesday, Feb. 1. The insurance stock is in an intriguing spot, having recently broken out of a consolidation pattern, and now sitting above a descending trendline connecting a series of lower peaks. The shares just hit an annual high of $154.61 on Wednesday, and were last seen nearby, at $152.51, with the underfoot $150 mark serving as potential support.

antm daily jan 27

However, analysts remain skeptical, with nine of 15 doling out tepid "hold" ratings. Also, options traders have bought to open more puts than calls in the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). A strong earnings report could send these ANTM skeptics running, giving the shares an extra boost.

Another stock worth following is CMG, which has been hated by analysts and others in recent years due to food-safety concerns. But the shares have been forming a long-term bottom around the $400 century level -- last seen at $415.43 -- and recently muscled above the 200-day moving average for the first time since October 2015. Plus, activist investor Bill Ackman disclosed a stake last year.

As alluded to, the brokerage crowd isn't a fan of CMG, which leaves a lot of room for upgrades. Specifically, 17 of 24 analysts rate the restaurant stock a "hold" or worse. The shares are also heavily shorted, with one-fifth of Chipotle's float dedicated to short interest -- hinting at short-squeeze potential. The company reports earnings after the close next Thursday.

Finally, UAA has very bearish sentiment, though its technicals are bad, too, so it's not as powerful a contrarian set-up as we usually like. Year-over-year, the stock is down by roughly one-third, at $29.10. But if earnings next Tuesday morning exceed the already low expectations, there's a ton of room for negative sentiment to unwind, and potentially create tailwinds.

Eighteen of 30 analysts rate UAA a "hold" or "strong sell," plus it would take nearly three weeks for short sellers to cover their positions, at the stock's average daily volume. Options traders are very bearish, as well. Under Armour's 10-day put/call volume ratio at the ISE, CBOE, and PHLX is 1.99 -- just 8 percentage points from an annual peak.

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