Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jun 22, 2022 at 7:28 AM
  • Buzz Stocks

Today's Stock Market News & Events: 6/22/2022

by Schaeffer's Digital Content Team

Today there is no economic data scheduled for release. 

The following public companies are slated to release corporate earnings today, June 22:

Korn Ferry (NYSE:KFY -- $53.84) provides organizational consulting services worldwide. Korn Ferry will report its Q2 earnings of 2022 before the bell today.

Winnebago Industries Inc. (NYSE:WGO -- $45.76) manufactures and sells recreation vehicles and marine products primarily for use in leisure travel and outdoor recreation activities. Winnebago will report its Q2 earnings of 2022 before the bell today.

H.B. Fuller Co. (NYSE:FUL -- $61.13) formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products worldwide. H.B. Fuller will report its Q2 earnings of 2022 after the close today.

KB Home (NYSE:KBH -- $25.61) operates as a homebuilding company in the United States. KB Home will report its Q2 earnings of 2022 after the close today.

Steelcase Inc. (NYSE:SCS -- $10.44) provides a portfolio of furniture and architectural products in the United States and internationally. Steelcase will report its Q2 earnings of 2022 after the close today.

Worthington Industries Inc. (NYSE:WOR -- $40.96) focuses on value-added steel processing and manufactured metal products in North America and internationally. Worthington will report its Q2 earnings of 2022 after the close today.

Looking ahead to tomorrow, the usual initial and continuing jobless claims are on deck. Further, current account data for the first quarter is due out, in addition to the S&P Global U.S. manufacturing and services PMIs.

All economic dates listed here are tentative and subject to change.

Published on Jun 21, 2022 at 4:28 PM
  • Market Recap

Stocks returned from the holiday weekend determined to bounce back from last week's historic bloodbath. The Dow added 641 points to notch its best win since May 4, while the S&P 500 and Nasdaq also settled firmly higher, with energy and mega-cap tech stocks leading the way. The Cboe Volatility Index (VIX) logged its third-straight loss, but closed above the psychologically significant 30 level. Meanwhile, as gas prices rise, U.S. President Joe Biden is reportedly mulling over a holiday on the federal gas tax. 

Continue reading for more on today's market, including:

  • The sun could soon shine for this solar stock.
  • What the Kellogg split means for the stock.
  • Plus, Chewy stock upgraded; a C-suite shakeup at DocuSign; and a pre-earnings look at FDX.

The Dow Jones Average (DJI -  30,530.25) added 641.5 points, or 2.2%, for the day. UnitedHealth Group (UNH) led the gainers, adding 6.3%. Walt Disney (DIS), meanwhile, paced the laggards with a 1.1% drop.

The S&P 500 Index (SPX - 3,764.79) rose 90 points, or 2.5% for the day. Meanwhile, the Nasdaq Composite (IXIC - 11,069.30) gained 271 points, or 2.5% for the session.

Lastly, the Cboe Market Volatility Index (VIX - 30.19) fell 0.8 point, or 2.7% for the day.

closing indexes june 21

nyse and nasdaq june 21

5 Things to Know Today

  1. Activision Blizzard (ATVI) shareholders approved a proposal for a public report on the company's efforts to reduce employee abuse, discrimination, and harassment. (CNBC)
  2. Existing home sales fell 3.4% in May for a fourth-straight monthly drop, amid rising mortgage rates and home prices that have surpassed a record median of $400,00. (MarketWatch)
  3. Chewy stock surged after scoring a fresh Wedbush upgrade
  4. How DocuSign stock reacted to the departure of its CEO. 
  5. What you need to know about FedEx stock before earnings.

earnings june 21

uvol june 21

Oil Prices Settle Higher Amid Tight Supply

Oil prices settled higher on Tuesday, as black gold worked to partially erase last week's steep losses. Boosting the commodity was a tighter market and the potential for tougher sanctions on Russian crude. In response, July-dated crude expired higher at $1.09, or 1%, to settle at $110.65 per barrel. The new front-month contract for August-dated crude added $1.53, or 1.4%, to settle at $109.52 a barrel.

Gold futures finished lower, however, despite a weaker U.S. dollar. Profit taking, as well as portfolio adjustments, likely weighed on the precious metal. As a result, August-dated gold fell $1.80, or 0.1%, to close at $1,838.80 an ounce.

Published on Jun 21, 2022 at 2:42 PM
  • Quantitative Analysis

 

 
Published on Jun 21, 2022 at 2:26 PM
  • Buzz Stocks

The shares of Docusign Inc (NASDAQ:DOCU) are up 1% to trade at $61.13, even as a major c-suite shakeup is taking place. Specifically, the e-signature software concern's CEO, Dan Springer, is leaving his role, effective immediately. Springer, who assumed the position in 2017 and took Docusign public the following year, will be temporarily replaced by Chairman of the Board Maggie Wilderotter until the company finds its next executive.

While the company withheld a reason for Springer's departure, DOCU's failure to capitalize on its pandemic-related success could hint towards the cause. The equity is down more than 80% from its August 2021 all-time high of $314.76, with things kicking off in December after the company notched its worst day ever following earnings.

Overhead pressure has also been looming, at the long-term resistant 50-day moving average. Docusign stock also dropped after its two subsequent financial reports, with its mid-June results accompanied by a host of bear notes. As a result, the equity is down almost 60% in 2022. 

docuw50ma

Analyst sentiment hasn't changed in the meantime. In fact, of the 14 in coverage, 10 consider DOCU a "hold" or worse, while four rate it a " buy" or better. Meanwhile, the 12-month consensus price target of $92.72 is a 51.3% premium to current levels. 

This pessimism is reflected in the options pits, where traders favor puts. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Docusign stock's 50-day put/call volume ratio ranks in the 96th percentile of annual readings, which indicates a preference for bearish bets compared to the last 12 months.

Options look like the ideal avenue to pursue for those looking to speculate on DOCU, as it sports relatively cheap premium. This is per the equity's Schaeffer's Volatility Index (SVI) of 74%, which stands higher than 32% of readings from the past year. What's more, Trade Desk stock has a knack for outperforming options traders' volatility expectations, according to its Schaeffer's Volatility Scorecard (SVS) of 83 (out of 100).

Published on Jun 21, 2022 at 12:26 PM
  • Earnings Preview

Shipping giant FedEx Corporation (NYSE:FDX) is gearing up to report fiscal fourth-quarter earnings after the close this Thursday, June 23. The stock earlier surged to the $236 level, which has acted as both pressure and support on the charts since FedEx stock's post-earnings bear gap in September 2021, but was last seen flat -- up less than 0.1% to trade at $230.

fdx june 21

Post-earnings reactions during the past two years have been mixed, with four of its past eight reports yielding a positive return, including an 11.7% jump back in August 2020. FDX has averaged a 6.4% swing, regardless of direction, during this time period. This time around, the options pits are pricing in a larger 8.9% next-day move. 

Sentiment among FedEx options players has been bearish of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day put/call volume ratio of 1.47, which sits higher than 93% of readings from the past year. In other words, puts are being picked up at a quicker-than-usual clip. 

Meanwhile, analysts have taken a more optimistic stance. Of the 13 in coverage, all but four call it a "strong buy," with not a "sell" to be seen. Plus, the 12-month consensus price target of $286.89 is a 24.8% premium to current levels. 

Published on Jun 21, 2022 at 11:50 AM
  • Midday Market Check

Markets are extending their rally into the afternoon, with the Dow Jones Industrial Average (DJI) up roughly 557 points at last check, while the Nasdaq Composite (IXIC) and S&P 500 Index (SPX) are building on their morning gains as well. With no specific driver pushing stocks higher, however, many on Wall Street expect today's bounce to fall flat. Meanwhile, the 10-year Treasury yield is still on the rise, and oil is climbing too, with U.S. West Texas Intermediate (WTI) crude last seen up 1.8% at $111.55 per barrel. 

    Continue reading for more on today's market, including: 

    mmc june 21

    Bed Bath & Beyond Inc. (NASDAQ:BBBY) is seeing a surge in bullish options activity today. So far, 29,000 calls have crossed the tape, which is double what is typically seen at this point. The most popular contract is the weekly 6/24 10-strike call, followed by the 7-strike call in the same series, with positions being sold to open at the former. BBBY is up 2.8% at $6.87 at last check, as the retail sector makes a comeback. Separately, Else Nutrition signed an agreement with the company to sell its products with buybuy BABY, a subsidiary of Bed Bath & Beyond. The stock is coming off a June 16, two-year low of $5.94, but has shed 52.7% year-to-date. 

    One of the best stocks on the New York Stock Exchange (NYSE) today is Convey Health Solutions Holdings Inc (NYSE:CNVY). The equity is up 138.4% to trade at $10.30 at last check, on news that TPG Capital will take the company private in a deal worth $1.1 billion, or $10.50 per share in cash. CNVY is currently trading at its highest level since August, toppling several key trendlines, including its 120-day moving average, which has acted as a ceiling for the majority of 2022. 

    cnvy june 21

    One of the worst stocks on the Nasdaq is Neonode, Inc (NASDAQ:NEON). The equity was last seen down 15.8% to trade at $5.38. While it's unclear why NEON is slipping, it is trading back at its lowest level in nearly one month, and now sports a 39.8% year-to-date deficit. 

    Published on Jun 21, 2022 at 11:39 AM
    • Buzz Stocks
     
    Published on Jun 21, 2022 at 11:33 AM
    Updated on Jun 21, 2022 at 11:34 AM
    • Options Recommendations
    On Friday, Valero Energy Corporation (NYSE:VLO) stock pulled back to just above its most recent earnings reaction high around $107.25. This area roughly coincides with VLO’s 80-day moving average, a trendline that hasn’t been breached on a closing basis in 2022, acting as support in April 2021 and  January 2022. It also was the site of resistance in July 2020, implying this moving average has had historical significance. Plus, there’s additional support at the shares’ +50% year-to-date level.

     

    VLO Chart June 21
    The catalyst for this week’s mini-selloff was the rumor and news today that the Biden administration is considering limiting fuel exports. The sharp pullback could also have been exacerbated by an unwinding of long positions related to expiring June 120- and 125-strike calls, which ultimately expired out of the money. Today’s low came around $110, which is the first strike where put open interest exceeds call open interest for all options expiring next week into September standard expiration. Now, VLO has room to run back to heavy call strikes up at $135 and above before September. Additional tailwinds could come from the J.P. Morgan energy conference on June 22.
     
    Shorts remain in covering mode, but short interest is still 30% above its 2019 lows. Options are certainly the route to take a flier on VLO, too, considering the stock’s Schaeffer's Volatility Scorecard (SVS) tally of 98  out of 100. This indicates the equity has consistently realized bigger returns than options traders have priced in over the past year, a boon for options traders.
     
    Finally, our recommended call has a leverage ratio of 5.0 and will double in a 20.4% pop in the underlying equity.

     

    Subscribers to Schaeffer's Weekend Trader options recommendation service received this VLO commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
    Published on Jun 21, 2022 at 10:30 AM
    • Buzz Stocks

    Acadia Pharmaceuticals Inc (NASDAQ:ACAD) stock is one of the worst stocks on the Nasdaq today, down 35.6% to trade at $12.56 at last check. On Friday, the U.S. Food and Drug Administration (FDA) advisory panel voted 9-3 that the biopharmaceutical name's antipsychotic drug, Nuplazid (pimavanserin), which is used to treat psychosis related to Alzheimer's, is not an effective treatment. Since this decision, analysts have been overwhelmingly negative, with the general consensus being that it is unlikely the FDA will approve the drug in August. 

    After the news, J.P. Morgan Securities downgraded ACAD to "neutral" from "overweight," while Jefferies cut its rating to "underperform" from "buy." No fewer than four other analysts slashed their price targets as well, though the 12-month consensus price target of $25.94 is still a 107% premium to current levels. 

    This negative price action has ACAD crumbling to a nine-year bottom, earlier trading as low as $12.24 and falling on the Short Sale Restricted (SSR) list. Year-to-date, the equity is now down 45.7%. 

    Options traders are eyeing the stock, too, with volume running at four times what's typically seen at this point. The weekly 6/24 16-strike put is the most popular by far, with new positions being opened at the weekly 6/24 17-strike call. 

    Published on Jun 21, 2022 at 10:17 AM
    • Analyst Update

    The shares of Chewy Inc (NYSE:CHWY) were last seen up 13.3% at $32.52, following an upgrade from Wedbush to "outperform" from "neutral." The analyst also lifted its price target to $35 from $30, citing "little downside risk," thanks to the company's spending and customer retention.

    Prior to today's analyst coverage, the brokerage bunch was split on CHWY, with nine saying "buy" or better, and eight saying "hold." Meanwhile, the 12-month consensus price target of $43.76 is a 38.8% premium to current levels. 

    The pandemic darling lost 59.3% in the past 12 months, and is now far off its Feb. 16, 2021 all-time high of $120. The company's quarterly earnings earlier this month were well-received, which helped send CHWY off a two-year low, though this rally lost steam near the 50-day moving average shortly after. Today, however, the security could close above this trendline for the first time since early April, should these gains hold. 

    Options traders have been bearish, and a shift in sentiment could put some wind at CHWY's back. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 10-day put/call volume ratio of 1.12, which stands higher than 79% of readings from the past year. In other words, these traders are picking up puts at a quicker-than-usual clip. 

    A short squeeze could also induce tailwinds. Short interest dropped 8.7% in the last two reporting periods, but still makes up 23.8% of the stock's available float, or over three days' worth of pent-up buying power. 

    Published on Jun 21, 2022 at 10:17 AM
    • Analyst Update
    • Buzz Stocks

    Sunrun Inc (NASDAQ:RUN) stock is the best investment for those looking to to capitalize on residential solar growth in the U.S., according to Goldman Sachs. While the brokerage firm lowered its price target on RUN to $36 from $40, it's maintaining a "buy" rating, with a long-term bullish attitude toward the sector's structural growth case. Meanwhile, the analyst downgraded the company's rival SunPower Corporation (NASDAQ:SPWR) to "sell" from "neutral," and lowered its price objective to $13, implying a 25% downside for SPWR due to speculations of softening consumer demand amid higher inflation.

    In response to the upgrade, Sunrun stock was last seen 2.8% higher to trade at $24.49. The equity is recovering from a mid-May, post-earnings dip to a roughly two-year low below the $17 area. Today's pop could help RUN overcome the 60-day moving average once again, and chip away at its 30.5% year-to-datse deficit.

    Looking at analyst sentiment coming into today, the brokerage bunch was overwhelmingly bullish on Sunrun stock. In fact, of the 11 in coverage, 10 rated it a "buy" or better, without a single "sell" on the books. Meanwhile, the 12-month consensus price target of $47.99 was a significant 96.7% premium to Friday's close.

    Regarding SunPower stock, the security was trading at $17.48 at last check, down 2.5%. Today's negative price action puts the equity back below the 20-day moving average, which it notched a close above on Friday. Ahead of today's losses, SPWR was down 14.1% in 2022.

    Analysts were already pessimistic toward SunPower stock before today's bear note. Of the 12 in coverage, just two called it a "buy" or "strong buy," compared to nine "hold" ratings and one "strong sell." SPWR's12-month consensus price target of $19.93, meanwhile, was an 11.2% premium to Friday's close. 

    Published on Jun 21, 2022 at 10:06 AM
    • Buzz Stocks
    So far, 657 calls and 516 puts have crossed the tape, which is double what's normally seen at this point. Most popular is the July 60 put, followed closely by the 72.50 call in the same monthly series. 

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