3 Stocks To Watch Next Week: Bed Bath & Beyond, Walgreens, Constellation Brands

After equity markets saw hefty gains in 2021, investors will be starting the new year on an optimistic note. The current narrative anticipates that US growth momentum will remain strong enough to counter another hit from the fast spreading Omicron variant of the coronavirus.

Both the S&P 500 and the NASDAQ 100 surged about 27% in 2021, surpassing even the most bullish outlooks at the start of the year. The course of the market in the new year will likely depend more on solid earnings growth and a strong US economy than the future course of the COVID pandemic which is entering its third year.

Still, pressures early on in 2022 may include prospects for a quicker rollback of monetary stimulus from the Federal Reserve, accelerating inflation, worker shortages, supply disruptions, and valuations that are near five-year peaks. 

Amid this environment of general optimism for US stocks, below are three stocks we’re monitoring in the coming week as each reports their latest earnings:

1. Bed Bath And Beyond

The US home furnishings and housewares giant, Bed Bath & Beyond (NASDAQ:BBBY) reports its fiscal 2021 Q3 earnings on Thursday, Jan. 6, before the opening bell. Analysts expect the retailer to produce $0.017 a share profit on sales of $1.96 billion.

BBBY Weekly TTM

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The stock, which is heavily favored by the meme crowd, remained extremely volatile in 2021 as the army of retail investors hyped shares in chatrooms like StockTwits. BBBY finished the year at $14.58, down 80% from the peak it hit early last year.

Developments that helped boost the stock include the launch of a digital marketplace that will sell goods from third-parties, in addition to a partnership with grocery chain Kroger (NYSE:KR) which will begin offering some BBBY products starting this year. 

The continuing challenge for Bed Bath & Beyond, however, is to attract customers at a healthier pace going forward when the e-commerce onslaught is forcing many brick-and-mortar retailers out of business.

2. Walgreen Boots Alliance

Walgreens Boots Alliance (NASDAQ:WBA), the second-largest pharmacy operator in the US, will report fiscal year 2022, first quarter earnings on Thursday before the market opens as well. Analysts expect an EPS of $1.35 a share in the quarter on revenues of $32.46 billion.

WBA Weekly TTM

The Deerfield, Illinois-based company signaled during the summer that earnings growth would slow and investments would increase in the coming months as the COVID-19 related boost to sales was likely passed.

But the recent surge in infections triggered by the Omicron variant may change that outlook as US health authorities strongly recommend a third booster shot and more people flock to pharmacies to get tested.  

The company benefited from the pandemic as it administered millions of vaccines to Americans who tend to spend on other items as well when they visit the pharmacies. Walgreens shares finished the past year at $52.16, after gaining more than 30% in 2021.

3. Constellation Brands

The US-based producer of Corona beer, Constellation Brands (NYSE:STZ), will report its Q3 2022 earnings before the market opens on Thursday, Jan. 6 as well.  Analysts are projecting earnings per share of $2.21 on sales of $2.28 billion.

STZ Weekly TTM

As the Victor, New York-based wine, beer, and spirits maker succeeds in managing the difficult operating environment it encountered during the pandemic by offsetting the decline in on-premise, restaurant and bar sales with off-premise sales in its beer business, sales have been escalating. 

CEO Bill Newlands told investors in October that the momentum of the company’s core imported beer brands is helping to gain market share in the high end of the US beer market. He added: 

“The majority of our growth continues to be driven by Modelo Especial, supported by strong consumer demand for Corona Extra and Pacifico, and we expect this to continue for the foreseeable future.”

STZ shares closed on Friday, the final trading day of 2021, at $250.97, after gaining 14% last year.