Money & Markets Week Ahead for the week of July 28, 2021: The earnings season is back in full swing. I’m breaking down the expectations of the tech giant Apple Inc. (Nasdaq: AAPL). I’ll also provide some insight into Robinhood’s highly anticipated IPO this week.
We will also see how consumer confidence moved in July.
Here’s more of what to see on Wall Street in the coming week:
Big market debut: Robinhood IPO
There are several IPOs on the calendar this week.
Robinhood Markets plans to price the IPO on Thursday. It is listed on the Nasdaq under the ticker symbol HOOD.
What is it: Robinhood was founded and based in Menlo Park, California.
The company operates an online stock trading app and describes its mission as “Democratizing Finance For All”.
Robinhood has 18 million funded trading accounts and 17.7 million monthly active users of its app, according to its S-1 / A filing with the Securities and Exchange Commission.
In 2020, Ryan Specialty had total sales of $ 958.8 million – up from $ 277.5 million the company reported in 2019.
For the three months ended March 31, 2021, the company had total revenue of $ 522.2 million compared to $ 127.6 million for the same three months of 2020 – a 309.2% increase in revenue .
The company increased its net income from minus $ 106.5 million in 2019 to $ 7.4 million in 2020.
The offer: The company plans to sell 55 million shares at a price range of $ 38 to $ 42 per share.
The offer is expected to raise around 2.2 billion US dollars.
According to Renaissance Capital, Robinhood would have a market cap of $ 33.4 billion at a median of $ 40 per share.
Goldman Sachs, JPMorgan, Barclays, Citi and Wells Fargo Securities are all bookrunners on the transaction.
The thin one: For my take on Robinhood’s IPO, check out this episode of The Bull & The Bear podcast.
Deeper Dive: Apple Inc. Income
The winning season is back in full swing and most FAANG names will be releasing quarterly figures this week.
Apple Inc. (Nasdaq: AAPL) will try to keep its winning streak alive when it reports on Tuesday. The iPhone maker has been busy on many fronts so we’ll see how that reflects in the numbers.
Apple earnings have rebounded since Q2 2020
Apple exceeded expectations for earnings per share for the last four quarters following the 2020 COVID-19 crash. That’s a great sign considering it previously had a series of nine profit losses in a row that stretch back as far as the second quarter of 2018.
The tech giant blew analysts last quarter, forecasting earnings per share of $ 1.40, up from expectations of just $ 0.98.
The trend shows that Apple’s fourth quarter earnings per share are significantly higher due to strong Christmas sales.
The expectations for the second quarter of 2021 are pretty much in line with the previous quarter with an EPS of $ 1, so we’ll see if AAPL can repeat itself.
Sales is a different story.
Apple doesn’t like to disappoint in this regard and has only missed sales expectations once in the past four years.
AAPL does not miss any revenue
The tech giant reported sales of $ 89.5 billion at the end of April. That was $ 12 billion more than analysts predicted.
The quarterly sales trend is similar to its EPS … higher in the fourth quarter of each year due to the Christmas retail season.
The big names on Wall Street lowered expectations for Tuesday’s report to $ 73 billion, so we’ll see if Apple can blow them away again.
What to Expect: Apple faces a number of issues in the second half of 2021.
The tech company is still grappling with delivery bottlenecks after the peak of the COVID-19 pandemic. Floods in China can also affect production as many of its factories are located there.
Apple’s iPhone is its money maker. Demand for its 5G-enabled iPhone 12 should account for a good chunk of its sales. But the competition in the 5G space is high.
Money and Market Economy Week: Garbage data
The Conference Board will announce the July reading of its monthly consumer confidence survey on Tuesday.
The survey measures consumer attitudes, purchase intentions, vacation plans, and consumer expectations for inflation, stock prices, and interest rates.
Consumer confidence hits 12-month high in June
Consumer confidence hit a 12-month high of 127.3 in June.
That is a level of trust not seen before the COVID-19 pandemic. It is an indication that consumers are more optimistic about the country’s economic future.
Consumer confidence is expected to decline slightly to 125.8 in July.
To wrap up Money & Markets Week Ahead, here’s a look at some of the key earnings reports out this week:
Tesla Inc. (Nasdaq: TSLA)
Lockheed Martin Corp. (NYSE: LMT)
Apple Inc. (Nasdaq: AAPL)
Microsoft Corp. (Nasdaq: MSFT)
Alphabet Inc. (Nasdaq: GoogL)
Visa Inc. (NYSE: V.)
Facebook Inc. (Nasdaq: FB)
PayPal Holdings Inc. (Nasdaq: PYPL)
Pfizer Inc. (NYSE: PFE)
McDonald’s Corp. (NYSE: MCD)
Amazon.com Inc. (Nasdaq: AMZN)
Comcast Corp. (Nasdaq: CMCSA)
T-Mobile US Inc. (Nasdaq: TMUS)
Yum! Trademarks Inc. (NYSE: YUM)
Berkshire Hathaway Inc. (NYSE: BRKa)
Exxon Mobil Corp. (NYSE: XOM)
AbbVie Inc. (NYSE: ABBV)
Caterpillar Inc. (NYSE: CAT)
That’s all for this week.
Until next time…
Matt Clark, CMSA®
Research Analyst, Money & Markets
Matt Clark is a research analyst for Money & Markets. He is a certified Capital Markets & Securities Analyst at the Corporate Finance Institute and an employee of Seeking Alpha. Before joining Money & Markets, he was a journalist and editor for university sports, business and politics for 25 years.