3 Stocks To Watch This Week: GameStop, Kroger, CVS Health
Haris Anwar | Sep 04, 2022 22:53
- Ryan Cohen is trying to revive growth at GameStop, which has seen sales slowed as gamers have shifted to digital downloads
- Kroger is experiencing shoppers “aggressively” turning to cheaper store brands as they cope with the highest inflation in four decades
- Media reports say CVS is ahead of other potential bidders to buy Signify Health
- Inflation
- Geopolitical turmoil
- Disruptive technologies
- Interest rate hikes
Investors will likely see another volatile week in equities when they return from the long Labor Day weekend, as hopes of a policy pivot from the Federal Reserve faded after another strong jobs report on Friday.
The recent labor-market data added to the evidence that the economy is robust enough to withstand more tightening, causing equities to come under fresh selling pressure after the strong summer rally.
Fed chairman Jerome Powell warned in a recent speech that people should expect some economic pain as it tries to bring inflation down toward its 2% target, which remains the central bank’s “overarching focus right now.”
Stocks were lower in the past week with the S&P 500 suffering its longest weekly losing streak since mid-June.
With these macroeconomic pressures, here are three stocks on our radar during the holiday-shortened trading week:
1. GameStop
GameStop (NYSE:GME), the video game retailer stock favored by retail investors active on social media channels, will report its second-quarter earnings after the market close on Wednesday, Sept. 7. Analysts, on average, are expecting a loss of $0.41 a share on sales of $1.27 billion.
Ryan Cohen, who joined the GME board and became chairman last year, has been trying to revive growth, which has slowed as gamers have shifted from buying game discs to digital downloads.
Source:Investing.com
Last year, GameStop was at the center of a months-long, social-media-fueled trading frenzy. The company revamped its leadership to help it diversify its business and return to profitability, but the results so far haven’t been as dramatic as last year's rally had been.
GME stock, which closed on Friday at $27.36, is down about 26% this year in a highly volatile trading pattern.
2. Kroger
Supermarket behemoth Kroger (NYSE:KR) is scheduled to report its Q2 2022 earnings on Friday, Sept. 9 before the market opens. Analysts are expecting a $0.7954-per-share profit on sales of $34.23 billion.
Get The App
In June, Kroger said grocery shoppers are “aggressively” turning to cheaper store brands as they cope with the highest inflation in four decades. Same-store sales for Kroger-branded products, however, rose 6.3% in the first quarter, faster than the overall sales growth. At that time, Kroger also raised its full-year guidance, saying it now expects identical sales to grow by 2.5% to 3.5%.
Source: Investing.com
Kroger's earnings report is set to come after other retailers' warnings that they’re still struggling to get rid of the higher inventories they have accumulated this year as consumers have shifted their spending patterns following the pandemic-triggered buying spree.
Kroger stock, which closed on Friday at $48.43, has lost about 23% from its April highs.
3. CVS Health
Shares of pharmacy giant CVS Health (NYSE:CVS) may see some action this week on reports that the chain is in advanced talks to acquire the home-healthcare company Signify Health (NYSE:SGFY) for around $8 billion.
The Wall Street Journal reported on Friday that CVS is ahead of other potential bidders, including Amazon.com (NASDAQ:AMZN) and UnitedHealth (NYSE:UNH), which had been circling Signify for a deal that could be announced soon.
Source: InvestingPro+
Signify works with a large group of doctors to facilitate house calls, using analytics and technology to help physician groups, health plans, employers, and health systems with in-home care. It also offers health evaluations for Medicare Advantage and other plans, according to WSJ.
CVS shares, which closed on Friday at $99.44, have held up well in the current market downturn, falling over 3% this year.
Disclosure: The writer doesn’t own shares of the companies mentioned in this report.
***
The current market makes it harder than ever to make the right decisions. Think about the challenges:
To handle them, you need good data, effective tools to sort through the data, and insights into what it all means. You need to take emotion out of investing and focus on the fundamentals.
For that, there’s InvestingPro+, with all the professional data and tools you need to make better investing decisions. Learn More »
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.