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Three things to watch in the stock market this week



Last week, the stock market rose in a shortened trading week.These two Dow Jones Industrial Average (DJINDICES: ^ DJI) with S&P 500 (SNPINDEX: ^GSPC) At the beginning of the second quarter of 2021, the stock price has risen by more than 1% and is at a historical high.

Several popular companies will announce earnings results in the next few days.The list includes Constellation brand (New York Stock Exchange: STZ), Levi Strauss (New York Stock Exchange: LEVI), with Simple good food (NASDAQ Stock Code: SMPL), We will preview its report.

A man buys beer at the grocery store.

Image source: Getty Images.

1. Prospects of Constellation Brands

Constellation Brands will release its fourth-quarter earnings report on Thursday to end its fiscal year. Investors want to hear good news from the alcoholic beverage giant. Its latest quarterly update showed surprisingly strong sales growth, as strong household beer consumption offset the decline in demand from bars and restaurants.along with Boston Beer, Constellation brand accounted for most of the growth of the entire industry in 2020.

This week’s report should contain more evidence of the strong growth of imported beer brands Modelo and Pacifico, as well as the success of Corona’s hard sales, which directly competes with Boston Beer’s Truly series. Due to changes in transportation and inventory, sales growth will slow down compared with the previous quarter, but the consumption indicators of the Constellation brand should remain stable.

However, the trend of the stock may depend on the outlook for the 2022 fiscal year released by CEO Bill Newlands and his team on Thursday. The forecast may include optimism about the beer sector and the newly transformed wine and spirits market, as well as some potential big opportunities in the recreational cannabis sector.

2. Organic sales of Simply Good Foods

Since the COVID-19 low, Simply Good Foods stock has outperformed the broader market, setting a high point for Wednesday’s second-quarter earnings report. Before the announcement, most investors expected this health-focused food and snack expert to achieve strong growth, with sales expected to reach approximately $230 million.

Management’s recent acquisition of the Quest Nutrition line of products may increase this number, but CEO Joseph Scalzo and his team should also elaborate on their natural sales estimates this week. The company said in early January that the growth rate calculated by this indicator was the median.

In order for the stock to continue to rise through 2021, Simply Good Foods will need to show steady demand in its Atkins and Quest brands, and this demand will continue even if the pandemic threat diminishes. Investors hope that profitability will increase due to the improved sales base. It is hoped that management will issue more detailed guidance on these two figures in the earnings report on Wednesday.

3. Levi Strauss’ 2021 forecast

Denim expert Levi Strauss will announce its first quarter financial results on Thursday afternoon. The stock has risen in the past year, but many investors see opportunities for greater returns in the future.

This bullish view depends on the company further distinguishing its small but fast-growing e-commerce platform. Levi Strauss also aims to expand its business into complementary categories beyond its core denim business. Progress in these two areas may have eliminated some of the effects of weak sales, which are expected to fall by 17% this quarter and 12% in the previous quarter.

The stock’s price increase in recent months means that investors will seek management to announce a positive outlook for 2021 after sales fell by 23% last year. Watch executive inventory updates to get clues about where demand and price trends are going after a difficult holiday.

This article represents the opinion of the author, and he may disagree with the “official” recommended position of the Motley Fool Advanced Consulting Services. We are variegated! Questioning investment arguments (and even our own arguments) can help all of us think critically about investment and make decisions that will help us become smarter, happier, and wealthier.




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