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Let's take a look now at some stocks making news in the week ahead. I'm Nathan Hager, joined by Bloomberg Markets Live strategists Tatiana Daria. I guess we could say this is the unofficial start of earning season, before the banks get things going right. We've got a few companies opening things up, including Constellation Brands on Wednesday. It's been a tough go for the booze business, hasn't it.
Yes, exactly. Expectations aren't very high here for the company, but some analysts on Wall Street are starting to warm up to the stock on valuation concerns, saying that a lot of the bad news is already in the stock so Bloomberg Intelligence forecast dot Net revenue will fall about fifteen percent do mainly to their wine in spirits portfolio devestments, but they're also anticipating some sluggishness in the beer segment, which is obviously their main driver or crown a jewel
there and especially among Hispanic consumers. BI notes, but some analysts are saying that most of that is already in the price. Perhaps, you know, the beer segment has room to surprise to the upside. We've seen JP Morgan lifting their price target, We've seen Evercore adding the stock to the tactical outperform list, and it also got an upgrade from City earlier this month, citing a valuation that's below historical levels. And if you look at the forward price
to earnings ratio, it has indeed fallen drastically. It's hovering around the lowest since twenty twelve now as shares have come down sharply over the past year.
Yeah, valuation concern certainly speaks to that. There Before we hear from Constellation, and we're going to get results as well from Levi Strauss on Tuesday. Of course, we got that big disappointment from Nike this past week. Do you put Levi in the same category as Nike in terms of what to expect there?
I think one has to, right because they both speak to the consumer. They're both sort of discretionary brands that you turn to for sort of luxury and comfort, not necessarily because you really need to, And expectations are pretty I would say modestly positive. UBS, for example, expects a fourth quarter sales and EPs beat, though they say the company may remain cautious on a full year outlook amid
the macro as. Certainly, just like we've seen with Nike, they know that the US direct to consumer sales likely rose about two percent year over year, and that web traffic likely increased even more in the US according to their industry data that they track. Nonetheless, the company may choose to just be cautious and conservative and not raise
their guidance despite the likely beat. And that's because of the reasons that we have seen with the Nike report, with potential fresh setbacks in Europe and the Middle East, regions that are obviously heavily exposed to the energy costs and just the disruptions coming from the year round war.
Now, were you expecting any further commentary from Levi around how they're dealing with trade uncertainty as well after that Supreme Court tariff decision and some of the uncertainty around how the President might try to rebuild that terrafall and how that could affect its business.
Yes, certainly, you know, tariffs is sort of fallen off the radar, but when you look at company earnings, especially in the consumer space, it is still a big focus. So it will be really interesting to see what the company has to say on that matter.
Yeah, and of course earnings take off with Delta Airlines on Wednesday. What kind of a stock move could we see following those results? Ta Tiana.
Well, it's interesting with Delta air is that they kind of have been the exception among the airlines. It is the only airline stock bucking the weakness among major peers since the war started. If you look at an index of an industry index, that index has fallen into a bear market recently, but Delta shares have actually gained three
percent since the war started. And maybe because the company has already set a positive tone for its earnings report after issuing a more optimistic sales target at a recent conference, saying that bookings for leisure and corporate customers accelerated into March. Actually, and they say they are very well positioned to navigate the current environment at the time when elevated fuel prices
are roiling the industry. And it looks like are giving Delta the benefit of the doubt here, But obviously things change very fast these days, so it will be interesting to see how their views have changed since they issued that update about two weeks for two weeks.
Ago from now, yeah, absolutely, while we wait for updates around the war and how that could develop as well. I mean, what kind of changes could we see? What are you listening for, particularly from the call from Delta later on.
I'll be listening on clues about the consumer right because
obviously travel is a discretionary category. Most of us do it for fun, for vacations, so I'll be interested to see if they have seen a pullback from consumers specifically, because if you look at alternative data on the Bloomberg as it relates to that, yes, it showed that airline spending is hanging in there, but hotel spending has sort of fallen off here in recent weeks, So I'd be sort of curious to see how much is that impacting airlines already.
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