Executive Summary

  • Earnings season continues with big names reporting from important global sectors.
  • As the Olympics gets under way in Tokyo, we analyze a company that provides fitness equipment to the athletes that also features an important reporting date revision.
  • Record-setting heat around the world may be driving the share price of one climate-centered stock higher—this Industrial company had a change in leadership resulting in a later than expected earnings date.

Earnings Revisions

We feature two companies with earnings revisions this week. Wall Street Horizon tracks firms from around the world that publicly declare an earnings date, but then publicly change it. By moving a reporting date, a firm indicates there may be unusual news in the offing.

BP (NYSE:) is the eighth biggest company on the United Kingdom’s with a market cap greater than £55 billion. It’s among the largest energy stocks in the world. BP is also a darling for dividend-focused investors as the stock yields more than 5%. It’s a large position for many global portfolio managers, so the upcoming earnings report is certainly one to watch closely.

Energy Sector Sours

Shares of the oil and gas giant have come under pressure lately as the economic recovery has been called into question due to rising COVID cases from the Delta variant. Europe is among the hardest-hit regions. BP’s stock price fell about 20% peak to trough from June to July. Still, remain elevated versus earlier this year, while and power prices in Europe have skyrocketed.

Figure 1: BP Stock Price History (1-Year)

BP Amoco Daily Chart.

ESG Flows Surge in 2021

Also in focus for firms like BP is ESG. As an integrated oil and gas company with upstream, midstream, and downstream segments, the London-based firm must keep a keen eye on its environmental impact. BP is still making payments for the infamous 2010 oil spill. European investors may be wary of putting money to work in BP due to its environmental risk—Europe ESG equity funds recorded $10 billion from January through May (+83% y/y), according to BofA Global Research. Needless to say, headwinds are plentiful.

Revision Analysis

BP has a history of reporting Q2 results on July 28. On April 28, we updated its Q2 2021 earnings date to July 27 per the company’s website calendar (no disclaimer was listed). We only had a confirmed earnings date change from BP once over the past five years before a calendar change. On May 28, BP changed its calendar date from July 27 to Aug. 3, and we then reconfirmed. Traders should watch the stock for potentially unusual news to be reported in the earnings release.

Technogym
(MI:) is an Italian consumer goods company, comparable to a consumer discretionary firm in the U.S. With a market cap of just above £2 billion and annual revenue of £500 million, this is a small cap player in the fitness and sporting goods space. It also provides services to various institutions such as medical centers and hotels. Think of it as the Italian Peloton. Technogym has been in the news lately as it is the official supplier of athletic training equipment for the Olympic Games in Tokyo.

Stock Steadies After A Gold Medal Run

TGYM’s stock price has held firm over the last several months as global equity markets have wavered. Technogym was a big winner during the November through early May bull market among value stocks and small caps—the share price doubled in Euro-terms. Its P/E ratio is elevated near 60x and the stock yield’s 2.1%. What’s the next catalyst? An upcoming earnings date is certainly something to watch.

Figure 2: TGYM Stock Price History (1-Year)

Revision Analysis

TGYM has a history of reporting H1 results in September. On March 25, Wall Street Horizon confirmed Sept. 8 as the earnings date per the company’s financial calendar. On July 16, Technogym issued a press release stating a revision to what was previously announced. Technogym said that the board of directors approved H1 2021 financial statements, and would meet on Aug. 2 instead of Sept. 8. This massive shift forward is worth noting.

Earnings Outlier

We wrap up this week’s Event Data Outlook with an Earnings Outlier from Trane Technologies (NYSE:). This is the most important time of year for Trane, an air conditioning vendor.

The $47-billion market cap firm is based in Ireland and operates within the building materials/products sector. TT operates globally within its Americas, EMEA, and Asia Pacific segments. It was founded in 1871 and has become a climate-focused company with partnerships in the renewables industry. For portfolio managers, the stock remains a popular thematic investing play on climate change.

Weather Events Boost TT’s Share Price

TT’s stock price has been explosive since the low in early 2020—rallying from $70 to nearly $200 recently. It’s also among the top-performers in its industry over the three and five-year periods. Intuitively, intense weather events recently have likely boosted sales for Trane. From heat events in California last August to record-warmth in the US Pacific Northwest as well as in Europe this summer should be tailwinds for TT, but there has been a shake-up in management.

Figure 3: TT Stock Price History (1-Year)

TT Stock Price History.

Outlier Analysis

Trane has a history of reporting Q2 results during the July 27-29 window with a strong Wednesday trend. On May 6, WSH set a date of July 28 per that trend. On July 13, however, TT announced it would report on Aug. 4 After Market, a week later than expected.

The driver of that unusual date was the June 4 news that President and COO Dave Regnery would be promoted to CEO and would join the board of directors. He succeeds Mike Lamach, who is retiring from the CEO position. This corporate governance structure change likely affected the later than usual reporting date change. Under Lamach’s leadership, Trane appears to have successfully pivoted its operations to support a global and climate-centered brand.

Conclusion

Analysts continue to underestimate the strength in the earnings recovery. Q2’s EPS beat rate is tracking above 80% after the financials sector provided an early-season boost. The onus is now on other sectors to keep the pace. Traders will want to pay close attention to unusual news during earnings calls to manage risk in the week ahead.





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