May 16-20 | Energy & Tech: Which Stocks to Watch This Week?

Corporate earnings season is coming to a close. However, the overall earnings were not enough to calm the markets, and stocks sank to their lowest point of the year last week. It’s important to remember that declines are part of the investing journey and downturns can offer new opportunities for your portfolio. With that in mind, let’s take a look at a few important events coming up this week.

Can Engie’s stock recover?

All eyes are on the energy companies since energy prices have exploded all over the world. This week, French company Engie will report its earnings for the first quarter of 2022. The stock dropped in early March when the war in Ukraine first broke out, falling from €13.50 to €10. However, with the rise in energy prices, the company could see its revenue increase dramatically. In 2021, profits were already up 40% compared to 2020. And the company is forecasting €3.3 billion euros in profits for 2022 compared to €1.5 billion in 2020. 

Interestingly, Engie said last week that it could continue without Russian gas for the foreseeable future, but energy prices would remain high for the next 3 or 4 years to finance the transition to clean energy. Tune in on Tuesday, May 17th for the full quarterly figures.

One more thing. Engie is one of the few companies in the French CAC 40 managed by a woman: Catherine MacGregor! Check out this article to find more female-led companies you can invest in with BUX Zero.

Will Cisco beat profit expectations?

The American tech giant Cisco has a history of beating expectations for its quarterly earnings reports. Can they do the same again on Wednesday, May 18th? Let’s quickly explain what to look out for:

  • Cisco is very involved in cybersecurity. This is an ultra-growth sector so keep your eye on the numbers from this department.
  • The company’s earnings per share should be around $0.85, representing growth of 3.6%.
  • The earnings growth rate could climb 7.1% for the first half of 2022.

Keep in mind that Cisco just released a new product, Predictive Networks, which is designed to “fix problems before they happen.” This innovation could trigger even more growth in the coming months.

How high will inflation go?

This week will bring us crucial inflation numbers from the eurozone. Inflation is on everyone’s lips right now and it’s having a considerable effect on people’s purchasing power. 

Inflation in April is estimated at 7.5%, which is slightly higher than March’s 7.4%. The most affected countries are Estonia (19%), Lithuania (16.6%) and the Netherlands (11.2%). The two least affected countries in the area are France (5.4%) and Malta (4.90%).

You can help protect your portfolio against the harmful effects of inflation by diversifying it with different asset classes, in different sectors and geographical areas. Because inflation does not affect all stock market players in the same way: some companies can see their profits increase, while others might struggle. You can, for example, look at ETFs which allow you to invest in hundreds or even thousands of diverse companies through one product.

Economic and earnings calendar

Monday – Trade balance in Belgium and the euro zone (March). Quarterly results for Take-Two Interactive.

Tuesday – GDP figure in the Netherlands (Q1). Trade balance in Spain, Italy and the Netherlands (March). Unemployment rate in the euro zone and in France (Q1). Inflation in Italy (April). Quarterly results of Walmart, Home Depot, Engie.

Wednesday – New vehicle registrations and eurozone inflation rate (April). Non-monetary meeting of the European Central Bank. Quarterly results of Cisco, Target, Elior.

Thursday – Unemployment rate in the Netherlands (April). Trade balance in Ireland (March). US weekly unemployment figures.

Friday – Consumer confidence in the eurozone, Belgium and the Netherlands (May). Foot Locker quarterly results.

We’ll be back next week for another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

This BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.