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5 stocks to watch on Wednesday: COP/MRO deal, CRM and more
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U.S. stock index futures on Wednesday pointed to a lower open, with the Nasdaq Composite (COMP:IND) on track to halt a two-day advance. The tech-heavy index breached the 17,000 points mark for the first time ever in the previous session. Here are some stocks to watch on Wednesday:
- The U.S. energy sector received another major wave of consolidation on Wednesday, after oil and gas producer ConocoPhillips (COP) agreed to buy rival Marathon Oil (MRO) in an all-stock transaction with an enterprise value of $22.5B, including $5.4B of net debt. Marathon Oil (MRO) stock surged more than 11% in pre-market trading, while ConocoPhillips (COP) slipped nearly 1%. The deal will be immediately accretive to ConocoPhillips (COP), and will expand its U.S. onshore portfolio by adding over 2B barrels of resources. Independent of the deal, ConocoPhillips (COP) also said it expects to hike its dividend by 34% to 78 cents per share starting Q4 2024.
- Class A shares of Chewy (CHWY) jumped more than 14% ahead of the opening bell. The Plantation, Fla.-based online retailer of pet food, products and supplies delivered a Q1 top- and bottom-line beat and unveiled a stock buyback plan. The company’s quarterly net sales rose 3.1% Y/Y to $2.88B, and top boss Sumit Singh noted that “Chewy’s (CHWY) value proposition” was continuing “to resonate” with customers. The company’s board also authorized a share repurchase program of up to $500M of class A and/or class B stock.
- Salesforce (CRM) stock will be in focus, with the cloud-based software firm scheduled to announce FQ1 2025 results after the closing bell. Wall Street expects the Dow 30 component to earn $2.37 per share on revenue of $9.15B. Investors will be closely watching the company’s performance in its core customer relationship management business to gauge the demand situation for enterprise software. Focus will also be on any commentary around Salesforce’s (CRM) data segment and generative artificial intelligence (AI) tool, Einstein Copilot, which has shown “positive demand signals” according to Citi earlier this month.
- Shares of HP (HPQ) will also grab some attention, with the PC and printer maker on tap to report FQ2 2024 earnings after hours. Wall Street expects HP (HPQ) to earn 81 cents per share on revenue of $12.61B. Its PC sales and commentary around demand will be closely watched as usual, amid a continued recovery this year in the global PC market from an inventory correction cycle. Investors will also be focusing on any remarks around AI-capable PCs. Back in March, research firm Canalys estimated that in 2024, about 18% of total PC shipments globally will be AI-capable.
