WEBVTT - Week Ahead: Carnival, FedEx & Darden Restaurants 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 1>Let's take a look now, add some stocks making news

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<v Speaker 1>in the week ahead. I'm Nathan Hager here with Bloomberg

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<v Speaker 1>Equities reporter Avalon Parnell, head of a few pretty interesting

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<v Speaker 1>earning stories in the coming week. We're going to hear

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<v Speaker 1>from Carnival Cruise Lines on Tuesday. It's going to be

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<v Speaker 1>really interesting to hear from them, especially with so many

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<v Speaker 1>of the headlines around the Middle East driving cruise stocks

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<v Speaker 1>over the last several months.

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<v Speaker 3>Avalon absolutely, I mean, the potential end of the Iran

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<v Speaker 3>war and fuel costs will definitely be top of mind

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<v Speaker 3>for investors as Carnival heads into its second quarter earnings

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<v Speaker 3>on Tuesday. Carnival shares have been on a roller coaster

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<v Speaker 3>ride alongside other travel and cruise names, to say the least,

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<v Speaker 3>since the war started in February. But now with the

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<v Speaker 3>US and Iran saying that they've reached an interim agreement

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<v Speaker 3>to reopen the street up for moves, sentiment is again

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<v Speaker 3>rising in this hard hit sector. Worth mentioning that Wall

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<v Speaker 3>Street still remains cautiously optimistic about the stock. Schiefel may

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<v Speaker 3>have put it best at analysts, saying that trading cruise

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<v Speaker 3>stocks is beyond difficult because you're trading your view of

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<v Speaker 3>whether the Middle East war will end or not. But

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<v Speaker 3>they remain buyers of Carnival into their earnings because they

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<v Speaker 3>believe the company hasn't witnessed any deterioration in customer spending.

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<v Speaker 3>Bloomberg Intelligence highlighting that investors will look for insight on

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<v Speaker 3>booking since March, when Carnival reported that eighty five percent

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<v Speaker 3>of capacity had been sold.

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<v Speaker 1>Well, like you said, the stock has kind of been

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<v Speaker 1>all over the map since the start of the year.

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<v Speaker 1>What are we expecting from the options market when it

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<v Speaker 1>comes to how the stock could trade off the back

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<v Speaker 1>of earnings.

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<v Speaker 3>Yes, option data that we are seeing at the moment

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<v Speaker 3>is currently implying about a six percent move after those results.

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<v Speaker 1>Okay, so we'll be keeping an eye on Carnival Cruise

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<v Speaker 1>line on Tuesday along with FedEx. Obviously a pretty strong

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<v Speaker 1>bell weather for the economy as a whole. But I mean,

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<v Speaker 1>this stock has been through quite a few changes lately.

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<v Speaker 1>So how's that affecting investor sentiment.

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<v Speaker 3>Yes, I mean FedEx, to say the least, we'll be

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<v Speaker 3>entering a new era when it reports fourth quarter earnings

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<v Speaker 3>on Tuesday, Justice month, FedEx completed the spin off of

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<v Speaker 3>its freight division, and it will also be the first

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<v Speaker 3>earnings call for Claude Russ, who became interim CFO after

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<v Speaker 3>John Dietrich surprise investors by announcing that he was stepping

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<v Speaker 3>down at the start of this month. Investors expect FedEx

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<v Speaker 3>to continue executing despite inflationary pressures and rising fuel costs

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<v Speaker 3>tied to that war in Iran. Barclay's analysts are expecting

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<v Speaker 3>solid retail performance and also industrial expansion this quarter given

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<v Speaker 3>strong macro transportation indicators, though it is worth noting that

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<v Speaker 3>Bloomberg Intelligence highlighting with the spinoff in the rear view mirror,

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<v Speaker 3>FedEx can potentially begin to focus on its longer term

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<v Speaker 3>financial targets, like pushing its higher margin businesses and also

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<v Speaker 3>improving European results to lift earnings above its twenty twenty

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<v Speaker 3>nine target.

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<v Speaker 1>And yeah, so it'll be interesting to see how that goes.

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<v Speaker 1>But I mean, this stock in particular has been on

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<v Speaker 1>a pretty solid run since even before the start of

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<v Speaker 1>the year. When you have the FedEx Freight business in

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<v Speaker 1>the rear view, how is that expected to affect the

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<v Speaker 1>performance going forward?

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<v Speaker 3>Well, going forward, they're hoping that this will allow FedEx

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<v Speaker 3>to hone in on the really quality areas of its

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<v Speaker 3>business and help to expand margin. And also worth noting

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<v Speaker 3>that options data at the moment is currently implying a

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<v Speaker 3>nearly seven percent move after those results, although we will

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<v Speaker 3>also hear from that spinoff later that week as well,

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<v Speaker 3>so we'll see how the two go head to head.

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<v Speaker 1>Oh wow, So even more reason to keep an eye

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<v Speaker 1>on FedEx and FedEx Freight. Not only that, on Thursday,

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<v Speaker 1>we're going to hear from Darden Restaurants. I mean, every

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<v Speaker 1>time I think about Darden, I think about all of Garden,

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<v Speaker 1>but I mean I'm always surprised by how many restaurants

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<v Speaker 1>are under the Darden umbrella, not just for casual dining,

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<v Speaker 1>but fine dining as well.

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<v Speaker 3>Yeah, you're absolutely right. Darden is the parent company behind

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<v Speaker 3>popular chains like Rufe, Chris Longhorn Steakhouse, and my dad's

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<v Speaker 3>personal favorite Cheddar Scratch Kitchen. But nice, we will be

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<v Speaker 3>gaining some more visibility on the American consumer Thursday, when

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<v Speaker 3>Darden reports for quarter earnings, Worth noting that they do

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<v Speaker 3>continue to outperform the S and P five hundred consumer

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<v Speaker 3>discretionary sector and investors are expecting the print to keep

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<v Speaker 3>that trend going. City Analysts writing that they expect another

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<v Speaker 3>solid quarter marked by comparative growth continuing to outpaced industry.

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<v Speaker 3>Raymond Jane's expecting a strong fourth quarter, noting that solid

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<v Speaker 3>casual dining segment trends in recent months, and also worth

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<v Speaker 3>noting that options data at the moment is currently implying

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<v Speaker 3>about a four percent move after those results.

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<v Speaker 1>Okay, so maybe a little bit of a pop there,

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<v Speaker 1>But you have to wonder, when you know, there's so

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<v Speaker 1>much talk about a K shaped economy, whether consumers are

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<v Speaker 1>thinking about pulling back some on some of the more

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<v Speaker 1>discretionary sides of the economy, whether a company like Darden

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<v Speaker 1>could see a hit from something like that if people

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<v Speaker 1>are thinking, well, you know, maybe I would rather stay

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<v Speaker 1>at home and cook for myself rather than go out

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<v Speaker 1>for a nice meal for a change.

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<v Speaker 3>Absolutely, and I mean it's also not just that we're

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<v Speaker 3>also thinking about the impact of GLP ones on various restaurants,

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<v Speaker 3>obviously fast dining fast food is going to be very

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<v Speaker 3>impacted by GLP ones, especially as they continue to grow

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<v Speaker 3>in popularity in the US. But for companies like a

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<v Speaker 3>Darden restaurants, analysts have said they're really looking for some

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<v Speaker 3>of these chains to launch more smaller plates, more chicken

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<v Speaker 3>options for customers who are looking for a healthier option

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<v Speaker 3>on the menu and are really conscious about protein, and

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<v Speaker 3>so that will also be something to be interesting to

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<v Speaker 3>keep an eye on.

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<v Speaker 2>The Stock Movers report from Bloomberg Radio. Check back with

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