The three major U.S. equity indexes closed lower on Friday. The Dow Jones industrials ended the day down 0.9%, while S&P 500 and the Nasdaq Composite closed down around 0.7%. Ten of 11 sectors closed lower, with energy (−2.33%) and health care (−1.28%) dropping the most. Only communication services (0.02%) was able to scratch out a tiny gain.

The Federal Reserve’s Open Market Committee (FOMC) begins its two-day meeting Tuesday, culminating in an announcement of an expected interest rate increase of half a percentage point, down from the three-quarter point raises of the past several months.

The Bureau of Labor Statistics releases the consumer price index (CPI) before markets open on Tuesday. Economists expect the index to rise by 0.3% month over month in November, below the 0.4% increase posted in October. On Thursday, the Census Bureau releases November data on retail sales. The consensus estimate calls for a decline of 0.1% compared to an increase of 1.3% in October.

Weekly reports on U.S. petroleum inventories (Wednesday) and new claims for jobless benefits (Thursday) are also among the major economic announcements for the week ahead.

The three major indexes were trading higher shortly after Monday’s opening bell.

Before markets opened on Monday, Coupa Software announced quarterly results that beat expectations on both the top and bottom lines. The bigger news was the company’s announcement that it is being acquired by private equity firm Thoma Bravo for $8 billion in cash. The $81 per-share price represents a 77% premium to the stock price on November 22, the last day before media reports of the possible acquisition. Shares closed at $62.09 on Friday and traded up about 26.6% in Monday’s premarket at $78.60.

After markets close on Monday, Fluence Energy and Oracle are on deck to report quarterly results.

Here is a preview of three companies set to report results first thing Wednesday morning.

Arqit Quantum

U.K.-based Arqit Quantum Inc. (NASDAQ: ARQQ) has developed a quantum encryption technology that the company says “makes the communications links of any networked device secure against current and future forms of hacking – even an attack from a quantum computer.”
Arqit raised $400 million in a SPAC merger in August 2021 and was valued at the time at $1.4 billion. Its market value has declined by about a third since then, and the shares have dropped about 63% since the company came public. From the all-time high posted in December of last year, the share price has tumbled nearly 72%.

One of the two brokerages covering the company has a Buy rating and the other has a Hold rating. At a recent price of around $7.65 a share, the upside potential based on a median price target of $15.00 is 96%. At the high price target of $26.00, the upside potential is nearly 280%.

The analysts covering the stock expect Arqit to post revenue of $30.1 million and a loss per share of $0.06 for the 2022 fiscal year that ended in September. In May, the company reported $12.3 million in revenue for the first six months of its 2022 fiscal year. The operating loss for the period was $14.3 million compared with a prior-year loss of $5.5 million for the same period. Adjusted profit totaled $58 million, but a noncash change in the fair value of warrants totaled $72.5 million. Excluding the charge, Arqit posted $0.48 of diluted earnings per share (EPS) for the six-month period.

For the full fiscal year, the two analysts expect the company to post EPS of $0.23 on sales of $113.4 million, a jump of more than 275% in revenue. In 2024, the same analysts expect sales to rise by nearly 130% to $259.32 million with EPS of $0.81.

The stock’s 52-week trading range is $3.80 to $26.90, and Arqit does not pay a dividend. Total shareholder return for the past 12 months is negative 63.1%.

Scorpio Tankers

Scorpio Tankers Inc. (NYSE: STNG) operates a fleet of 113 refined product tankers of various capacities with an average age of 6.2 years. As has been the case with other crude and refined product tankers, Over the past year, tanker companies have all seen share price increases, but Scorpio’s 300% jump is more than double that of its nearest rival. The Monaco-based shipper will release a market update for the current (fourth) fiscal quarter Wednesday morning.

Last month, Scorpio CEO Robert Bugbee told a conference in New York:

The party hasn’t even started yet. The host may be drinking a couple of drinks but nobody has come yet. They are at the pub, waiting to go to the party later. The stress hasn’t even begun to be put on the product-tanker market.

What we are worried about and I’m sure some of the other people here are worried about is that this gets too good. This could get crazy. We cannot do the mathematics now to get required [future] demand for products to match the ships able to transport it.

Of 10 analysts that cover Scorpio stock, nine have a Buy or Strong Buy rating. The other assigned it a Hold rating. At a share price of around $52.10, the upside potential to a median price target of $64.50 is 23.8%. At the high price target of $78.00, the upside potential is 49.7%.

Revenue for the fiscal fourth quarter is forecast at $430.07 million, down 5.7% sequentially but up about 91% year over year. Analysts expect EPS of $3.88 per share, down 9.5% sequentially and up from a per-share loss of $0.79 in the year-ago quarter. For the full 2022 fiscal year ending this month, Scorpio is currently expected to report EPS of $11.12, compared to a loss of $4.17 per share in 2021, on revenue of $1.45 billion, up 170% year over year.

The stock trades at 4.7 times expected 2022 EPS, 7.1 times estimated 2023 earnings of $7.28 per share and 7.6 times estimated 2024 earnings of $6.88 per share. Scorpio’s 52-week trading range is $11.02 to $55.10. The company pays an annual dividend of $0.20 (yield of 0.77%). Total shareholder return for the past year was 287%.

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Weber

Barbecue grill maker Weber Inc. (NYSE: WEBR) held its initial public offering in August of 2021, selling about half as many shares as it had hoped at a price lower than its expected offering range. The stock currently trades down about 60% from its first day’s closing price. Monday morning, Weber accepted a buyout offer from private equity firm BDT for the 15% of the company that BDT does not already own. BDT will pay $8.05 per share in the all-cash deal, a 60% premium to Weber’s closing price on October 24, when the possible acquisition was first made public.

Only six brokerages cover the company. Four rate the stock at Hold, while the other two have a Sell rating. At a price of around $6.50 apiece, the shares traded above the median target of $4.00, largely due to the October news. The buyout offer is also well above the high target of $6.25.

Analysts expect the company to report revenue of $209.01 million and an adjusted loss per share of $0.35. For the full fiscal year ended in September, Weber is forecast to post a loss per share of $0.87, far below EPS of $0.56 in 2021, on sales of %1.63 billion, down nearly 18% year over year.

The stock’s 52-week range is $4.82 to $13.28. Weber does not pay a dividend, and total shareholder return for the past year was negative 45.3%.

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