October 21, 2019 BARRON’S 13
PULLING TEETH
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Canadians go to the polls to elect members to
Parliament. The Liberal Party, headed by Prime
Minister Justin Trudeau, seeks to retain the majority it won four years ago.
Monday
Monday 10/
Cadence Design Systems, Halli-
burton, TD Ameritrade Holding,
and Zions Bancorp report quarterly
results.
Tuesday 10/
Biogen, Chipotle Mexican Grill,
Hasbro, Lockheed Martin,
McDonald’s, Novartis, Procter &
Gamble, Texas Instruments,
United Parcel Service, and United
Technologies report earnings.
The National Association of Real-
tors reports existing-home sales for
September. Economists forecast a
seasonally adjusted annual rate of 5.
million, even with August’s data.
Wednesday 10/
Ameriprise Financial, Anthem,
Boeing, Caterpillar, eBay, Eli
Lilly, Ford Motor, Microsoft,
Norfolk Southern, PayPal Hold-
ings, Tesla, and Thermo Fisher
Scientific report quarterly results.
Facebook CEO Mark Zuckerberg
testifies before the House Financial
Services Committee. The hearing is
titled, “An Examination of Facebook
and Its Impact on the Financial Ser-
vices and Housing Sectors.”
Hewlett Packard webcasts its 2019
securities analyst meeting. CEO An-
tonio Neri and Chief Financial Offi-
cer Tarek Robbiati will discuss the
firm’s strategic and financial outlook.
Thursday 10/
3M, Amazon.com, American Air-
lines Group, Comcast, Danaher,
Gilead Sciences, Hershey, Intel,
Northrop Grumman, Twitter, and
Visa report earnings.
The European Central Bank an-
nounces its monetary-policy deci-
sion. The central bank is expected to
leave it key short-term interest rate
unchanged at negative 0.5%. This
will be the last interest-rate meeting
headed by ECB President Mario
Draghi. His eight-year term expires
at the end of October. He will be suc-
ceeded by Christine Lagarde, former
head of the International Monetary
Fund.
The Census Bureau releases its
Durable Goods report for September.
New orders for manufactured dura-
ble goods are expected to fall 0.5%
after a 0.2% gain in August.
IHS Markit releases its Manufac-
turing PMI for October. Consensus
estimates are for a 50.3 reading,
down from September’s 51.1.
The Census Bureau reports new-
home sales for September. Econo-
mists forecast a seasonally adjusted
annual rate of 692,000, down 3%
from August’s 713,000 figure.
Friday 10/
Anheuser-Busch InBev, Cabot Oil
& Gas, Charter Communications,
Franklin Resources, Phillips 66,
and Verizon Communications hold
conference calls to discuss quarterly
results.
Disrupters vs.
Dentists
Just last month, teeth-fixer SmileDirectClub priced
its initial public offering at $23 per share. Shares closed
the past week at $9.46, down nearly 60%. That’s not the
kind of realignment that SmileDirect had in mind when
it decided to go public.
The company was built on a disruptive brand of orth-
odontia that’s closer to shopping for sunglasses than
visiting a dentist. Customers go to a SmileDirect store or
take an at-home mold of their teeth. From there, the
company creates a plastic aligner that customers can
wear to bed. The treatment usually takes six months,
with a one-time payment of $1,900. (A 24-month pay-
ment option comes to $2,290.)
Not surprisingly, dentists and orthodontists aren’t
thrilled. The American Dental Association has asked the
Federal Trade Commission to “investigate false and mis-
leading claims” from SmileDirect, arguing that a pre-
scription should be necessary for moving teeth.
Investors are caught in the middle. SmileDirectClub
shares fell 15% this past week after the California legisla-
ture passed a bill requiring an orthodontics provider to
review recent patient X-rays. In a statement following the
bill’s passage, SmileDirect said, “Simply put, this bill rep-
resents the dental lobby’s thinly veiled attempt to protect
traditional dentistry at the expense of Californians.”
SmileDirect will probably have more to say when the
company reports earnings next month. For now, Wall
Street isn’t worried about the fight with dentists. All
seven analysts tracked by Bloomberg rate SmileDirect
stock at Buy or its equivalent.—Evie Liu
AGrowingBite
SmileDirectClubgrewsales190%
last year, but rival Align Technology
maintains a significant lead.
But Not Much to Smile About
SmileDirectClub stock has slumped
since its IPO in September.
Sept. 16
2017 2018
Sept. 30 Oct. 14
$20.
1,
1,
$2,000 million
500
0
Source: Company filings
Source: FactSet
SmileDirectClub Align Technology
Illustration by Elias SteinPREVIEW
Coming Earnings
Day Consensus Estimate Year AgoMHalliburton (3Q) $.34.TProcter & Gamble (1Q) 1.24 1.McDonald’s (3Q) 2.21 2.Texas Instruments (3Q) 1.42 1.Nextera Energy (3Q) 2.28 2.Biogen (3Q) 8.27 7.More Earnings on Page MConsensus Estimate
Day Consensus Est Last PeriodTh Sept. Durable Goods Orders -0.3% 0.2%Sept. New Home Sales 699,000 713,F Oct. Consumer Sentiment - f 96.0 96.Unless otherwise indicated, a-Advanced; f-Final; p-Preliminary;
r-RevisedSource: FactSetFor more information about coming economic reports - and what
they mean - go to Barron's free Economic Calendar at
http://www.Barrons.com