3 Things to Watch in the Stock Market This Week

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Stocks rose during a shortened trading week last week as the S&P 500 (SNPINDEX: ^GSPC) and the Dow Jones Industrial Average (DJINDICES: ^DJI) each set new highs for 2019 and inched closer to the all-time records set in September of last year.

Hundreds of companies will post first-quarter earnings reports over the next few days that might bolster or reverse that rally. Below, we'll preview a few of the most highly anticipated announcements from eBay (NASDAQ: EBAY), Procter & Gamble (NYSE: PG) and iRobot (NASDAQ: IRBT).

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eBay's strategy shift

eBay announces its results on Tuesday in a report that's likely to grab Wall Street's attention. The online-marketplace giant is coming off a disappointing fiscal 2018 that saw sales growth slow rather than accelerate as executives had hoped. That market-share stumble has added pressure on CEO Devin Wang and his team to show progress at stabilizing revenue and returning to a faster expansion pace.

Expectations are low for the business right now, given that Wang and his team are predicting just a 1% sales uptick this quarter and just 2% growth for the full year. But investors will be at least as concerned with eBay's shifting big-picture strategies.

The company initiated its first-ever regular dividend last quarter, but even larger changes could be announced this week, thanks to pressure from a team of activist investors. Specifically, eBay might announce concrete plans to sell or spin off StubHub or its classifieds section while directing the cash it raises toward the marketplace business and higher direct returns to shareholders.

Procter & Gamble's prices

For a change, investors are looking forward to the quarterly results from Procter & Gamble, set to come out on Tuesday morning. After years of disappointing growth, the consumer-staples giant is enjoying a solid rebound lately, with organic sales expanding at a 4% rate in each of the last two quarters.

Not only did that result signify market-share gains against rivals like Kimberly Clark, but it also came as P&G raised prices across most of its portfolio. The fact that demand held up through the price boosts implies more sales and profit growth ahead.

CEO David Taylor and his team have warned investors to expect volatility in quarter-to-quarter results as the price changes roll out globally, so it will be important to follow the metrics that support growth including sales volumes, average prices, and operating margin. Meanwhile, P&G already announced its 63rd consecutive annual dividend hike, which, at 4%, matched the increase P&G posted a year ago.

iRobot's costs

iRobot's 2018 went about as well as shareholders could have hoped for, with sales spiking 24% to cross $1 billion for the first time. The robotic cleaning-device specialist maintained its healthy profit margins, too, despite surging price-based competition.

Those wins suggest iRobot has enduring leads in tech innovation and branding that could help it dominate an outsized portion of the industry, as autonomous cleaning devices move into the mainstream. But it will need to work hard to maintain those advantages.

To that end, on Tuesday, investors should hear more details about iRobot's upcoming launches in its core Roomba vacuum franchise. The company is aiming to extend its selling platform deeper into mopping, as well, with a likely bigger marketing push this holiday season.

Finally, look for executives to issue updates on their aggressive plans to revamp the supply chain and manufacturing base to reduce costs and spread out beyond China as it aims to work annual sales closer to the $2 billion mark.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends iRobot. The Motley Fool is short shares of Kimberly Clark and Procter & Gamble. The Motley Fool recommends eBay. The Motley Fool has a disclosure policy.