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Five Stocks To Know For Wednesday
Wednesday will be a busy day, as far as the markets are concerned, with earnings announcements for some big players in a number of different industries. With no further ado, here are five stocks to keep your eyes on, going into Wednesday.
IN PICTURES: How To Make Your First $1 Million
Just Buy It
Sportswear giant Nike (NYSE:NKE) announces its fiscal year-end numbers on Wednesday, and analysts are generally upbeat about the company's outlook for its final quarter and guidance for the year ahead. The general consensus is that Q4 earnings will come in at 96 cents per share, a decrease of 2 cents per share over the same quarter last year.
Although revenue numbers are expected to come in down roughly 7% from last year at $4.7 billion, full-year earnings are expected to match last year's, while full-year top-line numbers should beat fiscal '08 by roughly 3%.
Investors have sent the stock price up 24% in the past three months, and good earnings numbers could send "the swoosh" even higher. With strong growth estimates (12.4% over the next five years) and having made a concerted effort to cut costs, Nike looks like a stock that could do some damage in the coming months and years.
Darden Restaurants
Darden Restaurants (NYSE:DRI), the company behind Red Lobster, Olive Garden and LongHorn Steakhouse (just to name a few), has seen its share price remain relatively flat in the past three months, despite seeing the markets rally quite nicely during that period.
Analysts expect earnings of 86 cents per share, which would be a 9% increase over the same Q4 results last year. Darden has had a knack for surprising results recently, beating analysts estimates by 46% and 17% in Q2 and Q3 respectively. In both cases shares jumped up significantly following the results and remained flat until the next earnings report. With a long-term growth estimate in the 12% range, and a forward P/E of 11, Darden looks like it could be a very smart momentum play for savvy investors.
CKE
Another company hoping that investors will be hungry for its shares, CKE Restaurants (NYSE:CKR), announce its 2010 Q1 earnings after the markets close on Wednesday. The firm behind the Carl's Jr. and Hardee's franchises has seen its shares struggle to gain any real momentum, much like many of its competitors in the fast food industry. Current analyst estimates have pegged EPS at 25 cents per share, and have recently been upgraded to a "buy" rating by some of those analysts.
However, Operating in one of the most competitive industries in the world, and having a large amount of its Carl's Jr. restaurants operating in the economic catastrophe that is the state of California, it shouldn't come as a surprise if investors end up being disappointed with CKE's earnings numbers.
Sowing the Seeds
Agricultural seed provider Monsanto (NYSE:MON) has seen its share price show volatility that few can rival. The stock opened the year trading at around $70. Since that time, the stock has seen some serious peaks and valleys, trading as high as $91 and now sitting in and around $80. The reasons behind these drastic price changes are many, but the most recent news has centered around the uncertainty behind Monsanto's latest corn seed product, SmartStax.
Approval by the U.S. Environmental Protection Agency has been delayed and many are questioning whether the next generation seed, which is more resistant to weeds and pests, will ever see the light of day. Monsanto has been an incredibly strong performer during the economic downturn, easily beating estimates in the past four quarters, in twice by greater than 60%. It's hard to bet against a company with such an impressive track record, and with current estimates hovering around 1.18, Monsanto can be expected to continue the trend of "beats," but that may not correlate to a significant rise in share price. Until the issues surrounding its SmartStax product are resolved, the short-term upside potential of the stock is uncertain.
Not Yet Payday
Finally, Paychex Inc (Nasdaq:PAYX), which provides payroll, HR and benefit solutions for small to medium sized business, will also be announcing earnings on Wednesday. The company has seen its shares enjoy a resurgence in the past three months of 15%, piggy backing the market rally to sit at $26.50 today.
With analysts anticipating EPS of 34 cents (the same estimate since March), and revenue numbers to decrease by 2% year-over-year, one could argue that a company that relies so much on the health of small businesses in the country has managed to perform relatively well all things considered. With unemployment numbers still high, and small businesses across the country continuing to struggle, PAYX should remain a cautious investment until we see some better unemployment and GDP numbers.
The Bottom Line
Wedneday will be a busy day, as far as earnings go. Those who are prepared could see a profitable day as well. (For more, read Earnings: Quality Means Everything.)
IN PICTURES: How To Make Your First $1 Million
Just Buy It
Sportswear giant Nike (NYSE:NKE) announces its fiscal year-end numbers on Wednesday, and analysts are generally upbeat about the company's outlook for its final quarter and guidance for the year ahead. The general consensus is that Q4 earnings will come in at 96 cents per share, a decrease of 2 cents per share over the same quarter last year.
Although revenue numbers are expected to come in down roughly 7% from last year at $4.7 billion, full-year earnings are expected to match last year's, while full-year top-line numbers should beat fiscal '08 by roughly 3%.
Investors have sent the stock price up 24% in the past three months, and good earnings numbers could send "the swoosh" even higher. With strong growth estimates (12.4% over the next five years) and having made a concerted effort to cut costs, Nike looks like a stock that could do some damage in the coming months and years.
Darden Restaurants
Darden Restaurants (NYSE:DRI), the company behind Red Lobster, Olive Garden and LongHorn Steakhouse (just to name a few), has seen its share price remain relatively flat in the past three months, despite seeing the markets rally quite nicely during that period.
CKE
Another company hoping that investors will be hungry for its shares, CKE Restaurants (NYSE:CKR), announce its 2010 Q1 earnings after the markets close on Wednesday. The firm behind the Carl's Jr. and Hardee's franchises has seen its shares struggle to gain any real momentum, much like many of its competitors in the fast food industry. Current analyst estimates have pegged EPS at 25 cents per share, and have recently been upgraded to a "buy" rating by some of those analysts.
However, Operating in one of the most competitive industries in the world, and having a large amount of its Carl's Jr. restaurants operating in the economic catastrophe that is the state of California, it shouldn't come as a surprise if investors end up being disappointed with CKE's earnings numbers.
Sowing the Seeds
Agricultural seed provider Monsanto (NYSE:MON) has seen its share price show volatility that few can rival. The stock opened the year trading at around $70. Since that time, the stock has seen some serious peaks and valleys, trading as high as $91 and now sitting in and around $80. The reasons behind these drastic price changes are many, but the most recent news has centered around the uncertainty behind Monsanto's latest corn seed product, SmartStax.
Approval by the U.S. Environmental Protection Agency has been delayed and many are questioning whether the next generation seed, which is more resistant to weeds and pests, will ever see the light of day. Monsanto has been an incredibly strong performer during the economic downturn, easily beating estimates in the past four quarters, in twice by greater than 60%. It's hard to bet against a company with such an impressive track record, and with current estimates hovering around 1.18, Monsanto can be expected to continue the trend of "beats," but that may not correlate to a significant rise in share price. Until the issues surrounding its SmartStax product are resolved, the short-term upside potential of the stock is uncertain.
Not Yet Payday
Finally, Paychex Inc (Nasdaq:PAYX), which provides payroll, HR and benefit solutions for small to medium sized business, will also be announcing earnings on Wednesday. The company has seen its shares enjoy a resurgence in the past three months of 15%, piggy backing the market rally to sit at $26.50 today.
With analysts anticipating EPS of 34 cents (the same estimate since March), and revenue numbers to decrease by 2% year-over-year, one could argue that a company that relies so much on the health of small businesses in the country has managed to perform relatively well all things considered. With unemployment numbers still high, and small businesses across the country continuing to struggle, PAYX should remain a cautious investment until we see some better unemployment and GDP numbers.
The Bottom Line
Wedneday will be a busy day, as far as earnings go. Those who are prepared could see a profitable day as well. (For more, read Earnings: Quality Means Everything.)
by
Investopedia Staff
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