5 Stocks To Watch: FOSL, CSCO, TRIP, MAR, DE
Estimize | Feb 14, 2017 09:15AM ET
Fossil Group (NASDAQ:FOSL)
Consumer Discretionary - Textiles, Apparel & Luxury Goods | Reports February 14, after the close.
The Estimize consensus is looking for earnings per share of $1.22, one cent above the sell-side consensus and 16% lower than the same period a year earlier. That estimate has decreased 4% since Fossil’s last quarterly report. Revenue is anticipated to decrease 2% to $975 Million, $5M below Wall Street.
What to Watch: Fossil has posted 5 consecutive quarters of negative growth and is about to make it 6. While the company’s bet on smartwatches are expected to drive growth, that innovation has come at a price, and margins for those items are lower than traditional watches. The market for traditional watches and accessories remains challenging, however, which is why Fossil is hoping that diversifying into wearables will get them through the rough patch. Last quarter the company narrowed its 2016 outlook due to these factors.
Cisco Systems (NASDAQ:CSCO)
Information Technology - Communications Equipment | Reports February 15, after the close.
The Estimize consensus is looking for earnings per share of $0.58, 4 cents above the Wall Street consensus and up 2% from the same period last year. That estimate has decreased 5% since Cisco’s most recent report in October. Revenue is anticipated to come in at $11.6B, 2% lower than the year-ago results, and $90M higher than the sell-side’s consensus.
What to Watch: Cisco has a history of beating analysts estimates and is looking to extend its streak tomorrow. Cisco’s winning strategy includes expanding its product portfolio beyond switching and routing products to high growth markets such as cyber security and Internet of Things. Partnerships with Salesforce.com (NYSE:CRM) and Pure Storage (NYSE:PSTG) along with the acquisitions of CloudLock will help secure greater market share and support top-line growth. Unfortunately, Cisco still derives a large portion of revenue from networking switches and routers which continue to show limited growth and upside. As this continues to show weakness Cisco’s other products will be relied on more heavily to carry performance. Analysts are expecting this quarter to worsen from previous quarters on the back of weakness in its legacy business. Additionally, increasing competition, weak IT spending, and currency headwinds should play a role in sluggish growth this upcoming quarter.
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TripAdvisor (NASDAQ:TRIP)
Consumer Discretionary - Internet & Catalog Retail | Reports February 15, after the close.
The Estimize consensus calls for EPS of $0.31, 1 cent above the Wall Street consensus. Revenue expectations of $326.6 million are roughly in-line with the sell-side consensus. Expectations have decreased 7% since last quarter, putting YoY growth expectations at -29% for EPS and 7% for sales.
What to watch: Stronger travel trends are emerging as evidenced by robust results from the airlines, and other travel booking sites such as Expedia (NASDAQ:EXPE) and Priceline.com (NASDAQ:PCLN) this earnings season. This should bode well for TRIP which has already seen shares rise 11% in 2017. The company has taken on several new initiatives recently, including the very successful Instant Booking, expansion into restaurant reservations and development of mobile offerings. TripAdvisor operates in a very competitive online travel agency market that is largely a two horse race between Expedia and Priceline. TRIP is beginning to close the gap though with the acquisition of CityMaps and a new more user friendly website. Expectations have still edged lower in the past 3 months with analysts calling for negative YoY earnings growth.
Marriott International (NASDAQ:MAR)
Consumer Discretionary - Hotels, Restaurants & Leisure | Reports February 15, after the close.
The Estimize consensus calls for EPS of $0.85, one cent above the Wall Street consensus. The Revenue expectation of $4.85 billion is $30M above sell-side consensus. Expectations have decreased 4% since last quarter, putting YoY growth expectations at 10% for EPS and 30% for sales.
What to watch: Marriott is likely to benefit for the very same reasons as TRIP. Increasing travel demand along with continued expansion are expected to boost the quarter’s results. While expected earnings of growth of 10% would be the lowest amount since Q1 2014, expected revenue growth of 30% would be the highest since MAR has IPO’d in 1998. Its recent acquisition of Starwood Resorts makes Marriott the largest hotel operator in the world and provides a huge new layer of revenue.
Deere & Company (NYSE:DE)
Industrials - Machinery | Reports February 17, before the open.
The Estimize consensus is looking for earnings per share of $0.62 on $4.925 billion in revenue, above Wall Street by 11 cents on the bottom-line and $300M on the top. Compared to a year earlier, this reflects a 25% decrease in earnings and a 13% decrease on sales. Earnings estimates have increased 13% the last quarter, while revenues increased 5%.
What to Watch: Deere and other machinery names have been seeing upgrades to their fundamentals in the wake of the nomination of President Trump and his promise to increase infrastructure spending in the US. Just this year, DE’s stock is up 7.5%. Deere has a great record of surprising to the upside, beating Wall Street estimates on EPS for the last 4 years. Investors are hoping they can do so again when they report on Friday.
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