Big earnings reports this week

 

The bulk of the earnings season is behind us, but there are remains plenty of big-name stocks still left to report their recent quarterly numbers.

So far the earnings season has been decent, with around 75% of the companies reporting thus far posting better than expected quarterly profits. Earnings have been strong, but the market has failed to enjoy an earnings rally.

There have been some high-profile revenue misses, and concern of rising interest rates and a trade war between the U.S. and China continue to weigh on the market.

October was a tough month for the markets, but as corporations emerge from their buyback blackout periods, we could see strength return to the market thanks to the high rate of earnings beats the market has seen so far.

Hoping to continue this trend are a string of big-name companies that are set to report quarterly numbers this week. Here is a look at five quarterly reports that the market will get this week which will help determine the direction of the market in the final months of the year.

Walt Disney

Entertainment mogul Walt Disney (DIS) reports its fiscal fourth-quarter numbers November 8. The company will report after the market close with the consensus calling for earnings of $1.31 versus $1.07 during the same period last year. Disney’s profits were weaker than expected last quarter, but the street is looking for a small earnings beat this quarter with a whisper number of $1.33. The stock was strong ahead of October’s market crash, and DIS was able to weather the market sell off with shares remaining just shy of their all-time high. The company’s pay tv segment, in particular ESPN, continues to face pressure from cord-cutting, but Disney’s theme parks and movie segments have been strong. Analysts see earnings rising by 10% annually over the next five years, and have an average price target of $119.60 on the stock.

Chart courtesy of stockcharts.com

Activision

Video game maker Activision (ATVI) will report its third-quarter numbers November 8. The company reports after the market close, and analysts forecast earnings of $0.50 per share, up from $0.47 during the same period last year. Activision’s biggest competitor, Electronic Arts (EA) has already posted its quarterly numbers, topping estimates on both the top and bottom line. Analysts expect similar results from Activision, with a whisper number of $0.57, indicating a big earnings beat. ATVI traded lower in October with the overall market, but analysts see upside in the stock with an average price target of $84.32 versus its current price of $64.40. The company has topped estimates for three straight quarters and if it is able to extend the streak the stock should find its footing and trend higher through the remainder of the year.

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TripAdvisor

TripAdvisor (TRIP) offers online travel booking services. The company is scheduled to report its third-quarter numbers November 7. Analysts forecast earnings of $0.48 per share, but the street expects a small miss for the quarter with a whisper of just $0.47. Last quarter the company topped estimates by a penny while falling slightly short on revenue. We have seen a lot of companies this earnings cycle top estimates on the bottom line while falling short on revenue, and in the majority of cases the market has reacted negatively. The good news for TRIP is that the street has already factored in the possibility of an earnings miss, so as long as results are not lower than the whisper the stock should be fine, and a surprise earnings beat would help shares rally following the report. Earnings have fallen over the last five years, but analysts think the worst is behind the company and forecast profits will rise by 39% during the current year, and by 16% per annum over the next five years. The stock has trended higher over the last month and should continue rising barring any negative news in the quarterly report.

Chart courtesy of stockcharts.com

Ralph Lauren

Ralph Lauren (RL) will be important to watch as its quarterly results will shed more light on the overall retail sector. Overall economic conditions remain favorable for retails, and consumer confidence is high. RL held up OK during the market correction in October, with the stock maintaining a sideways trend over the last four months. Ralph Lauren has posted better than expected sales and profits the last two quarters, and the street is looking for another earnings beat this quarter. The consensus calls for earnings of $2.17 per share for the quarter, but the street has a whisper number of $2.23. Analysts see earnings rising a little under 11% for the full year and looking ahead expect more of the same with forecast average annual earnings growth of 10.5% for the next five years. RL is trading at $135.24 with an average price target of $134.92.

Chart courtesy of stockcharts.com

Fossil Group

Fossil Group (FOSL) makes watches and a wide range of consumer fashion accessories. Its report will help paint a clearer picture of the retail sector as we move into the holiday shopping season. Analysts expect a loss of six cents per share, better than the $0.11 loss during the same period last year. The stock has been in a weak downward trend dating back to early June despite posting strong Q2 numbers in August that topped estimates on both the top and bottom line. Earnings have fallen by a massive 35% per annum over the last fie years, but analysts see improvement moving forward. Earnings are expected to rise 17% per annum over the next five years which should bring investor enthusiasm back into the stock, but the company has to consistently hit its targets to achieve the growth traders expect to see. FOSL has downside risk, with an average price target of $21.00 which is lower than the current trading price of $23.26, but a strong report would lead to target increases to allow shares to regain an upward momentum.

Chart courtesy of stockcharts.com

Symbols: ATVI DIS FOSL RL TRIP
Michael Fowlkes

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.

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