The holidays are just around the corner. We are now mid-December and the major indexes are trading near record highs as we enter the final weeks of the year. The year is nearing an end, but there are still some big-name stocks set to report their quarterly numbers before the new year.
The recent earnings season was strong, and if this week's quarterly reports show continued strength the market should close out the year near its high.
News of a phase one trade deal between the U.S. and China has boosted market confidence, and investor confidence will likely last into the new year and push stocks higher in the early part of the year.
This week's quarterly reports come from a diverse group of stocks, each of which are leaders in their respective sectors. Whether or not you hold these stocks, they each have the potential to drive the overall market and should be closely watched.
Nike (NKE)
Athletic apparel and accessories giant Nike (NKE) is scheduled to release its fiscal second-quarter numbers after the market closes on Thursday. Nike will report after the market close and analysts forecast earnings of $0.57 for the quarter. NKE stock has appreciated 34% year to date, with shares currently trading just below their all-time high. Despite its maturity, Nike has managed to grow profits at an annual rate of 8.4% over the last five years, and looking ahead analysts expect the shoe giant to grow profits at 16.8% per annum over the next five years. Last quarter Nike topped estimates on both the top and bottom line, but in the previous quarter, Nike had mixed results with an earnings miss and a sales beat. The market expects another earnings surprise this quarter with a $0.62 whisper number. Shares are trading at 37 times earnings which means the stock is priced for perfection and there is the risk of a big selloff on any negative news that may appear in the quarterly report. Economic conditions remain upbeat and consumer confidence is strong which should lead to another solid set of numbers for Nike's second quarter. Analysts see additional upside potential in the stock with an average price target of $104.10.
FedEx (FDX)
FedEx (FDX) is scheduled to report its fiscal second-quarter numbers Tuesday. The shipping company will release its quarterly numbers after the market close with the consensus calling for earnings of $2.80 per share. FDX has trended higher over the last three months and the stock has traded into positive territory on the year with a gain of 3.5%. FedEx missed on the top and bottom line last quarter which initially drove the stock lower before shares found their footing and have trended higher with the overall market. The market expects another small earnings miss with a $2.78 whisper number. The earnings miss has already been priced into the stock, so as long as the company is able to hit the $2.78 or better the stock should continue to build on its recent gains. The stock trades at just 12 times future earnings and profits are forecast to rise at an annual rate of 6% over the next five years. FDX trades at $166.97 with an average price target of $163.25.
Herman Miller (MLHR)
Herman Miller (MLHR) provides business equipment and supplies. The stock has trended steadily higher over the last year and is currently trading just shy of its all-time high. The company will report its fiscal second-quarter numbers Wednesday after the closing bell. Analysts expect the company to post earnings of $0.87 per share, while the street expects a small earnings beat with a $0.90 whisper number. Looking ahead analysts expect strong earnings growth of 50% per annum over the next five years, and with MLHR trading at just 12.8 times future earnings there appears to be a lot of value in the stock at this time even as shares trade just shy of their all-time high. Herman Miller has posted better than expected profits in the last three quarters and sales topped estimates in the last two quarters. Analysts have an average price target of $45.00 on the stock. The stock has risen 57% on the year.
CarMax (KMX)
Auto retailer CarMax (KMX) reports third-quarter earnings Friday. The company will report its quarterly numbers before the market opens on Friday. Analysts expect the company to report earnings of $1.15 per share, while the street expects a small earnings beat with a whisper number of $1.18. KMX stock has trended steadily higher over the last year and is currently trading just shy of its all-time high. Overall economic conditions remain favorable, and low unemployment and high consumer confidence should continue to bring strength into the auto sector. CarMax has posted six straight earnings beats and sales have topped estimates the last two quarters. The stock remains reasonably priced at 19 times earnings, and profits are expected to climb at an annual rate of 12.5% over the next five years. Analysts see additional upside with an average price target of $103.00. KMX is up 56% on the year.
