Facebook Inc, McDonald’s Corporation, Coach Inc, Apple Inc., AT&T Inc. – Stocks To Watch by Estimize
Monday, January 25
Tuesday, January 26
Greenhaven Road Capital commentary for the third quarter ended September 30, 2022. Q3 2022 hedge fund letters, conferences and more Dear Fellow Investors, The Fund is enduring its worst drawdown since inception. We were down again in the third quarter, bringing year -to-date returns to approximately -59%. Returns vary by . . . SORRY! This Read More
Wednesday, January 27
Consumer Discretionary – Hotels, Restaurants & Leisure | Reports January 25, before the open.
The Estimize community is looking for EPS of $1.25 as compared to the Wall Street consensus of $1.23. Revenues are also slightly higher with an Estimize Mean of $6.29B vs. the Street’s $6.24B.
What to Watch: Despite losing market share to the rapidly growing fast-casual sector, McDonald’s posted better than expected third quarter results. The fast food giant has likely been a beneficiary of the struggles Chipotle faces with multiple E. coli outbreaks. Meanwhile, the quick service restaurant is trying to reposition itself through new menu offerings, marketing strategies and global expansion. In mid 2015, McDonald’s restructured operations into 4 segments combining markets with similar needs, challenges and opportunities for growth. These include the United States,mature markets, higher growth markets and foundational markets. So far this has paid off as share prices rose 27% over 2015 with the company poised to close the fiscal year strong. Read more about what we’re expecting for MCD.
Consumer Discretionary – Textiles, Apparel & Luxury goods | Reports January 26, before the open.
The Estimize consensus calls for EPS of $0.66, in-line with Wall Street’s estimate. On the other hand, revenues expectations from Estimize are slightly lower at $1.289B, $10M below the Street.
What to Watch: In a surprising turn of events in 2015, Coach began to outpace its fiercest competitor, Michael Kors, in the so-called “handbag wars.” During the holiday season, Coach managed to have better sales than KORS, something that will be reflected in Tuesday’s report. The company has been undergoing a brand transformation as it reinvigorates its product lines and store aesthetics. A major part of this restructuring has been focused on acquisitions, such as that of Stuart Weitzman a year ago, as Coach looks to become a multi-brand company. For the last two quarters COH has slightly beat estimates on the top and bottom-line, but is still expected to continue its streak of negative YoY EPS growth. On the bright side, revenues are anticipated to increase 6% YoY for their FQ2 2016, the first positive growth rate in nine quarters.
Information Technology – Computers & Peripherals | Reports January 26, after the close.
The Estimize Mean consensus calls for EPS of $3.27, three cents above the Wall Street estimate of $3.24. Revenue expectations from Estimize also come in slightly higher at $77.0B vs. the Street’s $76.4B, having been revised downward by about $1.2B since the company’s last quarterly report.
What to Watch: Tuesday’s report will be a pivotal one for Apple as it has been widely publicized that the company is experiencing weaker iPhone sales. As a result, shares of the tech giant have fallen more than 25% from their highs in 2015 and have already dropped 10% in 2016. After the runaway success of the iPhone 6, demand for the recently launched iPhone 6s has fallen flat as the mobile industry goes through a pricing war from a crowded competitive landscape. Many companies in Apple’s supply chain have begun to experience headwinds due to falling demand for Apple products. Key Apple chipmaker, Taiwan Semiconductor Manufacturing, reported a decline in revenues when they released fourth quarter results on January 14, but also reported record earnings. Total revenues were down 8.5% YoY, and chip revenue from consumer electronic devices which Apple falls under was down 5%. Read more about what we’re expecting for AAPL.
Telecommunication Services – Diversified Telecom | Reports January 26, after the close.
The Estimize community is looking for EPS of $0.66 as compared to the Wall Street consensus of $0.64. Revenues are also slightly higher with an Estimize Mean of $43.08B vs. the Street’s $43.06B.
What to Watch: Expectations for AT&T have been rising into its report. In the last three months the Estimize community has increased their EPS estimates by 6% and revenues by 10%. The stock also closed nearly 2% higher in Friday’s trading, ahead of Tuesday’s fourth quarter release. This is the first full quarter that will reflect the acquisition of DirecTV, a deal that closed on July 24, 2015. That acquisition is responsible for the upward trajectory in expectations, and should result in a doubling of AT&T’s Entertainment and Internet Services’ segment. Other segments such as Consumer Mobility and Business Solutions posted lackluster results in Q3, and are anticipated to finish out the year in the same manner. Many analysts believe AT&T could see subscriber losses in 2016 as smaller competitors such as T-Mobile and Sprint steal market share with their value offerings which appeal to price conscientious customers. The telecom giant could be forced to broadly lower prices to reduce churn.
Information Technology – Internet Software & Services | Reports January 27, after the close.
The Estimize consensus calls for EPS of $0.69, a penny higher than the Wall Street consensus and an increase of 11% over the past three months. Revenue expectations of $5.383B have also been lifted in that period by 6%, and are $27M ahead of the Street.
What to Watch: Facebook – The social media darling is poised to close an impressive 2015 when it reports fourth quarter earnings. Last quarter, Facebook reported 1.55B monthly active users (MAU), a resounding 14% YoY increase. This is far better than certain peers such as Twitter which only recorded 320M MAUs last quarter, and LinkedIn which reported 396M members in Q3. Facebook has also developed an interest in growing internationally. Despite lower revenue per user in emerging markets, Mark Zuckerberg has been drawn to expanding in India, home to more than one billion people who are not connected to the internet. By reaching a larger audience, Facebook’s instant ads will create more value for advertisers. Several of Facebook’s acquisitions also had a robust 2015, including WhatsApp, Oculus Rift, and Instagram, more about how those are being monetized should be shared on Wednesday’s call. Facebook’s revenues have been growing at 40%+ for the last eight quarters, an impressive feat considering how large the company is now, and that doesn’t appear to be dropping off anytime soon.
Be sure to get your estimates in for this week’s reports!