Earnings on Wall Street roll on this week with more big players scheduled to announce earnings in the coming days. Here’s what to watch for in reports from Shake Shack Inc (NYSE:SHAK), Herbalife Ltd. (NYSE:HLF), and Transocean LTD (NYSE:RIG).
Shake Shack Inc
Shake Shack will report third quarter earnings on Thursday, November 5 after market close. Analysts estimate that the company will post earnings of $0.07 per share, compared to the $0.09 the company posted in the previous quarter. The trendy and casual burger chain went public with a media frenzy in January, but shares have been volatile since. After hitting a high of $96 in May, shares are now hovering near its low of $38, compared to the initial IPO price of $21.
Analysts and investors will be looking at sales figures to get a sense of the strength of each location. Because many Shake Shack locations opened recently, analysts will be focused more on average weekly sales than same-store sales. In addition, analysts will be looking for an update on Shake Shack’s plans to expand internationally with a recent announcement to open its first location in Japan. Recent reports state that the burger chain currently has 29 international locations and 47 storefronts in the U.S.
Many analysts have shied away from the stock since its popular IPO. According to TipRanks, 4 analysts who have rated the company in the last 3 months are neutral on the stock while 1 is bearish; none are bullish on the company. The average 12-month price target between these 5 analysts is $47.25, marking a 3.69% potential upside from where shares last closed.
Herbalife will post third quarter earnings tomorrow, November 3 after market close. Analysts expect the company to post earnings of $1.07, suggesting a year-over-year decrease of 26%, and quarterly revenue of $1.16 billion, suggesting a decrease from the $1.3 billion posted in the same quarter of last year.
Bill Ackman, hedge fund manager of Pershing Square Group, has been after Herbalife since December 2012 when he accused the nutrient supplement company of running a massive pyramid scheme. He invested in a large short position on the stock and announced a $0 price target. However, this has yet to materialize as Herbalife is currently trading at $56, in between its one-year high of $62 and one-year low of $27. Aside from the politics, analysts will be looking for Herbalife’s growth and the continued success of its customer loyalty program.
According to the 3 analysts polled by TipRanks in the last 3 months, all of them are bullish on the stock. The average 12-month price target between these 3 analysts is $77, marking a 37% potential upside from where shares last closed.
Transocean will post third quarter earnings on Thursday, November 5 before market open. Analysts expect the offshore drilling company to post earnings per share of $0.67 on quarterly revenue of $1.59 billion, marking a 30% year-over-year decrease for both figures.
Transocean, like the oil industry as a whole, has been struggling to regain its footing since oil prices began to crash over a year ago. Consequently, analysts expect a drop in earnings and revenue because several rigs are idling and not operating. Analysts will be looking for the number of contracts in the company’s earnings report, which is indicative of revenue levels. For the past few quarters, analysts have been pleased to see that the company’s operating, maintenance, and administrative costs have decreased and many will be looking to see if this trend can continue. Some of the falling costs can be attributed to the falling oil prices that in turn leave many rigs idling, but the company has also implemented effective cost-cutting measures that will carry over once oil prices stabilize.
According to the 7 analysts polled by TipRanks in the last 3 months, 4 are bearish on Transocean and 3 are staying on the sidelines. The average 12-month price target between these 7 analysts is $10.83, marking a 31% downside from where shares last closed.