Wall Street can take a big sigh of relief after last week’s announcement that the Federal Reserve will not be hiking interest rates at this time, though the possibility remains for later this year. With that decision behind us, investors can now focus on earnings reports to be released this week by Nike Inc (NYSE:NKE), BlackBerry Ltd (NASDAQ:BBRY), and Red Hat Inc (NYSE:RHT). What should investors look for in the following reports?
Athletic retailer Nike Inc (NYSE:NKE) will release first quarter fiscal 2016 earnings on Thursday, September 24, after market close. Analysts estimate that the company will post earnings per share of $1.19 on $8.2 billion in revenue, compared to the same quarter last year when Nike posted EPS of $1.09 on $8.0 billion in revenue.
Significant year-over-year growth will be tough for the world-leading athletic retailer to achieve because the same quarter last year included the 2014 FIFA World Cup, which provided a strong boost for sales. Furthermore, investors are wary that new players in the field, such as Under Armour Inc (NYSE:UA), are taking away market share from Nike. Last week Under Armour announced new growth goals and forecast $6.5 billion in revenue by 2018, indicating a 25% compounded annual growth rate from 2014 levels.
However Nike investors remain optimistic, hoping that the new “athleisure” style will boost sales as it becomes more appropriate to wear workout gear on a day to day basis. Investors are also preparing for the departure of Phil Knight, current Chairman of the Board and co-founded of the company. Although Knight does not have a departure date, he has requested that current Nike CEO and President, Mark Parker, succeed his role.
Nike has seen strong growth in the past 12 months with shares increasing more than 40% from $80 to current levels of $115. However, analysts have mixed views on the stock. According to the 12 analysts polled by TipRanks in the last three months, eight are bullish on the athletic retailer while four are staying on the sidelines. The average 12-month price target is $122.10, marking a 6% potential upside from current levels.
BlackBerry Ltd (NASDAQ:BBRY) will post second quarter fiscal 2016 results on Friday, September 25, before market open. At this point, analysts estimate that the company will post a loss of ($0.02) per share, compared to the ($0.05) loss per share the company posted in the previous quarter.
Investors will be looking at revenue in hopes that BlackBerry will be able to post stable and consistent figures, as opposed to the fluctuations the company has been posting as it works to get back on track. Since BlackBerry’s fall in 2012, the company has been working to recreate itself as a software company and steer away from hardware. This transition is materializing as demonstrated in last quarter’s figures, in which the company posted software and technology licensing revenue of $137 million; a 150% year-over-year increase.
Earlier this month, Blackberry announced its planned acquisition of Good Technology for $425 million. Although figures from this transaction will not be reflected in this week’s report, investors look forward to the bolstering of BlackBerry’s mobile-security segment.
Most analysts are staying on the sidelines until BlackBerry has consistent figures demonstrating it’s on the right path. According to TipRanks, 13 analysts have rated BBRY in the last three months. Of which, 11 are neutral on the stock and two are bearish. The average 12-month price target for the stock is $8.23, marking a nearly 10% potential upside from current levels.
Software company Red Hat Inc (NYSE:RHT) will release second quarter earnings for fiscal year 2016 tomorrow, September 21, after market close. Analysts expect the company to post earnings per share of $0.44 on $494.6 million in revenue, compared to the same quarter of last year in which Red Hat posted EPS of $0.41 on $446 million in revenue.
Analysts will be looking to see if the company can keep up its growth momentum. Red Hat has delivered impressive results for every quarter in recent memory. The company has grown considerably this year with shares hitting a 52-week high in July of $81.49. Shares are now trading slightly below that figure at $71.06.
According to the four analysts polled by TipRanks in the last three months, three analysts are bullish on Red Hat while one is neutral. The average 12-month price target between the four analysts is $86.25, marking a 22% potential upside from current levels.