Earnings to Watch Next Week: Lennar, FedEx, Darden Restaurants and Nike in Focus

• Monday (December 14)
• Tuesday (December 15)
• Wednesday (December 16)
• Thursday (December 17)
• Friday (December 18)

Earnings Calendar For The Week Of December 14

Monday (December 14)

No major earnings scheduled for release.

However, it is worth noting HEXO Corp, a Canada-based company that creates and distributes products to serve the Canadian cannabis market, will release its financial results for the fiscal first quarter 2021 on Monday before the stock market opens.

Hexo earnings will provide a direction for the emerging cannabis industry. Failing to grow on earnings and revenue after consolidation, will lead to a worse stock dilution scenario for the company. Hexo’s statement will test market sentiments on Monday for the higher-risk, higher-reward cannabis sector.

Tuesday (December 15)

 

Wednesday (December 16)

IN THE SPOTLIGHT: LENNAR

LENNAR: Lennar, a home construction and real estate company, is expected to report a profit of $2.35 in the fourth quarter, up from $2.13 per share seen in the same quarter a year ago, which would indicate a positive year-over-year growth rate of more than 11%.

According to Zacks Research, equity strategists forecasts full-year earnings of $7.46 per share for the current financial year, with EPS estimates between $7.39 to $7.53. For the next financial year, strategists expect the company will post earnings of $7.97 per share, with EPS estimates between $6.30 to $9.42.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 16

 

Thursday (December 17)

IN THE SPOTLIGHT: FEDEX

FedEx, the world’s leading express delivery company, is expected to report a profit of $3.93 in the second quarter, down from the previous $4.87. The company has a decent earnings history as its bottom line outshined the consensus mark in two of the trailing four quarters and missed the same in the remaining two. The average beat is 37.7%, according to Zacks Investment Research.

The continued surge in e-commerce demand during the current coronavirus-ravaged times is likely to have boosted revenues in the to-be-reported quarter. With the pandemic largely restricting people to their homes, the need for door-to-door delivery of essentials during this unprecedented crisis is rising, according to Zacks Investment Research.

“E-commerce trends remain robust, which should support results, but the bar is much higher too. All eyes will be on two major areas: (1) more evidence of the breaking wave that could set up a challenging F2H21/2022 and (2) what is peak season going to look like as we have even less visibility than usual,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“We expect a beat for F2Q21 vs. current consensus. We are modelling EPS of $4.09 (adj for TNT integration costs), 10% above cons. of $3.73. Our FY21 EPS of $17.80 is slightly below our prior est. of $18.08 but is 12% above cons. of $15.89 (all adj. for TNT integration costs for comparability). The main drivers of the beat are a continued strong pricing environment in Express International esp. in Freight as well as more a more spread out peak season in Ground as retailers attempt to avoid service breakdowns and surcharges. This will benefit volume and F2Q results at the cost of pricing and F3Q results, in our view,” Shanker added.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 17

 

Friday (December 18)

IN THE SPOTLIGHT: DARDEN RESTAURANTS

Darden, which operates full-service restaurants in the United States and Canada, is expected to report a profit of $0.71 in the second quarter, up from the previous $0.56. The Orlando-based multi-brand restaurant operator has set its Q2 2021 pre-market guidance at 0.65-0.75 EPS.

“Darden will report 2Q21 (November) results on December 18th, before market open. We model adjusted EPS of $0.68, below the midpoint of $0.65 to $0.75 guidance and$0.73 consensus, though our below-consensus positioning is not purposeful. Compared to consensus, we model lower restaurant-level margins of 18.9% vs 19.4% Consensus Metrix, which is partially offset by our lower G&A estimate,” said Andrew M. Charles, equity analyst at Cowen and Company.

“We model a revenue decline of 17.5%, which compares to the guidance of -18% total revenue and Consensus Metrix -17.1% and contemplates Olive Garden and Longhorn same-store sales -15% and -10% vs Consensus Metrix -16% and -11%, respectively. At the time of the1Q21 earnings release, Darden indicated that the company was running modestly ahead of-18% guidance and the guidance contemplated 100 bps of headwind from the Thanksgiving calendar shift. We believe what looked like conservative sales guidance when issued in September now looks fair. Indeed, we point to the stability of sales suggested by industry data from September through November, commentary from Mr. Manocha around dining rooms restrictions helping to transfer sales to off-premise channels, and Darden’s lack of third-party delivery availability amid November’s rise in COVID-19 cases/dining room capacity restrictions,” M. Charles added.

IN THE SPOTLIGHT: NIKE

Nike, the largest seller of athletic footwear and apparel in the world, is expected to report a profit of $0.62 in the second quarter, down from the previous $0.95.

“A faster North America wholesale restart, transitory GM benefits, SG&A control, & lean inventory suggest 2Q upside. Valuation nears highs, but Nike’s more promising revenue and margin outlook post-COVID-19 should continue to drive the stock higher. Lift price target to $165,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“Further, despite Nike’s valuation nearing the upper end of its historical range (37x 2022e consensus P/E vs. 19-38x historical range) as well as its impressive YTD stock run (+35% vs. S&P 500 +14% as of 12/4), we see room for additional share price appreciation on 1) positive EPS revisions on potential upside surprise to the upcoming quarter as well as against management’s seemingly conservative full year (May-21 year) guidance (as outlined in our four key points below), 2) Nike’s relevant exposure to activewear, one of the fastest-growing footwear & apparel categories, a trend which has only been accelerated by COVID-19, and should remain an ongoing tailwind, and 3) Nike’s accelerated shift to its DTC channel, and in particular eCommerce, which should enhance its long-term revenue, margin, and EPS growth,” Greenberger added.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 18