The three major U.S. equity indexes closed higher Thursday, with the Nasdaq adding 1.62%, the S&P 500 rising by 0.95% and the Dow Jones industrials closing up 0.64%. Energy stocks dropped by 3.7% to become the day’s worst-performing sector, while the utilities sector added 2.4% and was the day’s winner. Changes in initial claims for unemployment benefits were small, indicating that little improvement in employment may be forthcoming. Reports on new home sales and consumer sentiment are due out Friday. Neither is expected to be upbeat.
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After markets closed Thursday, FedEx reported quarterly results that missed on both the top and bottom lines. However, the logistics giant raised fiscal 2023 earnings per share (EPS) guidance and shares traded up about 9% Friday morning.

BlackBerry reported better-than-expected EPS and revenue for its first fiscal quarter of 2023. Shares were about 2% Friday morning.

Before markets opened on Friday, CarMax beat consensus estimates for both EPS and revenue. Total sales were down 5.5% year over year, but prices were strong. Shares were up about 6% in morning trading.

Cruise line operator Carnival posted a worse-than-expected loss and lower-than-expected revenue. The good news is that bookings for future sailings were nearly double year over year in the quarter and that bookings for sailings for the second half of this year are above pre-pandemic levels. The shares traded up about 8% Friday.

Here is a look at two companies scheduled to release quarterly results after markets close on Monday.

Nike

Over the past 12 months, shares of athletic gear maker Nike Inc. (NYSE: NKE) have declined by about 17.8%. From a 52-week high in early November, the stock has dropped nearly 39%.

The company announced Thursday that it is permanently pulling out of Russia. Nike suspended operations in the country in early March following the Russian invasion of Ukraine. Less than 1% of the company’s revenue came from Russia and Ukraine combined.

Nike’s recent focus on direct-to-consumer sales has cost it sales through retailers like Foot Locker and DSW. Sales in China are also expected to be light due to coronavirus lockdowns.

Analyst sentiment on the stock has softened a bit since the prior quarter. Of 33 brokerages covering the Dow stock, 25 (down from 28 of 34) rate the shares a Buy or Strong Buy. The rest have Hold ratings. At a recent share price of around $108.00, the upside potential based on a median price target of $150.00 is about 38.9%. At the high price target of $195.00, the implied upside is just over 80%.
For its fourth quarter of fiscal 2022, which ended in May, Nike’s revenue is expected to come in at $12.1 billion. That would be up 11.3% sequentially but down 1.9% year over year. Adjusted EPS are forecast at $0.81, down 6.6% sequentially and 12.9% lower year over year. For the full fiscal year, current estimates call for EPS of $3.66, up about 2.9%, on sales of $46.73 billion, up about 4.9%.
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Nike stock trades at 29.5 times expected 2022 EPS, 24.5 times estimated 2023 earnings of $4.41 and 20.3 times estimated 2024 earnings of $5.31 per share. The stock’s 52-week range is $103.46 to $179.10. Nike pays an annual dividend of $1.16 (yield of 1.13%). Total shareholder return for the past year was a negative 18.2%.

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Trip.com

Travel services giant Trip.com Group Ltd. (NASDAQ: TCOM) has posted a 12-month share price decline of about 38%. The stock touched a nine-year low of around $14 a share in mid-March, following government-imposed lockdowns in some of China’s major cities. The worst of it was over by early April, but the stock has retreated about 7.4% since then. COVID-19 lockdowns threaten to displace Hong Kong as an Asian travel hub, and Trip.com has turned to Middle Eastern carriers flying to other hubs to maintain its revenue.

Of 32 brokerages covering the stock, 25 have Buy or Strong Buy ratings. Another six rate the stock at Hold. At a share price of around $22.70, the upside potential based on a median price target of $28.37 is 25%. At the high target of $37.83, the upside potential rises to 66.7%.

Analysts expect Trip.com com to report first-quarter revenue of $574.78 million, down by 22.0% sequentially and by 8.3% year over year. The consensus forecast also calls for an adjusted loss per share of $0.08, compared to EPS of $0.08 in the prior quarter and a year-ago loss of $0.05 per share. For the 2022 fiscal year, analysts are looking for EPS of $0.28, down nearly 16%, on sales of $3.03 billion, down 3.9% year over year.

The stock trades at 80.7 times expected 2022 EPS, 18.9 times estimated 2023 earnings of $1.20 and 14.1 times estimated 2024 earnings of $1.62 per share. The stock’s 52-week range is $14.29 to $37.00, and Trip.com pays no dividend. Total shareholder return for the past year was negative 37.7%.

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