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Top 7 Earnings to Watch Next Week

Oliver Quillia for CNBC.com

After a brutally slow week in earnings, the week of Sept. 17 delivers two scoops of volatility into the market. While technology leads in terms of influence, FedEx’s report is likely to give us a closer look into the overall health of the economy.

FedEx

Background: FedEx is a global transportation and logistics enterprise that offers customers a one-stop source for global shipping, logistics, and supply chain solutions. The company was founded in 1971 and is headquartered in Memphis, Tenn. FedEx trades an average of 2.2 million shares per day with a market cap of $28 billion.

52-Week Range: $64.07-$97.19
Book Value: $46.46
Price to Book: 1.91

FedEx is forecast to report significantly weaker first-quarter earnings before the market opens on Sept. 18. The consensus estimate is currently $1.40 a share, falling 6 cents (4.1 percent) from $1.46 during the same period last year.

Fifteen out of 21 analysts (70-percent-plus) rate FedEx a “buy” or “strong buy.” The company has six “holds” and not a “sell” rating to be found. The average analyst target price for FedEx is $104.59.

From a technical perspective, the chart on FedEx looks interesting. After U.S. Federal Reserve Ben Bernanke and the Fed announced a refill of the cool-aid, FedEx stock took off running higher (along with the rest of the market). FedEx is now above the 200-day moving average again.

The trailing 12-month price-to-earnings ratio is 13.6, the mean fiscal year estimate price-to-earnings ratio is 12.7, based on earnings of $7.02 per share this year.

Shareholders receive 56 cents annually in dividend payments. The yield based on a recent price is 0.63 percent. The dividend has grown by an average of 7.6 percent in the last five years.

Even after the increase following the quantitative easing announcement, shares are slightly lower in the last month of trading. Shares are about break even at 0.5 percent less than a month ago.

In the previous FedEx’s earnings release on June 19, the closing price was $91.01. In comparison to a recent price of $90.47, shares are down 0.6 percent.

The last reported short interest is small at 1.7 percent.

Tibco Software

Background: Tibco Software is a leading provider of software solutions that enable businesses to integrate internal operations, business partners and customer channels in real time. Through the company’s products and services, they enable computer applications and systems to communicate efficiently across local or wide area networks, including the Internet. The company was founded in 1985 and is headquartered in Palo Alto, Calif. Tibco trades an average of 3.1 million shares per day with a market cap of $5 billion.

52-Week Range: $20.04 to $34.67
Book Value: $4.80
Price to Book: 6.56

Strong third-quarter earnings growth is expected by Wall Street after the market closes on Sept. 20. The consensus mean is 20 cents a share, a gain of 3 cents (15 percent) from 17 cents during the corresponding quarter last year.

Analysts approve the direction Tibco is headed. Eleven of the 17 analysts covering the company give a “buy” recommendation, and none of the analysts give a “sell” rating. The average analyst target price for Tibco is $34.66.

The 60-day moving average after dipping below the 200-day moving average and $28, is now once again trending higher. Trading volume exploded this week and overall the outlook looks good for an earnings beat.

The trailing 12-month price-to-earnings ratio is 34.8, the mean fiscal year estimate price-to-earnings ratio is 33, based on earnings of 94 cents per share this year.

The last month has been very good for investors, the stock has leaped higher with an 11.5 percent increase.

Currently, the short interest based on the float is somewhat small and not a big concern. Short interest is 4.9 percent.

ConAgra Foods

Background: ConAgra Foods has transformed itself into an industry-leading, branded, and value-added food company. ConAgra Foods recently announced its realignment from three operating channels to two, with the previous ConAgra Foodservice merging with ConAgra Food Ingredients to form ConAgra Foods Commercial Products. The company was founded in 1919 and is headquartered in Omaha, Neb. Conagra trades an average of 3.3 million shares per day with a market cap of $10.4 billion.

52-Week Range: $22.39 to $27.34
Book Value: $10.89
Price to Book: 2.34

First-quarter earnings is highly anticipated by hopeful investors expecting an earnings growth report before the market opens on Sept. 20. The analysts’ mean appraisal is presently 36 cents a share, a gain of 7 cents (19.4 percent) from 29 cents during the corresponding quarter last year.

The trailing 12-month price-to-earnings ratio is 14.4, the mean fiscal year estimate price-to-earnings ratio is 12.9, based on earnings of $1.98 per share this year. The average analyst target price for ConAgra is $28.

Shareholders receive 96 cents annually in dividend payments. The yield based on a recent price is 3.76 percent. Looking back at the three-year history of declared dividends, this company has paid on average 88 cents per share each year in dividend payments.

Shareholders continue to receive higher dividends. The company’s distributions have increased 5.7 percent a year, during the last five years.

As the company moves closer toward the earnings release, shares have transformed from a highly bearish trend, toward an almost bullish trend. Shares have moved 3.7 higher in the last month.

In the previous ConAgra earnings release on June 21, the closing price was $25.26. In comparison to a recent price of $25.98, shares are up 2.9 percent.

The last reported short interest is negligible. Short interest is 1.2 percent.

Rite Aid

Background: Rite Aid is a retail drugstore chain in the U.S. serving customers in numerous states across the country and in the District of Columbia. The company sells prescription drugs and a range of front-end products. Rite Aid trades an average of 3.3 million shares per day with a market cap of $1.2 billion.

52-Week Range: $0.85 to $2.12
Book Value: $-2.90

Second-quarter earnings is highly anticipated by hopeful investors expecting an improving report before the market opens on Sept. 20. The analysts’ mean appraisal is presently looking for a loss of 8 cents a share, a somewhat better result compared to the loss of 12 cents during the corresponding quarter last year.

Right now, Rite Aid has zero “buy” recommendations out of four analysts covering the company, three “holds” and one “sell” recommendation. The average analyst target price for Rite Aid is $1.35.

I would not be surprised if the price target gets raised after the earnings release. Walgreens has done a great job at running circles around Rite Aid, but after following Rite Aid on and off for over a year, it appears to regaining its footing.

In the last month, the stock performed well with a 7.5 percent increase. Last quarter Rite Aid’s earnings release was held on June 21 and the previous closing price was $1.25. Relative to a current price of $1.28, shares are up 2.4 percent.

The current proportion sold short based on the float is 7.5 percent. While 7.5 percent is high by normal standards, the short interest is now near the 12-month low. Bottom line, Rite Aid might blast higher from here. With a significant beat, we may witness a serious short squeeze.

General Mills

Background: General Mills is one of the leading producers of packaged consumer foods and markets its products primarily through its own sales organizations, supported by advertising and other promotional activities. Such products are primarily distributed directly to retail food chains, cooperatives, membership stores, and wholesalers. The company was founded in 1928 and is based in Minneapolis, Minn. General Mills trades an average of 4 million shares per day with a market cap of $25.5 billion.

52-Week Range: $36.75 to $41.06
Book Value: $9.90
Price to Book: 3.7

General Mills is forecast to report slightly lower first-quarter earnings before the market opens on Sept. 19. The consensus estimate is currently 62 cents a share, falling 2 cents (3.1 percent) from 64 cents during the same period last year.

The last date General Mills released earnings was June 27 and the closing price was $37.55. Based on a recent price of $39.44, shares are up 5 percent.

The company currently pays $1.32 per share in dividends for a yield of 3.36 percent. Examining the dividend history of a company is a great way to help understand what we may expect in the future. Of course, the past doesn’t guarantee future dividends, but it does paint a useful picture. The three-year average amount they have distributed to shareholders per year is $1.10. General Mills has a strong history of raising the dividend level. Dividends have moved up 11.1 percent on average per year during the last five years.

Shares are slowly but steadily climbing in the last 30 days. Shares are now 2.5 percent higher than last month. The last reported short interest is tiny at 1.9 percent.

Over half the analysts covering General Mills rate it as a “buy” or “strong buy.” Eleven of the 17 analysts covering the company give a “buy” recommendation. Six analysts rate it a “hold,” and none of the analysts recommend selling. The average analyst target price for General Mills is $41.36.

The trailing 12-month price-to-earnings ratio is 15.4, the mean fiscal year estimate price-to-earnings ratio is 14.8, based on earnings of $2.65 per share this year.

Adobe Systems

Background: Adobe Systems is a provider of graphic design, publishing, and imaging software for Web and print production. It offers a market-leading line of application software products for creating, distributing, and managing information of all types. Adobe trades an average of 4.4 million shares per day with a market cap of $15.9 billion.

52-Week Range: $22.89 to $34.78
Book Value: $12.35
Price to Book: 2.64

Third-quarter earnings are highly anticipated by Wall Street, expecting a favorable report after the market closes on Sept. 19. Analysts’ mean appraisal is presently 47 cents a share, a gain of 3 cents (6.4 percent) from 44 cents during the corresponding quarter last year.

The last date Adobe released earnings was June 19 and the closing price was $32.89. Based on a recent price of $32.85, shares are down 0.1 percent. The average analyst target price for Adobe is $34.27.

The trailing 12-month price-to-earnings ratio is 17.6, the mean fiscal year estimate price-to-earnings ratio is 16.3, based on earnings of $1.98 per share this year.

Shares have traded slightly lower in the last month of trading. Shares are about break even at 1.5 percent less than a month ago. This doesn’t give us much insight as to what to expect, but it’s a fair statement to say that investors should not expect to get the legs knocked out from under them this release.

Currently, 2.9 percent short interest based on the float is small and not a big concern.

Oracle

Background: Oracle is one of the world's leading suppliers of software for information management. Oracle trades an average of 19 million shares per day with a market cap of $157 billion.

52-Week Range: $24.91 to $33.81
Book Value: $8.91
Price to Book: 3.64

Wall Street is optimistic about Oracle’s first-quarter earnings after the market closes on Sept. 20. Analysts’ mean appraisal is presently 51 cents a share, a gain of 6 cents (11.8 percent) from 45 cents during the corresponding quarter last year.

The last time Oracle released earnings was June 18, and the closing price was $27.12. Based on a recent price of $32.71, shares are up 20.6 percent.

Analysts approve the direction Oracle is headed. Twenty-four of the 35 analysts covering the company give a “buy” recommendation, 11 analysts rate it a “hold” and none give it a “sell” rating.

Twenty out of 35 analysts now rate Oracle a “strong buy” up from 19 analysts a month ago. Compared to three months ago, even more analysts are rating this company as a “strong buy.” The average analyst target price for Oracle is $33.86.

Oracle is in a classic bull trend. The moving averages are moving higher and shareholders are happy. The 60-day moving average is above the 200-day moving average, which is highly bullish right along with the price traveling higher. Trend followers love this pattern and will hold a position until a technical break results in a signal to exit.

The trailing 12-month price-to-earnings ratio is 13.7, the mean fiscal year estimate price-to-earnings ratio is 12.6, based on earnings of $2.57 per share this year.

Oracle currently has an annualized dividend of 24 cents, yielding 0.74 percent. Not enough to influence a buying decision, but a nice bonus none the less.

I use SEC.gov, Zacks.com, WSJ.com, Tradestation, and Reuters for my data. PE is generally adjusted price-to-earnings based on an average number of shares.

—By TheStreet.com Contributor Robert Weinstein

Additional News: Why FedEx Profit Warning May Be Bad Sign for Stocks

Additional Views: 5 Stocks That Could Withstand Economic Woes: Cramer

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Disclosures:

At the time of publication, Robert Weinstein held no positions in any of the stocks mentioned.

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