5 Stocks To Watch Tomorrow – UA, MCD, CAT, AMZN, GOOGL

The deluge of earnings continues, with these five big names set to report tomorrow.

Under Armour (UA)

Consumer Discretionary – Textiles, Apparel & Luxury Goods | Reports October 22, before the open.

Estimize is currently expecting EPS of $0.45, one cent higher than Wall Street’s consensus. Revenues are also slightly higher at $1.181B vs. the Street’s $1.173B. This would easily get UA out of the red on the bottom-line, with 10% EPS growth, after two negative quarters. Revenues are expected to stay in their recent range with 26% growth.

 

What to watch: Investors have taken this stock up 45% since the beginning of the year, but some worry that it is overvalued.  With a forward P/E of 46 it’s certainly priced to perfection, and will have to hit analyst’s predictions for Q3 or else risk a significant drop in price. By comparison, Skechers (SKX) trades at 20x and Nike (NKE) at 25x. The main focus for UA this quarter will be on footwear, college athletic apparel and women’s apparel. The spike in popularity of basketball shoes makes the footwear segment an obvious target. Currently footwear accounts for less than 20% of UA’s total revenues, vs. competitor Nike for which footwear makes up around 65% of revenues. Under Armour should get some help from the Steph Curry line which is rumored to have sold $100M+ worth of shoes in the last year. The company also recently signed an apparel and footwear deal with the University of Wisconsin worth nearly $100M over a decade, and is pursuing the University of a Texas in a deal that could be worth $15M+ a year. These deals add up quickly and help increase awareness with fans. The company is also going to try to more effectively penetrate the women’s market, currently dominated by brands such as Lululemon.

McDonald’s (MCD)

Consumer Discretionary – Hotels Restaurants & Leisure | Reports October 22, before the open.

The Estimize community expects EPS of $1.28, one penny higher than Wall Street. Revenues are anticipated to come in at $6.452B vs. the Street’s $6.440B.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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