Wall Street’s Week Ahead: Nike Inc., StemCells Inc., Petroleo Brasileiro SA Petrobras

Product innovation, restructuring plans, falling oil prices, and debt levels color this week’s earnings reports from Nike Inc. (NYSE: NKE), StemCells Inc. (Nasdaq: STEM), Petroleo Brasileiro SA Petrobras (ADR) (NYSE: PBR). Let’s take a closer look at what analysts are looking for from these companies:

Nike Inc

Nike will release its Q3:16 earnings on Tuesday, March 22 after market close. Analysts are expecting the company to post revenues of $8.9 billion and earnings of $0.49 per share, compared to revenues of $7.46 billion and earnings of $0.45 for the same quarter of last year. These estimates mark narrow growth deceleration, an estimated 9%, compared to double digit growth the past 6 quarters.

For this quarter, analysts will be watching for future orders. While the company guided 20% growth, analysts predict only 13% growth due to FX headwinds. Still, this number reflects healthy future order levels and indicates demand growth. Related, future orders are expected to include Olympic products. Despite rising competition from the likes of Under Armour and Adidas, Nike still has over 60% U.S. market share in athletic footwear.

Although SG&A is expected to grow due to investments in digital commerce and major events including the Super Bowl and NBA All-Star game, management’s cost cutting measures combined with efficient pricing should lead to favorable gross margin for the quarter. Other factors to watch for in this report are online sales growth and focus on innovation.

According to TipRanks, out of the 16 analysts who have rated the company in the last 3 months, 14 gave a Buy rating while 2 remain on the sidelines. The average 12-month price target for the stock is $78.67, marking a 25% upside from where shares last closed.

StemCells Inc

StemCells is expected to report Q4:15 earnings on March 15 after market close. For this quarter, analysts are expecting the stem cell-based therapeutic product maker to post revenues of $30,000 and a loss of $(0.06) per share, compared to revenues of $21,000 and a loss of $(0.14) per share for the same quarter of last year. Analysts will be looking for the effects of the company’s restructuring plan, announced in December, which includes the suspension of the company’s Phase 2 Radiant™ study, a treatment of age-related macular degeneration, in order to find a suitable partner for additional funding. Instead, the company is choosing to focus all of its resources on its HuCNS-SC® platform technology to treat chronic spinal cord injury. The shift is expected to reduce $20 million in costs over the next two years. Additional elements of the plan include a 25% cut in the company’s workforce.

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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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