Earnings Previews: Carnival, Costco, Nike, Trip.com

Of the four companies we previewed that reported quarterly results Tuesday night or Wednesday morning, two (Stitch Fix and General Mills) posted gains Wednesday morning and two others (Adobe and FedEx) showed losses.

After markets close Wednesday and before they reopen Thursday, BlackBerry and Rite Aid are set to report quarterly results. We posted our previews of those companies on Tuesday.

Here are previews of three companies reporting results Thursday afternoon and one reporting earnings first thing Friday.

Costco

Warehouse retailer Costco Wholesale Corp. (NASDAQ: COST) stock has gained more than 37% over the past 12 months, including a gain of more than 20% in 2021. Sales have continued to rise during the company’s fiscal fourth quarter ended in August, but same-store sales growth has dipped. Rising costs may have cut into margin growth, even though Costco ended in March its premium of $2 per hour for employees who worked during the pandemic. Expectations are set fairly high for Thursday night’s report.

Of 33 analysts covering the stock, 22 give the shares a Buy or Strong Buy rating and another nine have a Hold rating on the stock. At a recent price of around $451.90, the upside potential based on a median price target of $470 is 4%. At the high target of $515, the upside potential is nearly 14%.

Fiscal fourth-quarter revenue is expected to increase by nearly 36% sequentially to $61.45 billion, up 15% year over year. The forecast for adjusted earnings per share (EPS) is $3.54, up 28.7% sequentially and 16.4% year over year. For the full fiscal year, analysts have forecast EPS at $10.72, up 16%, and revenue at $194.63 billion, up 16.7%.

Based on the current price, the stock trades at 42.1 times expected fiscal 2021 EPS, 38.5 times estimated 2022 earnings, and 34.8 times estimated 2024 earnings. The stock’s 52-week range is $307.00 to $469.77. Costco pays an annual dividend of $3.16 (yield of 0.7%).

Nike

Athletic gear maker Nike Inc. (NYSE: NKE) reports fiscal 2022 first-quarter results after markets close Thursday. The stock has gained nearly 40% over the past 12 months, including a gain of 11.7% for the year to date. The Dow 30 component has said it expects to generate $50 billion in sales this year, a jump of 12% over its 2020 total. The company’s EPS outlook calls for growth in the mid- to high teens, well above its long-term growth rate of just over 12%. As with Costco, expectations are high.

Of 29 analysts covering the stock, 24 have rated the stock a Buy or Strong Buy, and four others rate the shares at Hold. At a price of around $157.00, the implied upside based on a median price target of $185 is 17.8%. At the high target of $221, the implied upside is nearly 41%.

First-quarter revenue is tabbed at $12.4 billion, up about 1% sequentially and 17.7% year over year. Adjusted EPS are forecast at $1.12, up 20.3% sequentially and nearly 18% year over year. The current estimate for the company’s 2022 revenue is $49.79 billion, up nearly 12%, while EPS is expected to rise by 17.5% to $4.18.

Nike stock trades at a multiple of 36.9 times expected 2022 EPS, 30.9 times estimated 2023 earnings and 26.5 times estimated 2024 earnings. The stock’s 52-week range is $118.80 to $174.38. Nike pays an annual dividend of $1.10 (yield of 0.71%).

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