FedEx, Nike, Carnival, Datadog, And AeroVironment Are In The Spotlight

Summary:

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The major economic focus next week will be the latest PCE data that will arrive on Friday. Economists forecast month-over-month growth in core PCE to remain at +0.2%, while the year-over-year rate is expected to drop to +2.6% from +2.8%. Ahead of the PCE print, Bank of America said it sees several reasons to be optimistic that the path to 2% is still on track. The firm thinks a rebalancing of the labor market, lower rent payments, and falling housing service costs could work in the Fed’s favor. Other economic releases to watch for next week include the latest reports on consumer confidence, new home sales, GDP, durable goods orders, and pending home sales.

The earnings schedule for next week includes reports from heavyweights FedEx (FDX) (analysis), Nike (NKE) (analysis), and Walgreens Boots Alliance (WBA) (analysis). Other companies heading into the earnings confessional include Micron (MU), Carnival (NYSE:CCL) (preview), Levi Strauss (LEVI), and Baker Hughes (BKR). The event calendar features Datadog’s (DDOG) annual Dash event in New York City, which Bank of America has circled as a potential catalyst due to new product announcements and integrations that could further entrench Datadog into the AI theme. AeroVironment (AVAV) is also in the spotlight, with its Investor Day event expected to include an update on the company’s portfolio and long-term goals.

Earnings spotlight: Monday, June 24 – Beyond Air (XAIR). See the full earnings calendar.

Earnings spotlight: Tuesday, June 25 – Baker Hughes (BKR), Carnival (CCL) and FedEx (FDX). See the full earnings calendar.

Earnings spotlight: Wednesday, June 26 – General Mills (GIS), Paychex (PAYX), Levi Strauss (LEVI), Micron (MU), and AeroVironment (AVAV). See the full earnings calendar.

Earnings spotlight: Thursday, June 27 – Nike (NKE), McCormick (MKC), Walgreens Boots Alliance (WBA), and Acuity Brands (AYI). See the full earnings calendar.

Volatility watch: Options trading volume has moved much higher on Barnes & Noble Education (NYSE:BNED). The most overbought stocks per their 14-day relative strength index include Insmed (INSM), WalkMe (WKME), and DIH Holdings (DHAI). The most oversold stocks per their 14-day Relative Strength Index include DLocal (DLO), Zentalis (ZNTL), and Seritage Growth Properties (SRG). Short interest is still sky-high on Phathom Pharmaceuticals (PHAT) and Cutera (CUTR) heading into next week’s action.

IPO watch: South Korean media company Webtoon Entertainment (NASDAQ:WBTN), Australian natural gas E&P player Tamboran Resources (TBN), biopharma firm OS Therapies (NYSE:OSTX), and Permian-focused LandBridge (NYSE:LB) are expected to start trading during the week. Interestingly, LandBridge said it is pursuing crypto mining and data center businesses due to its access to water, roads, fiber optic infrastructure, and power as an oil field owner. Also, the post-IPO quiet period expires on Kindly MD (NASDAQ:KDLY) to free up analysts to post ratings.

Dividend watch: Companies that have an ex-dividend date coming next week include FedEx (FDX), Getty (GTY), Humana (HUM), and Mondelez (MDLZ). Companies forecast to increase their quarterly dividend payouts include Kroger (KR) to $0.30 from $0.29, Greenbrier (GBX) to $0.31 from $0.30, General Mills (GIS) to $0.60 from $0.59, and John Wiley (WLY) to $0.3525 from $0.3500. Read through some of the dividend stock picks from Seeking Alpha analysts.

Carnival earnings preview: Carnival (CCL) will report half-year results on June 25 in a report that could also have implications for Royal Caribbean Cruises (RCL), Viking Holdings (VIK), and Norwegian Cruise Line (NCLH) amid conflicting reports on cruise pricing. Notably, Carnival (CCL) also faced an obstacle in the first half of the year due to the temporary closure of its Baltimore port and ongoing conflict in the Red Sea. Ahead of the report, Hargreaves Lansdown analyst Derren Nathan said Carnival (CCL) still appears on track to meet 2024 guidance for underlying cash profit (EBITDA) of $5.6 billion. Nathan reminded investors that the second quarter tends to be the strongest for Carnival (CCL) in terms of cash generation, so investors will be watching to see if the cruise line operator managed to put a dent in its net debt pile, which totaled $28.5 billion at the end of February. Options trading implies a share price move of 8% after the earnings report is released. On Seeking Alpha, analyst Juxtaposed Ideas thinks more clarity about its FQ2’24 performance, near-term booking trends, customer deposit growth, and balance sheet health before deciding.

Nike earnings preview: Nike (NKE) will report earnings on June 26. Analysts anticipated the athletic footwear and apparel giant to report revenue of $12.87 billion, EPS of $0.83, a gross margin rate of 45.3%, and adjusted EBITDA of $1.74 billion. Same-store sales are expected to be higher than a year ago in North America (+1.9%), Greater China (+4.2%), and Asia Pacific & Latin America (+7.0%), but a decline for the Europe, Middle East & Africa segment (-0.3%). Analysts think the FY25 guidance issued by Nike will be more of a focus than the actual earnings numbers, especially if there are hints of margin improvement and benefits from the recent innovation investments. Investors are also seen as prepared for some near-term headwinds, which opens up the possibility that Nike could rally if it avoids a worst-case update. UBS said the big event question is if the report will signal to the market that Nike’s sales growth rate has “bottomed” and is about to inflect. The earnings report could present a compelling entry point, previewed Seeking Alpha author Kenra Investors. “The secret to buying a blue chip like Nike was always taking advantage of negative sentiment during periods of underperformance and letting the compounding power of the business and its dominant position in the market do the rest,” Kenra Investors wrote, adding that “with margins recovering, inventory issues under control, and a P/E ratio nearly historical buy zones, Nike appears poised for a rebound.” Seeking Alpha author Mike Zaccardi concurs, calling the stock a buy if “management executes well in the quarters ahead.”

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.