Five Stocks To Watch Thursday And Friday – UA, CAT, AMZN, MSFT, CVX

Thursday, January 28

Friday, January 29

Under Armour (UA)

Consumer Discretionary – Textiles, Apparel & Luxury Goods | Reports January 28, before the open.

The Estimize community is looking for EPS of $0.48 as compared to the Wall Street consensus of $0.46.  Revenues are also slightly higher with an Estimize Mean of $1.14B vs. the Street’s $1.12B.

What to Watch: Once seen as a viable threat to Nike’s (NKE) dominance, Under Armour has fallen victim to a recent rough patch. The combination of unseasonably warm weather as well as a weaker-than-expected holiday season led the stock to collapse 18% in the fourth quarter. Ironically, while expectations on EPS have fallen by 5 cents since the Q3 report, revenue estimates have actually increased 2%. In a competitive footwear and apparel industry, Under Armour has positioned itself as a premium brand against Nike and Lululemon. Footwear continues to be their fastest growing segment and is currently benefitting from the launch of NBA champion, Stephen Curry’s exclusive shoe line. The company has also upped their wearables and smart apparel offerings, recently announcing a line of footwear and apparel that track key fitness metrics. Typically, the fourth quarter is peak season for retailers, however accumulating inventory and decelerating demand for Under Armour’s key products is expected to put a damper on Q4 earnings. Read more about what we’re expecting for UA.

Caterpillar (CAT)

Industrials – Machinery | Reports January 28, before the open.

The Estimize consensus calls for EPS of $0.73, 2 cents above the Wall Street consensus. Revenues are also slightly higher at $11.33B as compared to the Street’s $11.28B.

What to Watch: This proxy for global growth has not been painting a very pretty picture of the world economy lately. After a massive miss on the top and bottom-line in Q3, estimates have come way down. EPS estimates have fallen 21% and revenues are down 7%. Goldman Sachs recently downgraded the stock to a sell under the premise that a new commodity deflation cycle will cripple Caterpillar. The three main concerns for CAT going into this report remain the continual drop in commodity prices, economic turmoil in China and the strong US dollar, none of which seem to be letting up in 2016. On the energy front, oil prices below $30 per barrel means sales of industry related equipment have declined. The plunge in oil prices can be tied to a weakening Chinese economy, an important market for Caterpillar. On top of all this, currency headwinds from a strong U. dollar have weighed down company revenues. To deal with the recent turmoil, Caterpillar is undergoing significant restructuring and cost cutting initiatives which, in the short term, will put pressure on margins. Read more about what we’re expecting for CAT.