Skip to main content

Nike Can Beat Earnings Says Morgan Stanley, Why GE Rose on Bad Guidance -- ICYMI

Publish date:
Video Duration:

We're almost through the week. 

But not before we dissect public company performance for all you eager investors. 

Nike Earnings 

Nike (NKE) - Get NIKE, Inc. Class B Report reports earnings Thursday March 21, and Morgan Stanley analysts think the athletic-wear retailer could easily beat earnings expectations. "We expect a 3Q EPS beat, driven by a stronger top-line and gross margin," the analysts wrote in a note. Nike's gross margin can expand by 90 basis points -- higher than the consensus 75 basis points, on account of two factors. First, rising product costs could abate. Perhaps more importantly, the analysts see evidence of a higher portion of goods sold at full price, rather than at discount.  Plus, Adidas' (ADDYY) recent fourth quarter showed decelerating North America sales growth of 10% year-over-year, compared with the third quarter's 18%, "implying [market] share losses, likely to Nike," Morgan Stanley said.

Furthermore, here's a key factor to watch whenever Nike reports earnings, according to Jeff Marks, senior portfolio analyst for Jim Cramer's Action Alerts Plus: Commentary from Foot Locker (FL) - Get Foot Locker, Inc. Report , Dicks Sporting Goods (DKS) - Get Dick's Sporting Goods, Inc. Report , and Kohl's (KSS) - Get Kohl's Corporation Report . Foot Locker recently mentioned strong Nike sales, which may be a cue that Nike will post solid earnings. 

GE Rising After Poor Guidance? 

General Electric (GE) - Get General Electric Company Report shares rose 3.04% to $10.32 apiece Thursday afternoon, after the embattled industrial conglomerate said 2019 EPS should come in between 50 and 60 cents, missing Wall Street's estimates of 70 cents. 

Related.General Electric Holds Its Ground Despite Disappointing 2019 Profit Forecast. 

Marks said investors shouldn't expect GE to beat estimates on forward looking guidance, and that they should key in on long-term growth prospects for a few specific businesses, like GE's ever-important power unit. CEO Larry Culp said "Power is in a serious turnaround mode." 

Related.Has GE Really Reset Expectations for the Stock?

Related Videos