Stocks to watch next week: Tilray, Nike, Carnival, Constellation Brands

American stocks performed great this week, thanks to the recent decision by the Federal Reserve to cut interest rates and the robust stimulus provided by Chinese authorities. The Dow Jones rose for three consecutive weeks, reaching a record high of $42,310.

Similarly, the S&P 500 index surged to a record high of $5,763 while the Nasdaq 100 index jumped to $20,277, its highest swing since July 15.

Most investors are now focusing on the upcoming third-quarter earnings season, which will start on October 15. But before that, several notable companies will publish their earnings. Here are some of the most notable ones to watch.

Nike | NKE

Nike, one of the best-known brands, has become a fallen angel as its stock has plunged by almost 50% from its highest point in 2022.

The company has struggled as its sales and profitability growth has slowed. Most of this slowdown has happened in China, a key market that is going through turmoil. Its online sales have also slowed while demand for sneakers has softened.

Most importantly, competition in the industry has risen, with companies like Hoka and On Holding taking market share.

Most recently, Nike appointed a new CEO, replacing John Donahoe with Elliot Hill, a veteran who has worked there for decades.

Nike stock will be in the spotlight next week as the company publishes its financial results. Analysts expect its sales will be $11.65 billion, a small increase from the $12.9 billion it made last year. They also expect its annual revenue to be $48.8 billion, down from $51.3 billion last year.

Carnival | CCL

The cruise line industry has bounced back this year, with most companies reporting strong forward bookings. 

Carnival, the biggest player in the industry, has continued to underperform the other big players. Its stock is barely moved this year and has risen by 35% in the last 12 months.

Royal Caribbean Cruises has risen by 41% in 2024 and by 105% in the last 12 months while Norwegian has jumped by 5% and 35% in the same period. 

Carnival shares will be in the spotlight as it publishes its financial results on Sep. 30. Analysts expect its revenue to come in at $7.8 billion, a big increase from the $5.7 billion it made in the previous quarter. 

Analysts believe that Carnival stock is undervalued as it has a forward price-to-earnings ratio of 15, lower than the S&P 500’s multiple of 21. Royal Caribbean has a multiple of 18, meaning that Carnival has a chance to close the valuation gap.

Constellation Brands | STZ

Constellation Brands is a leading company in the alcohol industry. It owns some of the top brands in the US like Modelo and Corona. Modelo has gained market share in the past two years as more people boycotted Bud Light. 

Constellation Brands’ revenue growth has grown from over $8.3 billion in 2019 to over $9.96 billion last year. Its annual profit has also risen to over $2.4 billion in the trailing twelve months (TTM).

Analysts expect that Constellation Brands revenue will come in at $2.9 billion, while its annual revenue will be $10.47 billion. Next week’s earnings will likely be a catalyst for a stock that has barely moved this year.

Tilray Brands | TLRY

Tilray Brands stock price has underperformed the market, falling by almost 30% in the last 12 months. Other cannabis companies like Aurora Cannabis, Cronos Group, and Curaleaf have also plunged.

Tilray is working to become a more diversified company by investing in the beer industry, which now accounts for over 40% of its revenue. It recently acquired several brands from Molson Coors, a year after it bought eight brands from AB InBev.

Therefore, its next earnings, scheduled for Friday, will provide more color about its beer business and its profitability. Analysts expect its revenue to be $220 million, a drop from the $229 million it made last quarter.

The other top companies that will publish their results next week are Paychex, McCormick, Lamb Weston, Cal-Maine Foods, Conagra Brands, and Levi Strauss.

The post Stocks to watch next week: Tilray, Nike, Carnival, Constellation Brands appeared first on Invezz