Head of Equity Strategy
Summary: Our earnings focus next week is Nike, FedEx, and Carnival, and with recent sell-side analyst upgrades on Nike the pressure is on to deliver on the outlook for 2023. For FedEx the situation is completely opposite with revenue expectations having come down to zero growth over the two next quarters suggesting a hangover for the logistics company following the boom days of the pandemic. In today's earnings watch we are also taking a look Adobe earnings which were releases last night and positively surprised investors.
Can Nike deliver on recent rise in expectations?
The Q3 earnings season is done and we find ourselves in the transition period to the Q4 figures which will begin to roll in around mid-January. In the meantime, earnings releases are still being released from companies which fiscal year does not following the calendar year. Next week’s most important earnings release is Nike which has recently seen several sell-side analysts increasing their price target and betting on margin recovery in 2023. Nike report FY23 Q2 (ending 30 November) on Tuesday with revenue expected at $12.6bn up 11% y/y, but it is really the outlook for the holiday season quarter ending in February 2023 that is the most interesting. Is the consumer still keeping up its spending on discretionary items such as those Nike is selling. Analysts covering Nike seem more optimistic on 2023 that the US banking CEOs on the industry conference last week suggesting US consumer spending is coming down.
The list below shows the most important earnings releases next week. Except from Nike earnings described above, FedEx and Carnival earnings are also key to watch. FedEx is now on the backside of the pandemic boom in logistics and expectations for revenue growth has collapsed to zero revenue growth over the next two quarters which in real terms is very low expectations. This means that the bar is set low for FedEx when it reports earnings on Tuesday. The cruise line operator Carnival is reporting earnings on Wednesday and is still riding the strong rebound wave from the pandemic lows with revenue growth expected at 206% y/y for the quarter that ended in November.
Adobe sounds confident on Figma acquisition
Adobe, the software maker of creative content creation, reported FY22 Q4 (ending 2 December) revenue of $4.5bn which was in line with estimates and adjusted EPS of $3.60 vs est. $3.50 was better than expected. The recent cost reductions have already improved profitability relative to consensus so that was a positive thing for investors. However, the 2023 revenue outlook at $19.2bn was a bit below estimates, so why were shares up 5% in extended trading when overall results and the outlook were mixed at best? Management sounded very confident on its acquisition of Figma, which is a fast growing competitor, which investors believe is crucial for Adobe to maintain its long-term growth prospects. Adobe expects the Figma acquisition to go through in 2023. A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy
