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5 Stocks To Watch Ahead Of Tuesday’s U.S. Open

Published 01/30/2017, 06:24 PM
Updated 07/09/2023, 06:31 AM

Exxon Mobil (NYSE:XOM)

After recording negative YoY EPS growth for the last 8 consecutive quarters, XOM is expected to post triple-digit growth in 2017. Energy is finally starting to make a comeback, staying above the $50 mark so far this year. Promises from OPEC and non-OPEC countries such as Russia to keep production low have given investors hope that prices could continue to improve throughout 2017, with many analysts targeting oil's price range at $60-$70/barrel. However OPEC’s spotty record of adhering to such production quotas still has many skeptical about whether or not it will be carried out.

Oil and Gas companies couldn’t have a better advocates than former XOM CEO, Rex Tillerson, as the newly appointed Secretary of State (if confirmed) and President Trump who supports the removal of EPA regulations which have hampered the industry.

Under Armour (NYSE:UAA)

Three specific metrics grab investors' attention with each passing quarter that Under Armour reports earnings: sales growth, profit margins and international expansion. The athletic shoe maker is currently sporting a 5-year streak of posting at least 20% growth on the top line. This streak is in jeopardy of ending after management guided weak holiday and fiscal 2017 sales during its third-quarter report. In an effort to energize growth, Under Armour began investing in newer endeavors such as international expansion, high-end clothing and wearable technology. Still, plenty of evidence points to a slowdown in core segments, particularly basketball shoes. Current channel checks show Curry brand shoes fell short of sales targets on Footlocker and Finish Line (NASDAQ:FINL) websites. The same held true for men’s running footwear and women’s brands from competitors like Nike (NYSE:NKE) and Adidas (DE:ADSGN) who have recently captured greater market share. Under Armour’s slump not only impacts the top line, but also stretches margins thin. For top brands like Under Armour and Nike, margins dictate whether the companys performed well during the quarter.

Mastercard (NYSE:MA)

The success or failure of credit-card companies highlights a number of facets like the state of the spending environment. With holiday spending appearing to have taken a turn for the better, indications look strong for Mastercard’s first-quarter report. The credit company made significant strides recently and looks to extends its winning streak to four consecutive quarters. A large portion of Tuesday’s results is predicated on international markets, namely Europe and Asia. Early signs point to a slight improvement in Europe while Asian markets still appear mixed. Meanwhile, Mastercard’s digital strategy, which includes a partnership with PayPal (NASDAQ:PYPL), supports the top line through greater processed transactions and volume.

Coach (NYSE:COH)

Thriving luxury brands are far and few between in the current retail environment. As a result, brand names like Coach struggle to make sales at face value and must resort to heavy discounting to push products. It hasn’t helped that ongoing currency headwinds continue to take a toll on international markets and tourism-related sales. Coach remains dedicated to expanding its outlet stores and online platform to offset some of these losses. The ongoing transformation includes the acquisition of Stuart Weitzman, which is believed to provide accretive effects to performance. Nonetheless, the broader downturn in modern luxury sales promises to hamper financial performance, despite a promising slew of improvements.

Harley-Davidson (NYSE:HOG)

Harley commands a large market-share position in the motorcycle industry, giving it a slight upper hand over its competitors. But investors should still be on high alert this week after Harley’s peer Polaris (NYSE:PII) reported weak quarterly earnings and soft forward guidance. Overall, motorcycle sales struggled in recent years as two-wheel enthusiasts shift away from traditional hogs to sport bikes. For Harley, that’s a problem that has resulted in weak comparisons. In the third quarter, the bottom line dropped by 7% while sales fell 17% despite heavy discounting amid a broad product portfolio.

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