It's official: the holiday season is here, marking the beginning of the race to the end of the year. It's also time for another FOMC interest rate decision, as well as for another look at the employment situation, perhaps the most dreaded measure of the economic recovery in the U.S. This week will bring the Challenger job cut announcements for October on Wednesday, initial jobless claims for last week and the Monster Employment Index for October on Thursday, and the employment numbers for October on Friday.
The earnings season rolls on this week as well, and analysts surveyed by Thomson Reuters are expecting good showings from the reports of Boston Beer Company Inc. (NYSE: SAM), DirecTV Group Inc. (NASDAQ: DTV), Sara Lee Corp. (NYSE: SLE), Starbucks Corp. (NASDAQ: SBUX), and Whole Foods Market Inc. (NASDAQ: WFMI).
Prudential Financial Inc.'s (NYSE: PRU) third-quarter profit is expected to be 44.4% higher year-over-year. The three months that ended in September saw the appointment of a chief governance officer and an investment by the Nippon Life Insurance Company. Analysts expect the Newark, N.J.-based life insurer to report earnings of $1.33 per share, compared to $0.74 in the same period of last year. Revenue is expected to be $6.7 billion, or 8.3% higher than a year ago. So far, the full-year forecast is for earnings of $5.47 per share (+54.5) on $27.9 billion (+7.0%) in revenue. Prudential's earnings have been better than expected in the past two quarters, by as much as 67 cents per share. The long-term EPS growth forecast is 11.8% and the earnings multiple is 9.1x. Prudential's net cash flow from operations has grown in the past few quarters. The First Call consensus recommendation is to buy PRU, and has been for more than 90 days. The mean price target is $52.95. The Street.com suggests now maybe the time to consider insurers such as Prudential. At $45.23, shares are only 3.1% higher than three months ago.
In Coinstar Inc.'s (NASDAQ: CSTR) third quarter, the coin-counting machine and DVD rental kiosk operator sold its entertainment services business and saw its CFO step down. The consensus forecast is for earnings of $0.25 per share, up 36.0% from the same period a year ago. Sales for the three months that ended in September are expected to be 38.0% higher to $331.9 million. Analysts so far expect to see sequential growth in both EPS and revenue in the fourth quarter. Coinstar's earnings have beat the Street view in three of the past four quarters, by as much as a nickel per share. The long-term EPS growth forecast is 27.4%, which is better than that of Netflix Inc. (NASDAQ: NFLX). Coinstar's earnings multiple is 25x, though. The consensus recommendation is to buy CSTR, with a mean price target of $41.22. Zacks recently called the stock a powerful buy. Shares have been trading mostly between $30 and $35 in the past two months but are 62.7% higher year to date.
Israeli generic drug maker Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) received FDA approval for a colon cancer treatment and reached a license/stock purchase agreement in its third quarter. Analysts are looking for Teva to report a profit of $0.88 per share, up 18.2% from the same period a year ago. Sales for the period that ended in September are expected to be 27.6% higher to $3.6 billion. And the forecast is for sequential growth of both EPS and sales in the fourth quarter. Teva has topped earnings expectations in the past five quarters, beating by as much as four cents per share. The long-term EPS growth forecast is 17.2%, which is better than that of competitor Watson Pharmaceuticals Inc. (NYSE: WPI). Teva's earnings multiple is 13x, and the consensus recommendation remains to buy TEVA, with a mean price target of $59.82. The Motley Fool called it a stock poised to pop. Shares have fallen 4.4% in the past three months to $50.48, falling well below the 100-day moving average last week for the first time since early this year.
In its third quarter, Humana Inc. (NYSE: HUM) continued its consumer education initiatives and appointed a new CEO for its veteran's health care unit. The insurer and health care provider is expected to report that earnings rose 15.8% from a year ago to $1.77 per share. Revenue for the period that ended in September is expected to up 9.3% to $7.8 billion. So far, the full-year forecast is for $6.14 per share (+30.5%) on $31.2 billion (+7.9%). Earnings have been better than expected in the past five quarters, by as much as six cents per share. The earnings multiple is 6.6x, and the long-term EPS growth forecast is 10.7%, which is better than that of competitors Cigna Corp. (NYSE: CI) and UnitedHealth Group Inc. (NYSE: UNH). Analysts, on average, recommend buying HUM, and have for more than 90 days; an Oppenheimer analyst expects it to beat the consensus forecast. The mean price target is $44.00. Shares have been trading around $37 for the past month, closing Friday at $37.58.
During its third quarter, use of Mastercard Inc.'s (NYSE: MA) PayPass system spread to Home Depot, Sports Authority, and Tim Hortons, and it declared a quarterly dividend. Analysts expect this credit card provider to report earnings of $2.94 per share, 15.9% higher than last year. Revenue for the period that ended in September is expected to be about the same as a year ago, or $1.3 billion. For the full year, the forecast is for $11.04 per share (+18.1%) on $5.1 billion (+1.8%). In the past five quarters, MasterCard has topped earnings estimates, by as much as 25 cents per share. The long-term EPS growth forecast is 17.6%, which is better than that of American Express Co. (NYSE: AXP) and Discover Financial Services (NYSE: DFS). Short interest in MasterCard has been declining since March, and it also has a consensus buy recommendation, with a mean price target of $245.61. Deutsche Bank recently recommended it, expecting strong third-quarter results. Shares have retreated since reaching a 52-week high of $232.25 recently, and closed Friday at $219.02.
Other expected earnings gainers reporting this week include Cigna Corp. (NYSE: CI), California Pizza Kitchen Inc. (NASDAQ: CPKI), Clorox Co. (NYSE: CLX), CVS Caremark Corp. (NYSE: CVS), Dr Pepper Snapple Inc. (NYSE: DPS), and Kraft Foods Inc. (NYSE: KFT).
Of course, many companies continue to struggle. This week's earnings decliners include Archer Daniels Midland Co. (NYSE: ADM), CBS Corp. (NYSE: CBS), Cisco Systems Inc. (NASDAQ: CSCO), Comcast Corp. (NASDAQ: CMCSA), Marathon Oil Corp. (NYSE: MRO), Polo Ralph Lauren Corp. (NYSE: RL), Royal Caribbean Cruises Ltd. (NYSE: RCL), and Time Warner Inc. (NYSE: TWX).
Analysts expect Ford Motor Co. (NYSE: F), Pulte Homes Inc. (NYSE: PHM), Sunoco Inc. (NYSE: SUN), and Toyota Motor Corp. (NYSE: TM) to report quarterly losses this week.











Reader Comments (Page 1 of 1)
11-01-2009 @ 8:14PM
Beltway Greg said...
MA is Beltway Greg's lunch money pick of the week and here is how you play the game. Just before the earnings release you go long (or short) 10-100-1000 shares. Whatever you can handle. It it goes up it's IPods and Frappacinos for you and all your pals. For one afternoon you're the king of happy hour. If it goes down you get to feverishly pump the sell button in the after hours or the pre-market only to watch the now disgraced stock retake your purchase point and go on to greater glory without you.
So don't be a sissy because this little gem is going to run hard one way or another.