(Photo credit: Paul Lowry)
In this week's 5 Stocks to Watch, we take a look at the names with the largest shifts in EPS consensus ahead of earnings reports.
Monday, August 10
Tuesday, August 11
Friday, August 14
Take Two Interactive (TTWO)
Information Technology, Software | Reports August 10, after the close
On August 4, the Estimize EPS consensus for TTWO stood at $0.22. It has now been revised upward to $0.32, a 45% jump in just a few days, and higher than Wall Street and corporate guidance of $0.30. Revenues of $353M have only fallen slightly from $356M on that date, in line with the Wall Street consensus.
What to watch for: Other game makers have been performing very well this season, with Electronic Arts and Activision Blizzard both beating on the bottom-line. TTWO has an incredibly strong pipeline for the rest of the year with planned releases of NBA 2K15, Civilization: Beyond Earth, Evolve and others. One concern is that new releases will not be able to match the popularity of the Grand Theft Auto franchise which is not set to release its next installment until 2017.
Fossil (FOSL)
Consumer Discretionary, Textiles, Apparel and Luxury Goods | Reports August 11, after the close
Since July 27, the Estimize EPS consensus for FOSL has fallen to $0.97 from $1.07, a 10% drop, but still above Wall Street's $0.84 estimate. The Estimize consensus calls for EPS of $0.02 vs. Wall Street's $-0.03, suggesting a YoY decline of 86%. Revenues of $781.7M have fallen to $767.9M, as compared to Wall Street's estimate of $751.5M.
What to watch for: Michael Kors, one of Fossil's main licensing partners, blew expectations out of the water when they reported results last week, mainly lead by strength in jewelry and watches. This bodes well for Fossil. As weakness in handbags for some of the luxury goods retailers wanes they are beginning to invest more in the jewelry space, with FOSL recently signing a licensing agreement with Kate Spade. The one drawback: the stronger dollar will still cut into the bottom-line this quarter.
