Yahoo Finance Trending tickers: Nike l Oil l 888 l Peloton
A look at the stocks making headlines on Thursday
Nike (NKE)
Nike is set to report its fiscal first-quarter earnings with Wall Street analysts expecting the sports apparel giant to post revenue of approximately $13bn (£10.66bn) for the quarter.
In addition, analysts estimate Nike's gross margin for the quarter to come in at 43.7%, compared to 44.3% in the same period last year.
“On an adjusted EPS basis, we're expecting Nike to report $0.75 of adjusted earnings. That's actually down from what they reported in the same period last year. Last year, Nike reported $0.93 of EPS in that first quarter,” Yahoo Finance's Josh Schafer said.
Read more: FTSE and European stocks open mixed as oil prices surge
“And then when you take a look at gross margins, the estimate is for a gross margin of 43.7%. That is also down from what Nike reported last year at 44.3%,” he added.
Schafer also noted how China has been a big part of Nike's growth story.
“They do almost $2bn a quarter in China alone. But China has struggled coming out of Covid, and it hasn't been as robust as people had thought. That's weighed on shares. What do we hear about greater China tomorrow is a big part of that story,” he added.
Oil (CL=F, BZ=F)
Crude oil prices extended gains again on Thursday as inventories at the largest storage hub in the US fell toward levels nearing operational minimums.
The EIA said stocks fell to 22 million barrels in the fourth week of September at the facility in Cushing, Oklahoma.
At the time of writing, US crude oil, or West Texas Intermediate (CL=F), rose 0.73% to trade at $94.36 (£77.62) a barrel, while Brent crude (BZ=F) climbed 0.75% to $97.27 a barrel.
Brent was last at that level in November 2022, while US crude was last at the $94 level in August 2022.
The high oil prices support the case that crude could hit $100 a barrel by the end of the year, with Goldman Sachs also recently raising its price target to $100 for the next 12 months.
Read more: Oil prices close in on $100: Will it reverse inflation progress?
"Oil markets continue their upward climb with Brent crude trading above $97 a barrel with another tailwind provided by data from the EIA which reported a sharp drop in US crude stockpiles of 2.2 million barrels, adding to concerns about a supply deficit in the market. Underlying oil price gains have catapulted Shell and BP towards the top of the FTSE 100,” Victoria Scholar, head of investment at Interactive Investor, said.
Russ Mould, investment director at AJ Bell, said another leg up in oil prices has added to the market worries about sticky inflation, thereby stoking fears that interest rates will stay higher for longer.
“The market is worried that supplies of oil are going to be tight and if prices keep going, it is going to cause a real headache for businesses and consumers.”
888 (888.L)
Shares in Bookmaker 888 plunged 16.11% on Thursday after the company reduced its annual core profit forecast and said third quarter overall revenue is expected to drop 10% to around £400m.
Adjusted core profit margin for the full year is now also forecast to come in lower at 18-19% versus previous guidance for 20%, partly due to customer friendly sports results as well as compliance changes in dotcom markets as regulatory headwinds take their toll.
Russ Mould, investment director at AJ Bell, commented: “To some extent bookies are at the mercy of sporting results but this shouldn’t really derail a diversified gambling business like 888 to the degree it seems to have done in the third quarter.
“The William Hill owner’s profit warning also reflects the impact of regulation as it is forced to do more compliance work, slowing down customer acquisition,” he said.
Mould also noted that, combined with the warning from Ladbrokes owner Entain earlier this week, it’s clear the sector is coming under ever greater regulatory pressure as countries look to reduce the social harm caused by gambling.
“888’s problems go beyond that factor as its takeover of William Hill’s assets in 2021 saddled it with very substantial levels of debt.
“News the one-time directors of GVC (now part of Entain), including its former CEO Kenny Alexander, had taken a stake helped boost a bombed out share price over the summer. Now the really hard work begins and the incoming management team of CEO Per Widerström and CFO Sean Wilkins have a lot to do,” he added.
Peloton (PTON)
Shares in Peloton surged over 15% in the post-market session after the company announced a five-year partnership deal with Lululemon, in which Peloton will provide content for Lululemon’s exercise app and in return, Lululemon will become the main sportswear partner of the at-home bike and treadmill business.
Victoria Scholar, head of investment at Interactive investor, said: “Peloton was a major stay-at-home winner during the pandemic when gyms and exercise classes were out of bounds and consumers stocked up on at-home fitness equipment. However, since the post-pandemic return to economic normality, shares have faced heavy selling pressure with investors struggling to understand where the next wave of demand comes from.
“In a major fall from grace, the stock price has tumbled from its all-time high of $167.42 in January 2021 to just over $5 even after the 15% jump.”
Scholar further noted that the tie-up between Peloton and Lululemon feels like a healthy strategic fit.
“Peloton can gain access to Lululemon’s fitness-engaged customer user base while Lululemon can promote its fashionable and leisure collection via Peloton’s influential instructors. However, while we have seen a bounce in Peloton’s shares, the deal isn’t likely to be enough to allow the shares to revisit its Covid-era hysteria with demand for at-home exercise hardware still in the doldrums.”
Watch: Nike Q1 earnings expectations for Thursday
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