This week proved a busy one for pandemic-related news. To start, the Labor Department on Thursday reported just 310,000 new jobless claims for the week prior, the lowest since mid-March of 2020 and beating estimates. At the same time, new claims for the week prior were revised higher to 345,000.
Also on Thursday, President Joe Biden outlined an aggressive approach to boost vaccinations and mitigate the spread of the delta variant. Steps include mandating companies with more than 100 workers to mandate vaccination or weekly testing, as well as healthcare workers and the majority of federal employees and contractors, including federally employed educators.
Mr. Biden noted in his announcement speech that the mandates would cover roughly 100 million people in total. Currently only 53% of Americans are fully vaccinated, while another 75 to 80 million people remain eligible but have yet to receive their vaccines. Most workers – except those exempted on some religious and disability grounds – will have a 75-day grace period to receive a vaccine before penalties set in.
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Lululemon Athletica, Inc (LULU)
Lululemon Athletica, Inc slipped 1.5% Wednesday to $380.85 per share, closing the session with 2.9 million trades on the docket. But by Thursday’s close, the stock had gained a whopping 10.5%, or almost $40 per share, to close as $420.26. Currently, Lululemon sits $20 over its 22-day price average and up 21% YTD. The retailer trades near 48x forward earnings.
Lululemon is trending this week after the athleticwear retailer released its Q2 2021 earnings results with hefty numbers that put it on track to surpass its 2023 revenue target a full two years. For the quarter, the company boasted $1.45 billion and an adjusted EPS of $1.65, with net income rising to $208.1 million.
The retailer saw North American sales rise 63% YOY and 49% internationally as customers have switched from spending on athleticwear toward more office-appropriate clothing. And as customer spending trends have gravitated toward the company’s “athleisure” wear, including comfortable, stretchy pants, in the return-to-work era, Lululemon’s revenues have gravitated right along with them.
Over the last three fiscal years, Lululemon’s revenue surged 68% from nearly $3.3 billion to over $4.4 billion. In the same period, operating income climbed almost 62% to $812.7 million compared to $705.8 million three years ago. Meanwhile, per-share earnings leapt 75% from $3.61 to $4.50, though return on equity fell from 31.8% to 26.1%.
All told, Lululemon is expected to see around 9% revenue growth over the next 12 months. Our artificial intelligence rates this athleticwear retailer A in Technicals and Growth and B in Low Volatility Momentum and Quality Value.
The Boston Beer Company, Inc (SAM)
The Boston Beer Company, Inc. slipped 0.08% Wednesday to $559.40, closing out the session with almost 310,000 trades to its name. The stock plunged an additional 3.8% by Thursday’s bell, a change of $21, to end more than $60 below its 22-day price average. Currently, Boston Beer trades down 45.9% for the year at 29x forward earnings.
Boston Beer, the parent of popular alcoholic beverage brands Angry Orchard and Samuel Adams, is trending this week after pulling its earnings guidance as the post-pandemic era comes for hard seltzers. The company released a press statement noting that it “expects to incur hard seltzer-related inventory write-offs, shortfall fees payable to 3rd party brewers, and other costs that will be expensed” for the latter half of fiscal 2021.
But over the last few years, Boston Beer Company has seen some impressive growth. Revenue is up 111% in the last three years and 21% in the last fiscal year alone, growing from $996 million to almost $1.74 billion. In the same periods, operating income grew 163% and 19.3%, respectively, from $116.5 million to $256.9 million. Meanwhile, per-share earnings have doubled from $7.82 to $15.53, with return on equity nicking up from 21% to 22.7%.
At this time, The Boston Beer Company is expected to see forward 12-month revenue grow by 3.6%. Our AI rates this beverage company C in Growth and Quality Value and D in Technicals and Low Volatility Momentum.
Nike, Inc (NKE)
Nike, Inc dropped 1.2% on Wednesday, trading 6.6 million shares to close out the session at $160.71. At this time, the stock sits up 13.6% for the year and trades at 37.5x forward earnings, though it’s trending more than $7 below its 22-day price average.
Nike’s stock is trending this week on the back of rival Lululemon’s earnings success and ahead of its own impending Q1 2022 results due on 23 September. Nike’s adjusted Q1 earnings are expected to climb in the ballpark of 17-19% as the company continues to expand its product line and direct-to-consumer shipping options.
And in a bit of good news on the company culture front, Nike joined the trend of companies offering extra vacation to workers to support their mental health as the pandemic drags on. Senior management of global marketing science Matt Marrazzo noted last Friday that Nike’s Beaverton, Oregon headquarters were “powering down” for a full week, with offices in different locations joining suit so employees could “enjoy additional time off to rest and recover.”
Over the last three fiscal years, Nike’s revenue has grown more than $5.4 billion, rising from $39.1 billion to over $44.5 billion. Meanwhile, operating income surged from $4.77 billion to $7.23 billion, with per-share earnings rising 43% from $2.49 to $3.56. Additionally, return on equity saw substantial growth from 42.7% to 55%.
Currently, our artificial intelligence algorithms rate this trending athleticwear giant B in Technicals, Low Volatility Momentum, and Quality Value, and D in Growth.
Under Armour, Inc (UAA)
Under Armour, Inc slid 1.9% on Wednesday, closing out the session at $22.20 per share on the back of 5.25 million trades. The athleticwear company then gained 4.3% in Thursday’s session, sending the stock to $23.15 per share. All told, the stock sits up almost 35% for the year and trades close to 40x forward earnings.
Like Nike, Under Armour appears to be trending this week as one in a suite of athleticwear giants caught up in the wake of Lululemon’s success. The company – which delivered its most recently quarterly report in the first week of August – primarily manufactures and sells athleticwear, footwear, and sports-related accessories. Its revenue streams include wholesalers, distributors, and its own direct-to-consumer sales channels.
For the full year, Under Armour expects to see revenue growth in the low twenty percentage range, driven by greater growth in the international market than its North American market.
Over the last three fiscal years, Under Armour’s revenue slipped from $5.2 billion to $4.47 billion, with operating income bottoming out at $7.5 million compared to $179 million three years prior. But in the same period, per-share earnings surged from 10 cents to $1.41 as return on equity grew nearly ten times to 28.7%.
At this time, Under Armour is expected to see around 2.9% revenue growth in the next year. Our AI rates this trending athleticwear stock B in Technicals, C in Low Volatility Momentum and Quality Value, and F in Growth.
Verizon Communications, Inc (VZ)
Verizon Communications, Inc nicked up 0.16% Wednesday, trading 11.8 million shares to a final price of $54.91. The stock sits within a dollar of its 10- and 22-day price averages, though it sits down around 6.6% for the year. Currently, Verizon trades at 10.3x forward earnings.
Verizon is trending this week after a pair of announcements and news reports have the company making headlines. The first is an announcement from the company regarding its third “green bond” offering, wherein the company raised $1 billion to move from a carbon-heavy business toward its goal of going carbon-net-zero by 2035. The net proceeds of the bond are expected to be allocated “entirely” to renewable energies, including long-term virtual power purchase agreements that support solar and wind plant construction.
The second has to do with the company’s push into 5G as the National Football League and Verizon have teamed up for a “5G partnership” to allow fans to view the season kickoff game from seven live camera angles. The 10-year deal provides 5G mobile technology to teams for player training, venue operations and health guidelines, and team scouting. In return, Verizon will be named an “Official Technology Partner” and the “Official 5G Network of the NFL.”
Over the last three fiscal years, Verizon’s revenue has slipped slightly from $130.86 billion to $128.29 billion. Operating income saw a similar decline from $31.7 billion to $31.4 billion even as per-share earnings rose from $3.76 to $4.30. Meanwhile, ROE fell from 32.3% to 27.8%.
At this time, Verizon is expected to see forward 12-month revenue growth around 0.05%. Our artificial intelligence rates this trending communications giant A in Low Volatility Momentum, B in Growth, C in Quality Value, and D in Technicals.
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