Foot Locker To Gain From Strengthened Partnership With Nike: Analyst Forecasts Earnings Recovery Next Year

Each week, Benzinga’s Stock Whisper Index uses a combination of proprietary data and pattern recognition to showcase five stocks that are just under the surface and deserve attention.

Investors are constantly on the hunt for undervalued, under-followed and emerging stocks. With countless methods available to retail traders, the challenge often lies in sifting through the abundance of information to uncover new opportunities and understand why certain stocks should be of interest.

Read Also: EXCLUSIVE: Top 20 Most-Searched Tickers On Benzinga Pro In October 2024 — Where Do Tesla, Nvidia, Apple, DJT Stock Rank?

Here's a look at the Benzinga Stock Whisper Index for the week ending Nov. 22:

Delta Air Lines : Reader interest in Delta comes after the company hosted an investor day in New York. Among the items shared at the investor day were goals of mid-teen operating margins, 10% average annual EPS growth and $3 billion to $5 billion in annual free cash flow over the next three to five years.

Delta could also be seeing interest with the new White House administration being ushered in. Delta CEO Ed Bastian recently said President-elect Donald Trump could provide a "breath of fresh air" for the airline sector after years of "overreach." The Biden administration passed various regulations that protected airline consumers, including automatic refunds after canceled flights and a requirement for airlines to disclose all additional fees and taxes upfront.

Delta also announced it will start serving Shake Shack burgers to first-class passengers on some flights.

The carrier’s shares were down over the past week, but remain up over 50% year-to-date. The Benzinga Pro chart below shows the five-day performance.

The S&P 500 Index today is up +0.26%, the Dow Jones Industrials Index is up +0.57%, and the Nasdaq 100 Index is up +0.04%.

Stocks today are moderately higher, with the S&P 500 and Dow Jones Industrials posting 1-week highs. Positive corporate news today is boosting stocks. Super Micro Computer is up more than +11% to lead gainers in the S&P 500 and Nasdaq 100 after it said it believes it can file its delayed 10-K and 10-Q reports in the period available under Nasdaq rules. Also, Ross Stores is up more than +2% after reporting stronger-than-expected Q3 EPS and raising its 2025 EPS forecast. However, the weakness today in Nvidia and Alphabet is weighing on technology stocks and limiting gains in the Nasdaq 100 Stock Index.

US economic news today was mixed for stocks after the Nov S&P manufacturing and service PMIs increased, but the University of Michigan US Nov consumer sentiment index unexpectedly declined.

The US Nov S&P manufacturing PMI rose +0.3 to a 4-month high of 48.8, slightly weaker than expectations of 48.9. The Nov S&P services PMI rose +2.0 to a 2-1/2 year high of 57.0, better than expectations of no change at 55.0.

The University of Michigan US Nov consumer sentiment index unexpectedly fell -1.2 to 71.8, weaker than expectations of an increase to 73.9.

Today’s rally in global government bond prices supported equity markets after 10-year German bunds climbed to a 1-month high, providing carryover support to T-note prices. T-notes are also climbing after the Wall Street Journal reported that President-elect Trump supports Kevin Warsh as the next Treasury Secretary, who is seen as a bond-friendly pick as Warsh has previously spoken out against high deficits.

Concern about weakness in the Eurozone economy is limiting gains in stocks after the Eurozone Nov S&P PMI unexpectedly contracted and Germany’s Q3 GDP was revised lower. Also, the recent escalation of the Ukraine-Russia conflict is weighing on stocks.

Of the 90% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.5% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 59% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.57%. China's Shanghai Composite Index fell to a 2-1/2 week low and closed down sharply by -3.06%. Japan's Nikkei Stock 225 closed up +0.68%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up +2 ticks. The 10-year T-note yield is down -0.6 bp to 4.416%. Dec T-notes today are slightly higher on carryover support from a rally in European government bonds. T-notes also gained support from a Wall Street Journal report that said President-elect Trump is seen as supporting Kevin Warsh as the next Treasury Secretary. The appointment of Warsh, a former Fed governor known as a hawk who has warned about surging debt burdens, would be seen as a sign of stability and someone who would push back against some of the most extreme policy scenarios Trump has discussed. However, T-notes fell back from their best levels after the US Nov S&P manufacturing and service PMIs increased, signaling economic strength that is hawkish for Fed policy.

European government bond yields today are moving lower. The 10-year German bund yield fell to a 1-month low of 2.235% and is down -4.3 bp to 2.275%. The 10-year UK gilt yield dropped to a 3-week low of 4.363% and is down -3.1 bp to 4.412%.

The Eurozone Nov S&P manufacturing PMI fell -0.8 to 45.2, weaker than expectations of no change at 46.0. Also, the Eurozone Nov S&P composite PMI fell -1.9 to 48.1, weaker than expectations of no change at 50.0 and the steepest pace of contraction in 10 months.

German Q3 GDP was revised downward to +0.1% q/q and -0.3% y/y from the previously reported +0.2% q/q and -0.2% y/y.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 43% for a -50 bp rate cut at the same meeting.

US Stock Movers

Super Micro Computer is up more than +11% to lead gainers in the S&P 500 and Nasdaq 100 after it said it believes it can file its delayed 10-K and 10-Q reports in the period available under Nasdaq rules.

Copart is up more than +8% after reporting Q1 revenue of $1.15 billion, stronger than the consensus for $1.10 billion.

The Gap is up more than +6% after reporting a Q3 operating margin of 9.13%, better than the consensus of 8.17%, and raising its 2025 gross margin estimate to about +220 bps from a previous estimate of about +200 bps.

Elastic NV is up more than +17% after reporting Q2 adjusted EPS of 59 cents, well above the consensus of 38 cents, and raising its 2025 adjusted EPS forecast to $1.68-$1.72 from a previous estimate of $152.$1.56, stronger than the consensus of $1.53.

Deckers Outdoor is up more than +4% after Needham & Co. initiated coverage on the stock with a buy recommendation and a price target of $218.

Ross Stores is up more than +2% after reporting Q3 EPS of $1.48, stronger than the consensus of $1.40, and raising its 2025 EPS forecast to $6.10-$6.17 from a previous forecast of $6.00-$6.13, the midpoint above the consensus of $6.13.

Nike is up more than +2% after Needham & Co. initiated coverage on the stock with a buy recommendation and a price target of $84.

Viking Therapeutics is up more than +1% after B Riley Securities initiated coverage of the stock with a recommendation of buy and a price target of $109.

Pala Alto Networks is down more than -4% to lead losers in the Nasdaq 100 after HSBC downgraded the stock to reduce from hold with a price target of $291.

Intuit is down more than -4% after forecasting Q2 adjusted EPS of $2.55-$2.61, well below the consensus of $3.23.

Nvidia is down more than -2% to lead losers in the Dow Jones Industrials after the company’s forecast for Q4 revenue exceeded estimates by only $400 million, the second consecutive quarter that revenue didn’t exceed estimates by $1 billion or more, suggesting the recent hyper-growth of the stock is fading.

Alphabet is down more than -1%, adding to Thursday’s -4% loss after the US Justice Department proposed major changes to Google, including a forced sale of its Chrome web browser, saying the browser “fortified” the company’s dominance.

Reddit is down more than -7% after Downdetector reported that users are having problems connecting to Reddit’s website.

Tenet Healthcare is down more than -3% after Raymond James downgraded the stock to outperform from a strong buy.

HCA Healthcare is down more than -1% after Raymond James downgraded the stock to market perform from outperform.

Earnings Reports (11/22/2024)

AMMO Inc (POWW), B Riley Financial Inc (RILY), Buckle Inc/The (BKE), Destination XL Group Inc (DXLG), Evolv Technologies Holdings Inc (EVLV), IES Holdings Inc (IESC), Spire Global Inc (SPIR).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

• S&P Futures Tick Lower Ahead of U.S. PMI Data
• Stocks Rise Before the Open With U.S. Economic Data in Focus, Nvidia Slips on Disappointing Forecast
• Nasdaq Futures Gain With Focus on Nvidia Earnings
• Stock Index Futures Slip on Worries Over Russia-Ukraine Escalation, U.S. Housing Data and Walmart Earnings on Tap

The performance of a few stocks over the last few months has left a sour taste in investors’ mouths, with popular stocks such as NIKE NKE and Super Micro Computer SMCI unable to gain any meaningful traction.

What’s been impacting shares? Let’s take a closer look at each.

SMCI vs. Hindenburg Research

SMCI shares have been decimated since making their all-time high in mid-March, a stark turnaround after an enormous run to begin the year. Shares faced pressure following a short report from Hindenburg Research accusing the company of accounting manipulation.

The company is a total IT Solution Provider for AI, Cloud, Storage, and 5G/Edge, fully explaining the buzz around the stock in 2024. The company’s reported sales have shot higher, penciling in triple-digit percentage year-over-year growth rates in each of its last three quarters.

SMCI has had an interesting history, with the recent short report not the first time the company has been accused of fraud. In 2018, SMCI was temporarily delisted for failing to file financial statements, and by 2020, was charged $17.5 million by the SEC for “widespread accounting violations.”

The company delayed the filing of its 10-K annual report back in August following the short report, bringing about further scrutiny. However, SMCI recently announced that it’s found another auditor, trying to regain listing compliance.

The news perked shares up a bit, now well above their $17.25 per share 2024 low. It’s critical to note here that shorts have piled into the stock since the report, with the current 18% short interest percentage reflecting a five-year high.

While the recent climb is inspiring, there’s undoubtedly been some short-squeezing.

Overall, too many questions and concerns surround the company currently to confidently state whether the recent plunge is a buyable dip. However, if SMCI’s 10-K clears the hurdles and no more questions arise, it’s reasonable to expect the stock will take off again.

NIKE Fails to Win Over Consumers

NIKE shares faced considerable pressure following the release of its latest quarterly results due to an inability to capture consumers’ wants. Concerning headline figures in the release, EPS fell 25% year-over-year alongside a 10% decline in sales.

The performance on headline numbers jumps out, with the company’s top line primarily remaining stagnant and showing little growth over recent years. Below is a chart illustrating the company’s sales on a quarterly basis.

Sales among the NIKE brand declined 10% year-over-year, with declines seen across all geographies. Wholesales revenues also fell 8%, NIKE Direct revenues fell 13%, and Converse revenues fell 15% year-over-year. Overall, the company’s brand and product offerings haven’t resonated with consumers over recent periods.

Analysts downwardly revised their earnings expectations across the board following the release, landing the stock into an unfavorable Zacks Rank #4 (Sell). The negative outlook here isn’t supportive of bullish price action, with the company’s inability to capture consumers’ wants remaining a thorn in the side.

Bottom Line

Several popular stocks – Super Micro Computer SMCI and NIKE NKE – have faced negative price action over recent months, with each widely underperforming.

Concerning SMCI, the picture remains a bit too cloudy, though a newly-appointed auditor has perked shares back up modestly. It seems like a wait-and-see type of situation for the stock, with just too much unknown out there for investors to take a confident stance on.

NKE’s struggles have primarily been attributed to an inability to capture consumers’ wants, with its offerings not attracting consumers over recent periods. However, a newly-appointed CEO remains positive that the company can turn things around, but does realize it will take some time. The stock’s current Zacks Rank #4 (Sell) ranking alludes to near-term share weakness.

Zacks Investment Research

The S&P 500 Index today is up +0.31%, the Dow Jones Industrials Index is up +0.64%, and the Nasdaq 100 Index is up +0.11%.

Stocks today are moderately higher, with the Dow Jones Industrials posting a 1-week high. Positive corporate news today is boosting stocks. Super Micro Computer is up more than +10% to lead gainers in the S&P 500 and Nasdaq 100 after it said it believes it can file its delayed 10-K and 10-Q reports in the period available under Nasdaq rules. Also, Ross Stores is up more than +4% after reporting stronger-than-expected Q3 EPS and raising its 2025 EPS forecast.

Today’s rally in global government bond prices is supporting equity markets after 10-year German bunds climbed to a 1-month high, providing carryover support to T-note prices. T-notes are also climbing after the Wall Street Journal reported that President-elect Trump supports Kevin Warsh as the next Treasury Secretary, who is seen as a bond-friendly pick as Warsh has previously spoken out against high deficits.

Concern about weakness in the Eurozone economy is limiting gains in stocks after the Eurozone Nov S&P PMI unexpectedly contracted and Germany’s Q3 GDP was revised lower. Also, the recent escalation of the Ukraine-Russia conflict is weighing on stocks.

Of the 90% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.5% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 59% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.31%. China's Shanghai Composite Index fell to a 2-1/2 week low and closed down sharply by -3.06%. Japan's Nikkei Stock 225 closed up +0.68%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up +5 ticks. The 10-year T-note yield is down -1.6 bp to 4.406%. Dec T-notes today are climbing on carryover support from a rally in European government bonds. T-notes also gained support from a Wall Street Journal report that said President-elect Trump is seen as supporting Kevin Warsh as the next Treasury Secretary. The appointment of Warsh, a former Fed governor known as a hawk who has warned about surging debt burdens, would be seen as a sign of stability and someone who would push back against some of the most extreme policy scenarios Trump has discussed.

European government bond yields today are moving lower. The 10-year German bund yield fell to a 1-month low of 2.235% and is down -5.4 bp to 2.264%. The 10-year UK gilt yield dropped to a 3-week low of 4.363% and is down -4.1 bp to 4.401%.

The Eurozone Nov S&P manufacturing PMI fell -0.8 to 45.2, weaker than expectations of no change at 46.0. Also, the Eurozone Nov S&P composite PMI fell -1.9 to 48.1, weaker than expectations of no change at 50.0 and the steepest pace of contraction in 10 months.

German Q3 GDP was revised downward to +0.1% q/q and -0.3% y/y from the previously reported +0.2% q/q and -0.2% y/y.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 45% for a -50 bp rate cut at the same meeting.

US Stock Movers

Super Micro Computer is up more than +10% to lead gainers in the S&P 500 and Nasdaq 100 after it said it believes it can file its delayed 10-K and 10-Q reports in the period available under Nasdaq rules.

Copart is up more than +7% after reporting Q1 revenue of $1.15 billion, stronger than the consensus for $1.10 billion.

The Gap is up more than +8% after reporting Q3 operating margin of 9.13%, better than the consensus of 8.17%, and raising its 2025 gross margin estimate to about +220 bps from a previous estimate of about +200 bps.

Ross Stores is up more than +4% after reporting Q3 EPS of $1.48, stronger than the consensus of $1.40, and raising its 2025 EPS forecast to $6.10-$6.17 from a previous forecast of $6.00-$6.13, the midpoint above the consensus of $6.13.

Elastic NV is up more than +21% after reporting Q2 adjusted EPS of 59 cents, well above the consensus of 38 cents, and raising its 2025 adjusted EPS forecast to $1.68-$1.72 from a previous estimate of $152.$1.56, stronger than the consensus of $1.53.

Nike is up more than +2% to lead gainers in the Dow Jones Industrials after Needham & Co. initiated coverage on the stock with a buy recommendation and a price target of $84.

Viking Therapeutics is up more than +2% after B Riley Securities initiated coverage of the stock with a recommendation of buy and a price target of $109.

NetApp is up more than +1% after reporting Q2 net revenue of $1.66 billion, above the consensus of $1.64 billion, and raising its 2025 net revenue forecast to $6.54 billion-$6.74 billion from a previous forecast of $6.48 billion-$6.68 billion.

Intuit is down more than -3% after forecasting Q2 adjusted EPS of $2.55-$2.61, well below the consensus of $3.23.

Pala Alto Networks is down more than -3% to lead losers in the Nasdaq 100 after HSBC downgraded the stock to reduce from hold with a price target of $291.

Reddit is down more than -7% after Downdetector reported that users are having problems connecting to Reddit’s website.

Nvidia is down more than -1% to lead losers in the Dow Jones Industrials after the company’s forecast for Q4 revenue exceeded estimates by only $400 million, the second consecutive quarter that revenue didn’t exceed estimates by $1 billion or more, suggesting the recent hyper-growth of the stock is fading.

Alphabet is down more than -1%, adding to Thursday’s -4% loss after the US Justice Department proposed major changes to Google, including a forced sale of its Chrome web browser, saying the browser “fortified” the company’s dominance.

Tenet Healthcare is down more than -1% after Raymond James downgraded the stock to outperform from a strong buy.

HCA Healthcare is down more than -1% after Raymond James downgraded the stock to market perform from outperform.

Earnings Reports (11/22/2024)

AMMO Inc (POWW), B Riley Financial Inc (RILY), Buckle Inc/The (BKE), Destination XL Group Inc (DXLG), Evolv Technologies Holdings Inc (EVLV), IES Holdings Inc (IESC), Spire Global Inc (SPIR).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.