It’s been an interesting few months. The pandemic gathered steam in March, and the global economy has been in stasis ever since. No one really knows the ultimate impact of this comprehensive shutdown on company earnings. This is why this earnings season is particularly fascinating.
Here’s a look at the top three stock earnings reports I’m looking forward to in June.
Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY) reports earnings today, June 5. Details haven’t been released as I write this, but I’m sure Brookfield stock investors are eagerly waiting for an update.
Commercial property has been at the epicentre of the ongoing crisis. Retail shops, malls, concert halls, and offices have all been abandoned. As a result, commercial landlords like Brookfield are expecting some of their tenants to go bankrupt while others avoid payment.
For Brookfield stockholders, many of whom count on the “robust” dividend to meet living expenses, this earnings report could be devastating. If the trust decides to mark down some of its assets or cut dividends to match cash flow, the stock price could be hammered further. Brookfield stock is already down 40% from late January.
I’ll be closely watching funds from operation, tenant deferrals, and occupancy ratio. This is likely to be a key earnings report for 2020.
Hexo (TSX:HEXO)(NYSE:HEXO) reports earnings next week on June 11. Hexo has been one of the most popular cannabis stocks on the market, so I have no doubt I won’t be alone in following this earnings release.
Cannabis investors have had some reprieve this month. A number of provinces, including Quebec, Alberta, Ontario, and British Columbia, deemed cannabis retailers “essential businesses.” This means stores remained open during the height of the crisis.
In fact, there are signs that people indulged in alcohol and cannabis consumption a lot more while being stuck at home. As a consequence, Hexo’s quarterly results could actually be better than expected. The stock has nearly doubled in value since late March.
A better-than-expected earnings report next week could boost Hexo stock further. I’ll keep an eye on it.
Canada Goose stock
Canada Goose stock jumped 29% this week in anticipation of the earnings report. The company reported numbers that were better than expected, and the stock now seems undervalued. Canada Goose stock trades at 6.4 times book, 24 times trailing earnings, and 13.18 times EV/EBITDA, which is reasonable considering the growth story.
Another reason I’m confident about Canada Goose stock is its exposure to China. Chinese buyers account for a third of global luxury spending. The company entered the Chinese market last year and is expected to expand further this year. Since China has eased lockdowns, that doesn’t seem like a problem for Canada Goose.
Overall, Canada Goose stock represents great growth prospects at reasonable prices. Just like Brookfield stock, this one is worth adding to your watch list for 2020.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Canada Goose Holdings. The Motley Fool recommends Brookfield Property Partners LP, HEXO., and HEXO.