Nestle, Strayer Education Earnings on Tap

 Nestle  (NSRGY), the world's biggest food and drink company, is expected to report upbeat full-year earnings before the market opens Thursday. Shareholders will be paying more attention to its 2011 outlook, amid growing input costs and unfavorable foreign exchange rates. Rival food giant  Unilever  (UL) also said it had been negatively affected by soaring commodities costs.

During the last quarterly earnings report, growth for Nestle--which sells well-known brands like Nescafe, Haagen Dazs, and Nespresso--was mainly driven by healthy demand in the developing markets. "We think Nestle's growth opportunities will be limited to developing and emerging markets, rather than developed countries, where competition is increasing from low-priced brands," Morningstar analyst Philip Gorham wrote  in a recent report. "In the short term, however, emerging economies such as Eastern Europe are likely to offer few growth opportunities as consumers continue to spend cautiously amid an environment of high unemployment."

Compared with Gorham's $53 fair value estimate, Nestle shares look roughly fairly valued at current market prices.

Also reporting Thursday morning is for-profit education provider  Strayer Education  (STRA). Wall Street analysts, on average, expect the company to report earnings per share of $2.64 for the fourth quarter. The company, which reported better-than-expected third-quarter results boosted by an increase in student enrollment, already warned shareholders last month that its winter enrollment dropped 20% on a year-on-year basis.

Accounting for a more conservative enrollment projection, Morningstar analyst Peter Wahlstrom recently  lowered Strayer's fair value estimate to $165 a share from $187, noting, "The recent preannouncement supports our view that the rapid growth experienced over the past decade is not likely to repeat, particularly as Congress and the DoE look to rewrite several industry guidelines."

Wahlstrom expects Strayer to experience "high-single-digit sales growth over the long run, on average, driven by a combination of new campus sites, existing schools, online enrollment, and tuition gains."