This month is the heart of the current earnings season, and Wednesday is no exception. More than 120 publicly traded companies are scheduled to report earnings this week, with more than 450 issuing results by the end of the week.
We have previews on three major reports scheduled for release Wednesday afternoon and a couple of interesting reports due before markets open Thursday morning.
First up after markets close on Wednesday is eBay Inc. (NASDAQ: EBAY). The company’s stock added about 41% last year and has jumped more than 15% more in 2021. The online auction house and marketplace claims 183 million active buyers and a gross profit margin of 77%. Some of that growth is due to the COVID-19 pandemic, and part is due to new features such as letting sellers advertise their own listings. eBay has also launched its own managed payments feature that could boost revenues and profits going forward.
Since the beginning of the year, Deutsche Bank has downgraded the shares from Buy to Hold and maintained a price target of $59, while Morgan Stanley has maintained an Equal Weight rating and boosted its price target by a dollar to $58.
Analysts expect the company to report fourth-quarter earnings per share (EPS) of $0.83, up nearly 26% year over year, on revenue of $2.7 billion, down about 3% from the prior-year quarter. For the full fiscal year, estimates call for EPS $3.39 on sales of $10.1 billion. Those estimates represent an increase of 48% in EPS and a decline of 5.7% in revenue.
The stock trades at about 17 times expected 2020 EPS and about 16 times expected 2021 earnings. Shares traded down about 0.5% at $58.20 Tuesday morning, in a 52-week range of $26.02 to $61.06. The consensus price target on the stock is $62.71, and eBay pays a dividend yield of 1.13%.
PayPal Holdings Inc. (NASDAQ: PYPL) saw its stock add about 116% in 2020, with shares up about 4% so far in 2021. The company is the largest digital payments platform in the United States, and it has a strong record of sales and earnings growth that was barely dented by the pandemic. Since being spun out of eBay in 2015, the stock has appreciated by more than 565%.
It’s hard to find an analyst that doesn’t have a Buy rating on the stock. Since December, only one of 12 ratings has been Neutral. The company’s Venmo person-to-person payment system and newly created Venmo credit card are likely to contribute to a continuation of PayPal’s success.
Analysts are looking for quarterly EPS of $1.00 on sales of $6.09 billion, increases of 16% and 23%, respectively, over the same period a year ago. Full-year EPS is expected to total $3.80, up 22.5% year over year, and sales are projected to reach $21.4 billion, up nearly 21%.