Investing

Earnings Previews: Air Lease, Occidental, Home Depot, Macy's, Palo Alto Networks

Romanista / iStock

Nearly 150 U.S.-listed companies are expected to report quarterly results Monday. We’ve already looked at three expected to report before the opening bell.

Here we look at two companies scheduled to report after Monday’s close and three scheduled to report before Tuesday’s opening bell.
[in-text-ad]

Air Lease

Air Lease Corp. (NYSE: AL) was a victim of last year’s massive drop in air travel, although not nearly to the level of major airlines or planemaker Boeing. Air Lease is one of the three largest aircraft leasing companies in the United States, trailing on AerCap and GE’s GECAS. At the end of 2019, Air Lease owned a fleet of 332 commercial jets, managed another 81, and had placed orders on Boeing and Airbus for an additional 361 new airplanes through 2026.

During the fourth quarter, the company raised $1.5 billion in new senior unsecured notes, half due in 2026 at a fixed rate of 2.875% and the other half due in 2030 at a fixed rate of 3.125%. The company has identified a new opportunity in providing financing for customers hardest hit by the COVID-19 pandemic.

Analysts have forecast earnings per share (EPS) of $0.77 for the fourth quarter and $4.25 for the 2020 fiscal year. That’s a quarterly decline of almost half and a year-over-year decline of around 17%. Revenue for the quarter is forecast to fall by 11% to $486.6 million and by less than 1% for the full year to $2.01 billion.

On Friday morning, shares traded at around $45.40, up more than 5% for the day, in a 52-week range of $8.41 to $46.04. The consensus price target on the stock is $50.25. At the current price, the potential upside on the stock is nearly 11%. The stock trades at about nine times expected 2020 and 2021 EPS. Air Lease pays an annual dividend of $0.64 per share (yield of 1.47%).

Occidental Petroleum

Occidental Petroleum Corp. (NYSE: OXY) also reports results Monday afternoon. The independent oil and gas producer saw its share price dive by nearly 57% in 2020. Since May of 2018, when Oxy agreed to acquire Anadarko for $38 billion in cash and stock, shares are down about 65%. Absent the pandemic, the stock would still be down more than 40%.

The company declared force majeure earlier this week due to freezing conditions in the Permian Basin that have disrupted transportation and deliveries to customers. Oxy was scheduled to report quarterly earnings this past Tuesday but delayed the announcement due to the freezing temperatures in Texas.

Analysts expect a fourth-quarter loss per share of $0.59, nearly double the loss in the same period in 2019. For the full year, the expected loss per share is $3.73 compared with 2019 EPS of $1.45. Revenue is expected to fall by nearly 35% in the quarter and by about 17% for the year.

The stock traded up less than 1% Friday at around $25.30, in a 52-week range of $8.52 to $42.57. The consensus price target on the stock is $21.26. The full-year estimate for the 2021 fiscal year calls for a loss of about $1.23 per share. Oxy pays an annual dividend of $0.04 (yield of 0.15%).


Palo Alto Networks

Palo Alto Networks Inc. (NYSE: PANW) added nearly 54% to its share price last year and has tacked on another 12% so far in 2021. The cybersecurity company earlier this week announced that it will acquire cloud security company Bridgecrew for approximately $156 million in cash. The acquisition gives Palo Alto Networks a foothold in the developer space that Bridgecrew’s product targets. Since the beginning of the year, 13 brokerages have either raised or maintained a Buy rating on the stock and all but one raised their price targets.
[in-text-ad]
Analysts expect the company to report fiscal second-quarter 2021 EPS of $1.43, a year-over-year increase of nearly 17%, on revenue of $985.7 million, up nearly 21% year over year. For the fiscal year ending in July, EPS is forecast at $5.80, up 19% year over year, and revenue is forecast to rise by 21% to $4.12 billion.

Shares traded up more than 1% Friday, at around $395.00, after posting a new 52-week high of $403.00. The 52-week low is $125.47, and the consensus price target is $394.12, with a high target of $515 at Morgan Stanley. Shares trade at around 68 times expected 2021 EPS and 57 times expected 2022 earnings. Palo Alto Networks does not pay a dividend.

Home Depot

Like virtually every other stock, Home Depot Inc. (NYSE: HD) had a down-and-up 2020 before finishing the year nearly 25% higher. Homebound Americans used some of their time to tackle home improvement projects, and the company beat earnings expectations in both the July and October quarters. The Dow Jones industrial’s 2021 fiscal year ended on January 31. The April quarter is traditionally the company’s strongest of the year, as spring ushers in both gardening and more opportunities for sprucing up a home’s exterior.

On Tuesday before markets open, analysts expect EPS of $2.60 for the fourth quarter, up nearly 14% year over year, and full-year EPS of $11.86, up nearly 16% compared to 2019. Revenue for the quarter is tabbed at $30.6 billion (up nearly 19%) and for the year at $130.3 billion (up 18%).

Shares traded nearly flat Friday, at $282.90 in a 52-week range of $140.63 to $292.95, with a price target of $306.99. At the current price, the stock’s implied upside is about 8% to the target. Shares trade at about 24 times expected 2021 earnings and 23 times expected fiscal 2022 EPS. Home Depot pays an annual dividend of $6.00 (yield of 2.14%).

Macy’s

Macy’s Inc. (NYSE: M) had a share price drop of about 31% in 2020 but has gained it all back so far in 2021. Even a plan first announced in February of 2020 to close stores had to be amended early this year to bring the total expected store closures through the end of 2021 to 145 stores. The company operated 775 stores worldwide at the end of 2019.

In the last week of January, Macy’s stock jumped by 23% before giving all that gain back (plus a little more) the next week. With nearly 20% of its float in the hands of short sellers, shares might have been targeted by some of the same people who pushed GameStop shares higher at the same time. The momentary spike almost certainly had nothing to do with the underlying value of the stock.

Analysts expect Macy’s to post EPS of $0.7 for its 2021 fiscal fourth quarter that ended in January. That’s far below the $2.12 per share posted in the same period last year. For the year, profits are forecast to tumble from $2.91 per share to a loss of $2.94. Revenue is forecast down 22% for the quarter and more than 30% for the year.

Shares traded at around $14.80 on Friday, up 3.5% for the day, in a 52-week range of $4.38 to $22.30. The stock trades at about 19 times expected fiscal 2022 EPS.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.