As earnings season winds down, there are still some interesting companies left to report. Many retailers are reporting results for the quarter that ended in January and there are a few tech companies on the schedule as well.
Looking ahead, after markets close today, we are scheduled to receive earnings reports from American Eagle Outfitters, Marvell Technology and Snowflake. Before markets open Thursday, Kroger and Michaels are expected to report results.
Among the stocks that reported after markets closed Tuesday and before they reopened Wednesday morning, discount retailer Dollar Tree managed to beat profit estimates but fell short on revenue. Michaels stock was up around 23% following the company’s agreement to be acquired by private equity firm Apollo Management for $3.3 billion. Apollo also led another acquisition this morning, the $6.25 billion buyout of Las Vegas Sands’ Vegas assets.
After markets close on Thursday we are scheduled to get four earnings reports, followed by one more before markets open on Friday.
Broadcom
On Thursday afternoon, Broadcom Inc. (NASDAQ: AVGO) is scheduled to report results, and the company should have plenty of positive news. The stock gained about 45% in 2020 and has added more than 9% so far this year, even after the big dip in late February.
Analysts are solidly behind the stock, with all but two of 29 firms rating the stock a Buy or Strong Buy. The consensus 12-month price target on the stock is $487.46, less than 2% higher than the current trading price of around $478.00. At the high price target of $580, the potential upside on the stock is around 20%.
The consensus earnings per share (EPS) estimate for the company’s fiscal first quarter of 2021 is $6.55, an increase of around 25% year over year, on a revenue increase of almost 13% to $6.61 billion. For the 2021 fiscal year, current estimates call for EPS of $26.23, up 5% year over year, on sales totaling $26.4 billion, an increase of 10%.
Based on estimated EPS for fiscal 2021, the stock trades at a multiple of 18, while the multiple is around 17 for estimated 2022 earnings and 16 for 2023 EPS.
Costco
Costco Wholesale Corp. (NASDAQ: COST) saw its share price improve by a third in 2020, but shares have dived by more than 13% so far in 2021. It is hard to pinpoint a reason for the decline. The company announced last week that it is raising its starting wage to $16 an hour this month, which should improve its $23.50 hourly average, well above Walmart’s $11 starting pay and $14 average.
A majority (18 of 29) analysts rate the stock a Buy or a Strong Buy, while 11 rate the stock as a Hold. The consensus price target is $400.37, and shares traded Wednesday at around $325. Indicating a potential upside of around 23%. At the high price target of $435, the potential gain on the stock is around 34%.
Analysts are looking for quarterly EPS of $2.45 and sales of $43.8 billion, both double-digit improvements over the same quarter last year. For fiscal 2021, EPS is forecast at $10.13 on sales of $184.1 billion.
At the current price, the stock trades at around 32 times expected 2021 EPS, 30 times expected 2022 earnings and 26 times estimated 2023 EPS.
Gap
In 2020, Gap Inc. (NYSE: GPS) managed to post a share price gain of around 16%, and it has added another 29% to the share price so far in 2021. Gap has set itself on a strategy of reducing store count, especially in shopping malls, where some 350 Gap and Banana Republic stores will be closed by 2023, and pushing hard on its Athleta and Old Navy brands.
Of 27 analyst ratings, 19 are Hold and just five are Buy or Strong Buy. Analysts apparently want to see more progress on Gap’s execution of its plan before raising their bets. Shares traded Wednesday at around $25, just under the consensus price target of $26, but 20% below the high target of $30 a share.
For the quarter, analysts are looking for EPS of $0.18 per share ($0.58 in the year-ago quarter) and revenue of $4.66 billion ($4.67 billion a year ago). Estimates for the 2021 fiscal year that ended in January call for a loss per share of $2.18 on sales of $14.04 billion.
At the current share price, the stock traded at around 20 times expected 2022 EPS and 13 times estimated 2023 EPS.
Smith & Wesson
The share price gain that Smith & Wesson Brands Inc. (NASDAQ: SWBI) posted in 2020 was nearly 140%, although for 2021 to date the shares have dipped by around 6%. The stock posted its 52-week high in the first week of January but has drifted downward ever since. S&W, along with rival Sturm Ruger, posted solid gains in 2020 thanks to more sales to women and African Americans.
The stock currently trades at around $16.70, well below its consensus price target of $22.40. Using that target price, the potential upside on the stock is around 36%. The potential upside at the high price target of $28 is about 42%. Of five analysts’ ratings, four have the stock as a Buy and one has it as a Hold.
The company spun off its outdoor gear into American Outdoor Brands in August, so revenue figures are not comparable, but still interesting. For S&W’s fiscal third quarter, analysts forecast EPS of $0.76 (up from $0.13 a year ago) and sales of $236.7 million. For fiscal 2021, the EPS estimate is $3.26, up from $0.82 in the prior year, on sales of $929 million, up by 37% year over year.
The stock trades at around five times expected 2021 EPS and 11 times expected 2022 EPS.
Big Lots
Though Big Lots Inc. (NYSE: BIG) had doubled its share price in August of last year, it ended 2020 with a gain of around 57%. So far in 2021, the discount retailer has added another 48% to its stock price. In an update to its fourth-quarter outlook released in mid-January, the company said that same-store sales were up 7.5% to date for the quarter and that sales trends were expected to continue accelerating through the end of the quarter. Big Lots reports results before markets open Friday.
Analysts have been mostly enthusiastic, with 10 of 16 rating the stock a Buy or Strong Buy and the rest have the shares at Hold. The stock currently trades about $13 a share higher than its consensus price target of $55.38 and around $8.50 below its high target of $72. At the price, the potential upside on the stock is around 13%.
For Big Lots’ fiscal fourth quarter, analysts are expecting EPS of $2.50, up 4.6% year over year, and sales of $1.74 billion, up 8.1% over the same period last year. For the 2021 fiscal year that ended in January, EPS is forecast at $7.35, up from $3.67 in the prior year, and sales are forecast to rise 16.5% to $6.2 billion.
At Wednesday’s trading price, the stock traded at about nine times expected 2021 earnings, 11 times expected 2022 EPS and 10 times estimated 2023 EPS.
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