Investing

Earnings Previews: Paychex, Carnival

While earnings season for the quarter just ended doesn’t get underway in earnest until next week, there are still a few earnings coming in for the most recent quarter.

Here are three, including one before markets open Tuesday, one coming Tuesday after markets close, and one before Wednesday’s opening bell.

Paychex

Payroll and benefits outsourcing provider Paychex Inc. (NASDAQ: PAYX) is scheduled to report third fiscal quarter results before markets open Tuesday. The company’s stock dived more than 40% in late March last year but managed to climb back to post a gain of more than 13% for 2020. In 2021, the stock has added another 13.6%. And after a tough year, solid guidance could give investors a solid reason to get behind the stock.

Most analysts have the stock rated as a Hold, with just two rating the stock a Buy and 2 rating the stock a Sell. The consensus price target is $96.14, more than $4.50 below the stock’s current trading price of nearly $101.00. The high target of $110 implies a potential upside of around 9% to today’s price.

Analysts are looking for earnings per share (EPS) of $0.92 on revenue of $1.11 billion for the quarter. That’s down about 5.2% compared with last year’s EPS and 2.9% compared with last year’s revenue. In each of the past two quarters, Paychex has beaten the consensus EPS estimate by a double-digit percentage.

Shares currently trade at around 34x expected 2021 earnings, 32x estimated 2022 EPS, and 29x estimated 2023 earnings. The stock traded up about 2% at $100.76 at last look in a 52-week range of $60.00 to $101.15. The high was posted earlier today.

Carnival

Carnival Corporation and plc (NYSE: CCL) postponed its quarterly report from March 11 until Wednesday morning. The cruise line operator had a miserable 2020 due to the COVID-19 pandemic. Shares dropped about 57% in the year but have managed to tack on more than 30% so far in 2021 on hopes that vaccines and pent-up demand for cruises will get the company back on the right track.

As if to light a fire under the company, nine brokerage firms have a Strong Buy rating on the stock, and another six rate the stock as a Buy. Another nine recommend holding the stock and just one rates the shares at Underperform. Investors not wanting to be late to the party have pushed the shares to more than $28.00, above the consensus price target of $23.87. But it may not be too late for those who believe in the high target of $42.00 which implies a gain of around 42% to the current trading price.

Analysts are looking for a fiscal 2021 fourth-quarter loss per share of $1.54 on revenue of $197.34 million, a decline of nearly 96% in revenue. For the fiscal year, estimates call for a net loss of $4.34 per share and revenue of $4.94 billion.

Shares traded at $28.13 Monday afternoon in a 52-week range of $9.14 to $30.12. At that price, the stock traded at around 150x expected 2022 earnings and 17x expected 2023 earnings. Nearly 42 million shares of Carnival’s stock are traded every day.