Investing

Earnings Previews: Apple, Facebook, Ford, Qualcomm

Continuing our looks at some of the more than 900 publicly traded companies scheduled to report March quarter earnings this week, this installment includes three big tech stocks and one legacy automaker.

Looking ahead to companies reporting earnings after Tuesday’s closing bell, we have previewed Microsoft, Alphabet, AMD and Texas Instruments in a Monday story. Four more, Enphase, Starbucks, Boeing and Shopify, were previewed in a second story posted Monday.

The four companies that are the focus of this story are scheduled to report earnings after markets close on Wednesday.

Apple

Apple Inc. (NASDAQ: AAPL) added 82% to its share price in calendar 2020, but 2021 has been a different story. As of Monday’s closing bell, Apple’s stock was up about 1.6% so far this year, following a sharp drop in investor enthusiasm for tech stocks, especially big tech stocks.

If there’s a reason to be cautious about Apple, it’s that company has set such a high bar that it appears that it would take a miracle for the company to get over it. Short sellers have been piling in as well, indicating that they expect the report to miss by just enough to score a win by betting against the stock.

A total of 31 of 38 brokerages rate the stock as Buy or Strong Buy, and the rest have stock as a Hold. At the recent trading price of around $134.40, the upside potential on the stock is 13% to the consensus target of $145.06. At the high target of $175, the implied upside is 30%.

For the company’s second fiscal quarter, analysts expect earnings per share (EPS) of $0.99 on revenue of $77.35 billion, representing increases of 55% and 33%, respectively, year over year. For the 2021 fiscal year ending in September, Apple is forecast to post $4.46 in EPS and $334.29 billion in revenue.

At its current price, Apple stock trades at 30.3 times expected 2021 EPS, 28.8 times estimated 2022 earnings and 26.7 times estimated 2023 earnings. The stock’s 52-week trading range is $69.55 to $145.09. Apple pays an annual dividend of $0.82 (yield of 0.61%).

Facebook

Shares of Facebook Inc. (NASDAQ: FB) added about a third last year and have tacked on another 11% since the beginning of 2021. Facebook faces a couple of steep hills in the months ahead, but first-quarter results are expected to continue the streak of beating expectations. The stay-at-home orders have kept more people at home and some have been spending more time on Facebook’s social media apps, which in turn has pushed up advertising revenue.

However, Apple’s new iPhone operating system released Monday could crimp Facebook’s revenue going forward, as could more people returning to their pre-pandemic habits that don’t include time on Facebook.

As with Apple, the vast majority of brokerage firms (41 of 44) rate the stock a Buy or Strong Buy. At a price of around $303.25, the stock trades with upside potential of 12.5% to a consensus price target of $341.45. At the high target of $418, the implied upside on the stock is about 38%.