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.
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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%).
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%.
Facebook is expected to report EPS of $2.37, up almost 39% year over year but down by 36% sequentially. Revenue is expected to come in at $23.67 billion, up 33.5% year over year but down nearly 16% sequentially. For the 2021 fiscal year, Facebook is forecast to post EPS of $11.36 on revenue of $107.85 billion, up 12.6% and 25.5%, respectively, year over year.
At its current price, Facebook stock trades at 26.8 times expected 2021 EPS, 22.3 times estimated 2022 earnings and 18.9 times estimated 2023 earnings. The stock’s 52-week range is $182.56 to $315.88. Facebook does not pay a dividend.
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Qualcomm
Semiconductor maker Qualcomm Inc. (NASDAQ: QCOM) added 77% to its share price in 2020, but it has dropped more than 9% so far in 2021. The company has been pushing hard in the auto industry market, striking deals with Chinese electric vehicle maker Nio and U.S. giant GM to provide technology for autonomous driving. A new mobile platform (Snapdragon 870 5G) was rolled out last quarter and the company continues to release new 5G-compatible systems.
The jury remains out on how Qualcomm will perform going forward. A majority of brokerages (13 of 23) rate the stock a Hold, while the rest have the shares as a Buy or Strong Buy. At a recent trading price of nearly $138, the stock trades about 32% below its consensus price target of $169.66. At the high target of $200, the implied upside in the stock is 45%.
Analysts expect Qualcomm to report EPS for its second fiscal quarter of $1.67, double its level in the year-ago quarter. Revenue is expected to rise by 46.4% year over year to $7.62 billion. For the full 2021 fiscal year, Qualcomm is forecast to post EPS of $7.30, up 74% year over year, on sales of $30.99 billion, a jump of 43% over 2020’s total.
Qualcomm stock trades at 18.7, 16.8 and 16.9 estimated earnings in 2021, 2022 and 2023, respectively. The stock’s 52-week range is $74.09 to $167.94. Qualcomm pays an annual dividend of $2.72 (yield of 1.96%).
Ford
Legacy automaker Ford Motor Co. (NYSE: F) posted a share-price decline of nearly 4% in 2020, but the stock has added more than 40% since the beginning of 2021. A recovering economy pumps up hope for more new car sales. At the same time, a chip shortage likely will cut down on supply, raising profit margins on the cars. However, the long-term hope for Ford and legacy peers like GM, Volkswagen and the rest is that these companies can transition to an electric future.
Sell-side firms overwhelmingly rate Ford stock a Hold (18 of 24 brokerages), with just four giving the shares a Buy rating. The consensus price target on the stock is $12.95, implying an upside potential of around 4.8% at a recent trading price of around $12.40. At the high target of $16 a share, the upside potential on Ford stock is 29%.
Ford is expected to report EPS of $0.21, compared with a loss per share of $0.23 in the year-ago quarter. Sales are expected to rise nearly 3% to $32.23 billion. For the full fiscal year, Ford is forecast to post EPS of $1.19, nearly five times its 2020 total, on sales of $142.09 billion, an increase of 22.6% year over year.
At the current price, shares trade at 10.4 times expected 2021 EPS, as well as 7.6 times for 2022 and 6.7 times for 2023. The stock’s 52-week range is $4.52 to $13.62. Ford has suspended its dividend.
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