The number of March quarter earnings reports we expect to see in the coming week is right around 300. Traditional retailers will be out in force with the first-quarter results, along with an assortment including electric vehicles, online gaming and a sprinkling of tech companies.
There were no reports of note on Friday, so our most recent preview covered Coinbase (which reported Thursday afternoon) and Clover Health and Lordstown Motors, both of which report results before markets open Monday morning. We also have covered four companies that are expected to report quarterly earnings on Monday afternoon: Canoo, ExOne, Fisker and Tencent Music.
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In this preview, we cover five companies reporting results before markets open on Tuesday morning. Two of the five are components of the Dow Jones industrial average.
Home Depot
Home improvement giant Home Depot Inc. (NYSE: HD) is a Dow 30 component that plunged about 30% in late March last year and still finished the year up nearly 25%. Stay-at-home orders related to the COVID-19 pandemic gave people plenty of time to make those repairs or changes to their living spaces that many had both time and cash to do with no more procrastination. Now that a third of the country’s adults are fully vaccinated and nearly half have gotten at least one dose, will home improvement remain popular?
The answer appears to be positive, as 24 of 33 analyst firms rate Home Depot as a Buy or Strong Buy. The stock currently trades at around $323, about $8 (2.5%) below the consensus price target of $330.69. The implied potential at the high target of $377 is 16.7%.
Analysts expect Home Depot to report first-quarter earnings per share (EPS) of $3.03, up by more than 30% year over year, on revenue of $34.61 billion, or almost 26% higher. For the full fiscal year, EPS is forecast at $12.91, up about 8%, on sales of $136.65 billion, up more than 3% year over year.
At the current trading price, Home Depot stock trades at a multiple of 27.1 times expected 2021 EPS, 25.0 times estimated 2022 EPS and 23.1 times estimated 2023 EPS. The stock’s 52-week range is $232.70 to $345.69, and the average daily trading volume is about 4.9 million shares. Home Depot pays an annual dividend of $6.60 (yield of 2.08%).
Walmart
Like many other retailers, the reopening of the U.S. economy is expected to have a material impact on Walmart Inc. (NYSE: WMT). The other Dow 30 component scheduled to report results before markets open Tuesday, Walmart posted booming comparable-store sales last quarter (up nearly 9%), but no one expects that to be repeated. The question analysts and investors will want to have answered is how the store sees comparable sales now that the economy is getting back on its feet.
Analysts are pretty evenly divided, with 15 of 32 rating the stock a Buy or Strong Buy and 15 putting a Hold rating on the stock. At a price around $139.50, the upside potential at the consensus price target of $159.41 is more than 14%. At the high target of $180, the implied upside is 29%.
For its first fiscal quarter that ended in April, Walmart is expected to report EPS of $1.21, three cents more than a year ago, on sales of $132.09 billion (down less than 1%). For the full 2022 fiscal year ending next January, analysts forecast EPS of $5.41, down from $5.48 a year ago, on sales of $547.96 billion, down about 2%.
Walmart stock trades at a multiple of 25.0 times to expected 2021 EPS, 25.6 times estimated 2022 earnings and 23.7 times estimated 2023 earnings. The stock’s 52-week range $117.01 to $153.66, and the average daily trading volume of 9.5 million shares. Walmart pays an annual dividend of $2.20 (yield of 1.59%).
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