Investing

Earnings Previews: Canadian Solar, Cisco Systems, Kohl's, L Brands

The number of March quarter earnings reports we expect to see this week has dipped to around 200. Traditional retailers will be among the most-watched for first-quarter results, along with selected firms in other sectors including electric vehicles, online gaming and a sprinkling of tech companies.

On Monday, we previewed four companies releasing earnings reports Tuesday afternoon or Wednesday morning: JD.com, Lowes, Take-Two, Target and TJX. We also have done a wrap-up on several firms that reported results after markets closed Monday or before they reopened Tuesday morning.

This preview looks at two companies reporting quarterly results Wednesday afternoon and two more scheduled to release results Thursday morning.

Cisco Systems

Network equipment giant Cisco Systems Inc. (NASDAQ: CSCO) reports its fiscal third-quarter results after the closing bell Wednesday. Unlike many other tech companies, the Dow Jones industrial average stock missed out on 2020’s massive share price increases. Cisco’s stock actually lost about 3.5% last year. Revenue is expected to rise this year, and that could put the company back on firmer footing with investors and analysts.

Underscoring that optimism, the number of brokers rating the stock a Hold has dropped from a high of 15 of 27 in March to just eight of 27 in May. All the moves have been higher. The stock trades at around $53 a share, implying an upside potential of 3.3% to the consensus price target of $54.73. At the high target of $65, the implied upside is about 23%.

Consensus estimates for quarterly earnings per share (EPS) and revenue are $0.85 and $12.57 billion, respectively. For the full year, analysts are looking for EPS of $3.24 on revenue of $49.38 billion.

At the current price, the shares at 16.4 times expected 2021 EPS, 15.4 times estimated 2022 earnings and 14.7 times estimated 2023 earnings. The stock’s 52-week trading range is $35.28 to $54.14. Cisco pays an annual dividend of $1.48 (yield of 2.80%), and the average daily trading volume is 20.7 million shares.

L Brands

Retailer L Brands Inc. (NYSE: LB) operates in two segments: Bath & Body Works and Victoria’s Secret. Last week the company announced that it is spinning off Victoria’s Secret into a separate company. At the same time, the company boosted its outlook for its first-quarter results, and some analysts raised their sights for the company, saying the spinoff likely will unlock value for both parts of the company.

Of 30 brokerage firms covering the shares, only eight rate the shares a Buy or Strong Buy, while 19 give the stock a Hold rating. A price of $69.80 per share implies a potential upside of 7.9% at the consensus price target of $75.30. At the high target of $96, upside potential rises to 37.5%.