Investing

Earnings Previews: Applied Materials, Deere, Palo Alto Networks, Ross Stores

There are not many quarterly earnings reports due out in what’s left of this week. There is just one notable report scheduled for Friday and none before Monday’s opening bell.

On Tuesday, we previewed four companies releasing earnings reports Wednesday afternoon or Thursday morning: Canadian Solar, Cisco Systems, Kohl’s and L Brands. We also have done a wrap-up on several firms that reported results after markets closed Tuesday or before they re-opened Wednesday morning.

This preview looks at three companies reporting quarterly results Thursday afternoon and one more scheduled to release results Friday morning.

Applied Materials

Semiconductor manufacturing equipment maker Applied Materials Inc. (NASDAQ: AMAT) is scheduled to report quarterly results after markets close Thursday. Its stock added about 43% last year, all of it in the final two months. The stock has gained an equal amount so far in 2021. The global shortage of semiconductors is pumping up expectations for Applied Materials and similar stocks. Industry trade association SEMI has estimated that spending on equipment rose by 16% last year and will rise by 15.5% this year and 12.2% in 2022.

Analysts are extremely bullish on the stock, with 20 of 21 rating the shares a Buy or Strong Buy. The recent price of around $123.30 implies an upside potential of nearly 27% to the consensus price target of $156.38. Using the high target of $195, the implied upside is about 58%.

For the company’s fiscal second quarter, analysts are expecting earnings per share (EPS) of $1.51 on sales of $5.4 billion. Full-year EPS is forecast at $6.05, up 45% year over year, on revenue of $21.7 billion, which would be more than 26% higher.

At the current price, the stock trades at a multiple of 17.4 times expected 2021 EPS, 15.8 times estimated 2022 earnings and 15.0 times estimated 2023 earnings. The stock’s 52-week trading range is $53.32 to $146.00. Applied Materials pays an annual dividend of $0.96 (yield of 0.79%), and the average daily trading volume is about 10.6 million shares.

Palo Alto Networks

Cybersecurity platform provider Palo Alto Networks Inc. (NYSE: PANW) saw a share price gain of about 54% in 2020. So far this year, the stock has dipped by more than 5%. Wednesday morning, the company introduced what it called “key innovations” that make it easier for customers to adopt zero trust network security.

Nearly 75% of analysts covering the stock (29 of 41) rate the company a Buy or Strong Buy. At a price of around $337.10, the implied upside at a consensus price target of $443.31 is about 31.5%. At the high target of $565, upside potential is just over 67%.

Palo Alto Networks is expected to report fiscal third-quarter EPS of $1.28 on Thursday afternoon. The consensus revenue estimate is $1.06 billion. Estimates for the full fiscal year call for EPS of $5.88 on revenue of $4.18 billion.

Shares trade at a multiple 42.7 times expected 2021 EPS, 34.5 times estimated 2022 earnings and 27.7 times estimated 2023 earnings. The 52-week trading range is $217.48 to $403.00, and the average daily volume is about 1.1 million shares. Palo Alto Networks does not pay a dividend.