Investing

Earnings Previews: Best Buy, Medtronic, Nvidia, Pure Storage

With the Memorial Day holiday coming up, the flood of earnings reports will be slowing to a trickle until a couple of weeks after the June quarter closes.

We also have taken a look at the results of reports from AutoZone, Lordstown Motors and Zymergen, all posted after markets closed Monday or before they opened Tuesday. After markets close Tuesday and before they open Wednesday morning we expect to get reports from Abercrombie, Li Auto, Nordstrom and Zscaler.

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

Nvidia

Graphics chipmaker Nvidia Corp. (NASDAQ: NVDA) was one of 2020’s outstanding performers, posting a share price gain of 122%. 2021 has been a bit bumpier, but the shares are still up nearly 20%. The company declared a 4-for-1 stock split recently in the hopes of ginning up more activity with a share price closer to $150 than $625. The ups and downs of cryptocoin mining have had a big impact on sales, and the company is still seeking regulatory approval for its acquisition of semiconductor designer Arm.

Of 38 brokerages covering the company, 21 rate the stock a Buy or Strong Buy, and 15 have Hold ratings on the shares. At a recent price of around $622, the implied upside based on a consensus price target of $669.16 is 7.6%. At the high target of $800, upside potential is nearly 29%.

Analysts expect first fiscal quarter 2022 earnings per share of $3.28 on sales of $5.4 billion. For the full fiscal year, estimates call for EPS of $13.61 and sales of $22.42 billion.

The stock trades at around 64.0 times expected 2022 EPS and 40.5 times estimated 2023 earnings. The stock’s 52-week range of $319.87 to $648.57, and Nvidia pays an annual dividend of $0.64 (yield of 0.10%). The average daily trading volume is nearly 8.4 million shares.

Pure Storage

Flash storage maker Pure Storage Inc. (NYSE: PSTG) posted a share price gain of just over 32% last year, but it trades down about 17% so far in 2021. That’s good enough for a share price gain of around 11% since January of 2020. Subscription revenue to the company’s Pure-as-a-Service is expected to help boost sales as are more sales of its FlashArray and FlashBlade products.

Analysts are bullish on Pure Storage, with 14 of 20 giving the shares a Buy or Strong Buy rating. At a price of around $18.90, the stock’s implied upside to a consensus price target of $28.33 is nearly 50%. At the high target of $33, upside potential is almost 75%.