Investing

Earnings Previews: Adobe, Jabil, Lennar

In another week that is light on earnings reports, the first that we want to preview comes out after markets close Wednesday, and the last two are set to be released Friday morning.

Here’s a look at three firms reporting results after markets close Wednesday or before they open on Thursday.

Adobe

Software maker Adobe Inc. (NASDAQ: ADBE) reports fourth-quarter fiscal 2021 results before markets open on Thursday. Over the past 12 months, the stock has added about 31%, including a drop of about 16% in the last half of September.

Of 31 analysts covering the stock, 26 rate the shares a Buy or Strong Buy, and the other five have a Hold rating on the stock. The stock got dinged Tuesday morning when analysts at J.P. Morgan downgraded it from Overweight to Neutral while maintaining the price target of $680. The firm cited limited upside potential to its price target among the reasons for the downgrade.

At a recent price of around $617.10 a share, the upside potential based on a median price target of $712 is 15.4%. At the high target of $820, the upside potential is almost 33%. At the J.P. Morgan price target of $680, the upside potential is about 10%.

Fourth-quarter revenue is forecast at $4.09 billion, which would be up 3.8% sequentially and 19.5% higher year over year. Adjusted earnings per share (EPS) are forecast at $3.20, up 2.9% sequentially and 13.9% year over year. For the full year that ended in November, analysts are expecting EPS of $12.47, up 23.5%, on sales of $15.76 billion, up 22.5%.

Adobe’s share price to earnings multiple for the 2021 fiscal year is 49.2. For fiscal 2022, the multiple to estimated EPS of $14.25 is 43.1, and for 2023, it is 36.4 times estimated EPS of $16.89. The stock’s 52-week range is $420.78 to $699.54. The company does not pay a dividend. Total shareholder return for the past year was 26.3%.

Jabil

Electronics manufacturer Jabil Inc. (NYSE: JBL) has posted a gain of about 62% in its share price over the past 12 months. The stock has been setting new all-time highs since April, the latest coming last Friday. Jabil serves both the fast-growing electric vehicle and cloud markets and has deepened its relationship with Apple. The company reports first-quarter fiscal 2022 results first thing Thursday morning.

The stock is lightly covered by analysts, but all eight brokerages that do rate the stock a Buy or Strong Buy. At a share price of around $63.75, the upside potential based on a median price target of $70 is 9.8%. At a high price target of $90, the upside potential is 41%.

First-quarter revenue is forecast at $8.28 billion, up 11.7% sequentially and 9.4% higher year over year. Adjusted EPS are forecast at $1.80, up 25% sequentially and 12.5% year over year. For the full fiscal year ending next November, the current estimates call for EPS of $6.36, up 13.3% on sales of $31.53 billion, up 7.7%.

Jabil’s share price to earnings multiple for the fiscal 2022 is 10.0. For fiscal 2023, the multiple to estimated EPS of $7.25 is 9.3, and for 2024, it is 8.5 times estimated EPS of $7.51. The stock’s 52-week range is $40.37 to $65.87. Jabil pays an annual dividend of $0.32 (yield of 0.49%). Total shareholder return for the past year was 59.2%.

Lennar

Homebuilder Lennar Corp. (NYSE: LEN) has seen its share price rise by more than 55% over the past 12 months. Historically low interest rates have pumped up demand for new homes, and even if the Federal Reserve should decide to raise rates sooner instead of later, mortgage rates likely will remain low. Lennar is set to report fiscal fourth-quarter results after markets close Wednesday.

Of 19 analysts covering the stock, 12 have a Buy or Strong Buy rating, and the rest rate the stock at Hold. At a share price of around $111.70, the upside potential to a median price target of $120 is 7.4%. At a high target of $166, the upside potential is nearly 49%.

For the fourth quarter of fiscal 2021, Lennar is expected to report revenue of $8.51 billion, up 18.4% sequentially and almost 25% year over year. Adjusted EPS are pegged at $4.15, up nearly 27% sequentially and more than 47% year over year. For the full fiscal year, EPS are forecast at $12.49, up 59%, on sales of $27.20 billion, up nearly 21%.

Lennar’s share price to earnings multiple for fiscal 2021 is 8.7. For fiscal 2022, the multiple to estimated EPS of $14.72 is 7.4, and for 2024, it is 7.0 times estimated EPS of $15.68. The stock’s 52-week range is $71.52 to $117.54. Lennar pays an annual dividend of $1.00 (yield of 0.86%). Total shareholder return for the past year was 51.1%.