Investing

Earnings Previews: Intel, Lam Research, Las Vegas Sands, Tesla

Was Monday afternoon’s sharp rise in equity prices the real thing or just a head fake? Judging by Tuesday morning trading, it appears to be the latter. IBM got a nice bump after reporting a beat on both the top and bottom lines, and the stock traded up by around 2.7% shortly before noon on Tuesday. Steel Dynamics also scored a twin beat, but the stock traded down by 2.2%, even though guidance was strong.

As for companies that reported before markets opened Tuesday, American Express beat both profit and revenue estimates and traded higher by about 9.2%. GE beat on profits but missed on revenue and issued disappointing guidance. The stock got hammered and traded down about 6.5% Tuesday morning.

We already have previewed four more also scheduled to report results after Tuesday’s closing bell (Capital One, Microsoft, Navient and Texas Instruments) and four more reporting before the opening bell on Wednesday (Abbott Labs, AT&T, Boeing and Freeport-McMoRan).

Here is a look at four firms scheduled to report results after markets close on Wednesday.

Intel

Shares of Intel Corp. (NASDAQ: INTC) have struggled since reaching a 12-month high in early April. Since then, the stock is down more than 24% and the 12-month decline is more than 8%. The chipmaking giant needs to figure out a way to regain market share. So far, executive pronouncements to that effect have had little impact. Intel has released an aggressive product roadmap, but its execution will tell the tale.

Of 42 analysts covering the stock, just 11 have a Buy or Strong Buy rating on the stock. There are 22 Hold ratings, and the other nine are Sell or Strong Sell. At a recent price of around $50.70 a share, the implied upside based on a median price target of $55 is about 8.4%. At the high target of $80, the implied upside is 57.8%.

Fourth-quarter revenue is forecast at $18.36 billion, which would be up 1.5% sequentially but down about 8.1% year over year. Adjusted earnings per share (EPS) are forecast at $0.91, down nearly 47% sequentially and 40% lower year over year. For the 2021 fiscal year, Intel is expected to report EPS of $5.29, down 0.3%, on sales of $73.76 billion, down about 5.3%.

Intel stock trades at about 9.6 times expected 2021 EPS, 13.6 times estimated 2022 earnings of $3.75 and 12.9 times estimated 2023 earnings of $3.93 per share. The stock’s 52-week range is $47.87 to $68.49. Intel pays an annual dividend of $1.39 (yield of 2.67%). Total shareholder return over the past year is negative 5.65%.

Lam Research

Semiconductor equipment maker Lam Research Corp. (NASDAQ: LRCX) posted its 12-month high earlier this month. Since then, the stock has dropped about 5% and the 12-month share price gain has been sliced from more than 27% to just over 6%. The sector is still expected to perform well, with announcements of new fabs scheduled for construction over the next 12 to 18 months. A recent pullback in share prices looks like a revaluation move by investors rather than an abandonment.

Of 27 brokerages covering Lam Research, the stock is rated as a Buy or Strong Buy by 17 and at Hold by the other 10. The consensus price target on the stock is $750, and at a recent price of around $589.50, the upside potential is 27.2%. At the high target of $869, the upside potential is about 47.4%.

Second fiscal quarter revenue is forecast at $4.41 billion, up 2.5% sequentially and about 27.4% year over year. Adjusted EPS are forecast at $8.50, up 1.7% sequentially and 40% year over year. For full fiscal 2022, analysts currently expect Lam Research to report EPS of $34.43, up 26.2%, on sales of $17.76 billion, up 21.4%.

Lam Research stock trades at about 17.2 times expected 2022 EPS, 15.9 times estimated 2023 earnings of $37.20 and 14.6 times estimated 2023 earnings of $40.52 per share. The stock’s 52-week range is $481.05 to $731.85. The company pays an annual dividend of $6.00 (yield of 0.99%). Total shareholder return over the past year is 4.8%.

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