Investing

Earnings Previews: Apple, Robinhood, US Steel, Visa

Companies beating earnings and revenue estimates far outnumber those that missed late Tuesday. The gap narrowed a little among companies reporting before markets opened on Wednesday, but the margin remained more than two to one.

Microsoft beat the revenue estimate by about $1.3 billion and the per-share earnings estimate by nearly 7%, and shares traded higher by around 5% shortly after the opening bell. Texas Instruments beat the earnings estimate by 16% and the revenue estimate by 9%, and it was also trading up by around 5%.

Among companies reporting before the opening bell Wednesday, AT&T beat on both the top and bottom lines, while Boeing missed on both. Both stocks traded higher, however.

We have already previewed four companies reporting results after markets close on Wednesday (Intel, Lam Research, Las Vegas Sands and Tesla), along with previews of four more reporting results before Thursday’s opening bell (Altria, Comcast, McDonald’s and Southwest Airlines).

Here is a look at four firms scheduled to report results late on Thursday.

Apple

Even including a recent slide in its share price, Apple Inc. (NASDAQ: AAPL) has posted a gain of about 15.6% over the past 12 months. For the 2021 calendar year, Apple’s stock rose by nearly 35%. When the company reported fiscal fourth-quarter results last October, it warned that it faced a revenue headwind of about $6 billion in the December quarter related to supply chain issues. That may turn out to have been an optimistic forecast. While investor reaction may be negative initially, Apple’s long-term prospects remain solid.

Of 43 analysts covering Apple, 34 give the stock a rating of Buy or Strong Buy, and another seven rate the shares at Hold. At a recent share price of around $159.80, the upside potential based on a median price target of $184.50 is about 15.5%. At the high price target of $226, the upside potential is more than 41%.

Analysts expect the Dow Jones industrial average component to report first-quarter fiscal 2022 revenue of $118.53 billion. That would be 42.2% higher sequentially and up 6.4% year over year. Adjusted earnings per share (EPS) are expected to come in at $1.89, up 52.2% sequentially and 5.6% higher year over year. For the full fiscal year ending in September, analysts expect the company to report EPS of $5.72, up 2%, on sales of $381.83 billion, up about 4.4%.

Apple stock trades at about 27.9 times expected 2022 EPS, 25.9 times estimated 2022 earnings of $6.16 and 24.5 times estimated 2023 earnings of $6.52 per share. The stock’s 52-week range is $116.21 to $182.94. Apple pays an annual dividend of $0.88 (yield of 0.55%). Total shareholder return for the past 12 months was 12.3%.

Robinhood

Within a week of its initial public offering in late July, shares of Robinhood Markets Inc. (NASDAQ: HOOD) doubled in price. As of Tuesday’s close, the stock traded down more than 62% below its IPO price.

The last Buy rating issued on the stock came in late August. Since then, analysts are keeping their powder dry. An SEC investigation into so-called behavioral prompts may conclude with a recommendation requiring trading app developers like Robinhood to disclose more information to investors, complicating their businesses and opening them up to more legal action.

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