Investing

Earnings Previews: Albemarle, Applied Materials, Cisco Systems, Pioneer Natural Resources

More than 500 companies are scheduled to report quarterly earnings this week, with about half due on Wednesday and Thursday. A couple of major players in lithium production are on deck this week, along with a number of independent oil and gas producers.

About halfway through this earnings season, growth stocks have seen a couple of pretty consistent analyst moves. First, guidance trumps results. Specifically, lowered guidance outweighs results that beat expectations.

Second, analysts are lowering price targets on growth stocks while maintaining their ratings. Not too surprising, given the hammering that these stocks have taken so far this year.

We already have previewed earnings for four companies reporting results after markets close on Tuesday (Airbnb, Devon Energy, SolarEdge and ViacomCBS) and three others set to report before markets open on Wednesday (Barrick Gold, Kraft Heinz and Shopify).

Here is a look at four firms scheduled to report results later on Wednesday.

Albemarle

Lithium producer Albemarle Corp. (NYSE: ALB) has added more than 46% to its share price over the past 12 months. The going has been especially smooth since mid-August of last year. Since then, shares have bounced around but currently trade at a virtually identical price. Battery-grade lithium carbonate prices, however,  have traded up by nearly a third in the past month to around $52.50 per kilogram. Since late January, Albemarle’s stock price has increased by 16%. Tight supplies of battery-grade lithium could be the story for the next several months.

Analysts are bullish on Albemarle. Of 23 brokerages covering the stock, 13 have Buy or Strong Buy ratings and seven rate the stock at Hold. At a recent price of around $238.80 a share, the implied gain based on a median price target of $280 is 17.3%. Based on the high price target of $325, the upside potential is 36.1%.

Fourth-quarter revenue is forecast at $889.88 million, which would be up about 7.1% sequentially and 22.2% higher year over year. Adjusted earnings per share (EPS) are forecast at $0.98, down 6.2% sequentially and about 16.2% lower year over year. For the full 2021 fiscal year, analysts expect Albemarle to report EPS of $4.04, down 2%, on sales of $3.33 billion, up about 6.4%.

Albemarle stock trades at 59.4 times expected 2021 EPS, 39.1 times estimated 2022 earnings of $6.14 and 28.9 times estimated 2023 earnings of $11.44 per share. The stock’s 52-week range is $133.82 to $291.48. Albemarle pays an annual dividend of $1.55 (yield of 0.65%). Total shareholder return over the past year was nearly 47%.

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