Investing

Earnings Previews: Deere, Livent, Sunrun

Another week of earnings season is coming to a close with some interesting reports due out late Thursday or early Friday morning. As usual, there are no reports scheduled for Friday afternoon, and none are scheduled for Monday, President’s Day, when U.S. markets are closed.

Reports issued late Wednesday included a number of surprise misses, including from Roblox, ViacomCBS and Wynn Resorts.

After markets close Wednesday afternoon, four reports of general interest are due: Albemarle, Applied Materials, Cisco Systems and Pioneer Natural Resources. We also have previewed two reports, Palantir and Walmart, due before markets open on Thursday.

Here is a look at the three firms scheduled to report results after markets close Thursday or before they open again on Friday.

Deere

Heavy equipment maker Deere & Co. (NYSE: DE) has posted a share price gain of more than 25% over the past 12 months. When the stock’s current 12-month low rolls off the board next week, the share price gain will rise to more than 30%. Shares reached an all-time high just a week ago and Deere’s prospects remain solid with the coming release of an autonomous tractor that does not need a driver and can run over a predetermined route as long as there are only a few obstacles to dodge. The company reports results before markets open Friday.

Analysts remain bullish on the stock, with 14 of 24 giving the shares a rating of Buy or Strong Buy and eight more rating the stock at Hold. At the recent price of around $388.30 a share, the upside potential based on a median price target of $425 is about 9.5%. At the high price target of $485, the upside potential is about 24.9%.

For the company’s first quarter of fiscal 2022 that ended in January, analysts expect Deere to report revenue of $8.28 billion, which would be down 19.4% sequentially and 2.9% lower year over year. Adjusted earnings per share (EPS) are expected to come in at $2.24, down 45.5% sequentially and down by 42% year over year. For the full fiscal year, EPS is forecast at $22.21, up 17%, on sales of $47.15 billion, up about 18.7%.

The stock trades at17.5 times expected 2022 EPS, 15.4 times estimated 2023 earnings of $24.24 and 14.4 times estimated 2024 earnings of $26.96 per share. Deere’s 52-week range is $298.54 to $700.34. The company pays an annual dividend of $3.61 (yield of 1.08%). Total shareholder return for the past year was 23.56%.

Livent

Lithium producer Livent Corp. (NYSE: LTHM) has seen its share price rise by more than 10% over the past 12 months. Over the past two years, however, the stock is up by about 133%, and the shares posted their all-time high last November. The stock has dropped by around 25% since then. As we noted in our preview of Albemarle, another lithium producer that will report results after Wednesday’s closing bell, prices for battery-grade lithium are around $62,000 per metric ton, about double where they were a year ago. Livent reports earnings after markets close Thursday.

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