Investing

Earnings Previews: Li Auto, Occidental Petroleum, Rocket Companies

Paul Ausick

Published: February 23, 2022 12:36 pm

More than 100 companies reported quarterly results on Tuesday, and there are nearly 600 more reports due out this week. A couple of noteworthy reports were Caesars and TJX. The former missed earnings but beat on revenues, while the latter missed on revenue and offered indifferent guidance.

We already have previewed three firms set to report results after markets close Wednesday: Clover Health, eBay and Skillz. Another five firms are set to report results before markets open Thursday: Alibaba, Discovery, Newmont, Nikola and Norwegian Cruise Lines.

Wednesday morning, we previewed three tech companies reporting results after markets close Thursday: Block, Coinbase and Dell.

Here are previews of two more companies set to report results late on Thursday and one scheduled to report first thing on Friday.

Li Auto

Beijing-based electric vehicle maker Li Auto Inc. (NASDAQ: LI) has been a U.S.-traded company for less than two years. The stock is up by 68% since the July 2020 initial public offering. But from its peak in late November of that year, the shares are down by around 37%. Li Auto reports results before markets open on Friday morning.

Two other China-based EV makers, Xpeng and Nio, are down by 51.6% and 60.6%, respectively, since November of 2020. Tesla, however, is up 42% for the same period. U.S.-based Lucid is up more than 150% since its SPAC IPO in January of last year, and electric pickup truck maker Rivian is down 42% since its IPO last November. The only conclusion we can draw from all this is that EV stocks are not as hot as they once were. That includes Lucid and Tesla, down almost 52% and almost 32%, respectively, since last November.

Only 11 brokerages cover the firm, and all give the stock a Buy or Strong Buy rating. At a recent price of around $27.50 a share, the upside potential based on a median price target of $45 is about 63.6%. At the high price target of $64, the upside potential is 133%.

Fourth-quarter revenue is forecast at $1.56 billion, which would be up 29% sequentially but down 62.4% year over year. Analysts have forecast a loss per share of $0.01, following a per-share profit of $0.34 in the prior quarter and down from EPS of $0.02 in the same quarter last year. For the 2021 fiscal year, current estimates call for a loss per share of $0.02, compared to a loss per share of $0.10 last year, on sales of $4.20 billion, up about 190%.

After the anticipated loss of $0.09 per share in 2021, Li Auto is expected to post EPS of $0.02 in 2022. In 2023, the share price to earnings multiple based on estimated EPS of $0.36 is 75.6. The stock’s 52-week range is $15.98 to $37.45. Li Auto does not pay a dividend. Total shareholder return for the past year is 1.9%.

Occidental Petroleum

Since posting a low in late October of 2020, shares of Occidental Petroleum Corp. (NYSE: OXY) have risen by 335%. That’s how high crude prices can reverse the fortunes of an oil producer that has fallen on tough times. Cash flow from operations topped $3.1 billion in each of the past two quarters. Free cash flow totaled just over $5 billion for those two quarters.

Oxy has managed to shave nearly $5 billion from its net debt total of $36.1 billion in the first quarter of 2021 thanks to all that cash. Investors, however, are still receiving an annual dividend payment of $0.04. Seems like Oxy is going to have to do something about that. The company reports fourth-quarter results after markets close Thursday.

Of 27 brokerages covering the stock, 11 rate the shares a Hold and 13 have a Buy or Strong Buy rating. At a share price of around $38.50, the upside potential based on a median price target of $44 is 14.3%. At the high price target of $60, the upside potential is 55.8%.

Fourth-quarter revenue is forecast at $7.39 billion, up 8.5% sequentially and more than double the year-ago total of $3.35 billion. Adjusted EPS are pegged at $1.10, up 25.9% sequentially and up from a loss per share of $0.78 last year. For full fiscal 2021, analysts expect Oxy to report EPS of $2.19, compared to a loss per share last year of $3.91. Revenue is forecast at $25.9 billion, up more than 59%.

The stock trades at 17.6 times expected 2021 EPS, 11.2 times estimated 2022 earnings of $5.28 and 17.5 times estimated 2023 earnings of $4.30 per share. The stock’s 52-week range is $21.62 to $43.16. Occidental pays an annual dividend of $0.04 (yield of 0.10%). Total shareholder return for the past year is 48.1%.

Rocket Companies

Online mortgage lender and financial services firm Rocket Companies Inc. (NYSE: RKT) has seen its share price tumble by 42% over the past 12 months. From a high of more than $41 a share in early March of 2021, the stock has plunged 71.5%. Rocket reports fourth-quarter results after markets close Thursday.

That poor showing could get worse in the coming months if homeowners stop refinancing their mortgages. After all, it is unlikely that homeowners with a mortgage rate of 3% or lower are going to refinance at a rate above 4%. Refinancing was 85% of Rocket’s loan origination volume in the first nine months of last year, according to BofA Securities.

Of 16 brokerages covering the stock, 11 have a Hold rating and four more have a Buy or Strong Buy rating. At a share price of around $11.30, the upside potential based on a median price target of $16 is 41.6%. At the high price target of $23, the upside potential is just over 103%.

Fourth-quarter revenue is forecast at $2.63 billion, down 16.8% sequentially and 45.0% lower year over year. Adjusted EPS are forecast at $0.37, down 34.9% sequentially and down 67.5% year over year. For full fiscal 2021, analysts expect Rocket to report EPS of $2.28, down 44.4%, on revenue of $12.36 billion, down 24.7%.

Rocket stock trades at 4.9 times expected 2021 EPS, 7.6 times estimated 2022 earnings of $1.48 and 7.2 times estimated 2023 earnings of $1.57 per share. The stock’s 52-week range is $11.25 to $43.00. The low was posted Wednesday morning. Rocket does not pay a dividend. Total shareholder return for the past year is negative 41%.

24/7 Wall St.
4 Tech Stocks Analysts Think Could Roar Higher