Investing

Earnings Previews: HP,  Sea Limited, Target, Zoom

More than 400 companies are scheduled to report quarterly results in the week of February 28. By coincidence or otherwise, five electric vehicle-related firms will be out with results before markets open on Monday: Blink, Canoo, Lucid, Luminar and Velodyne Lidar.

On Saturday, Warren Buffett is scheduled to release his letter to Berkshire Hathaway shareholders and we’ll take look on Monday at what he had to say about the year just past and the year to come.

Here are previews of four companies set to report results after markets close on Monday.

HP

Personal computer and printer maker HP Inc. (NYSE: HPQ) has added more than 25% to its share price over the past 12 months. The company generated more than $2.8 billion in operating cash flow in its fourth quarter of fiscal 2021. Free cash flow totaled nearly $2.7 billion, and the company reported $4.3 billion in cash and equivalents. Did the company handle logistics challenges in the first quarter of fiscal 2022, and did demand continue to be strong? We are about to find out.

Analysts have been cautious on the stock. Of 18 brokerages covering the company, eight have rated the stock at Hold while six have a Buy rating and four rate the stock at Strong Sell. At a recent price of around $34.40 a share, the upside potential based on a median price target of $36.00 is 4.6%. At the high price target of $50, the upside potential is more than 45%.

Revenue in the first quarter of fiscal 2022 is forecast to come in at $16.52 billion, which would be up less than 1% sequentially and 5.6% higher year over year. Adjusted earnings per share (EPS) are forecast at $1.02, up about 8.8% sequentially and 10.9% year over year. For the full 2022 fiscal year, analysts currently forecast EPS of $4.17, up 10.1%, on sales of $65.61 billion, up 3.3%.

HP stock trades at 8.2 times expected 2022 EPS, 7.8 times estimated 2023 earnings of $4.38 and 7.4 times estimated 2024 earnings of $4.61 per share. The stock’s 52-week range is $26.11 to $39.65. HP pays an annual dividend of $0.78 (yield of 2.91%). Total shareholder return for the past year is 25%.

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