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Earnings Previews: Broadcom, Costco, Gap, Marvell Technologies

U.S. markets continue to track events in Europe and Ukraine, with traders pushing energy higher and everything else lower. Energy stocks continue to trade higher, as crude oil prices continue rising (up about 5% on last look).

Among equities, Salesforce traded up more than 3% following a beat on both the top and bottom lines and mixed guidance. SoFi traded up more than 15%, and Nordstrom soared by 30%, following earnings reports released Tuesday evening. AMC traded higher after hours Tuesday, but the shares were indicated to open lower Wednesday morning.

Abercrombie & Fitch traded down sharply after missing on both the top and bottom lines and issuing only in-line guidance before markets opened on Wednesday. Dollar Tree beat profit estimates but missed on revenue and issued mixed guidance for the quarter and its 2023 fiscal year.

We already have previewed three companies due to report results after markets close Wednesday (Coupang, Snowflake and Splunk) and four scheduled to report first thing Thursday morning (Best Buy, Bilibili, Canadian Natural Resources and Kroger).

Here is a look at four companies scheduled to report quarterly results after markets close on Thursday.

Broadcom

Like most other chipmakers not named Intel, Broadcom Inc. (NASDAQ: AVGO) posted its most recent high in late December. Its stock has added about 25% to its share price over the past 12 months, including a 16% decline since the December high. Last month, Broadcom and Apple won a new trial after a federal appeals court judge tossed out a jury verdict that would have cost the companies $1.1 billion for allegedly infringing Wi-Fi patents held by CalTech. The continuing buildout of 5G connectivity is probably Broadcom’s major strength in fiscal 2022.

Analysts remain strongly bullish on the stock, with 26 of 33 rating the shares at Buy or Strong Buy. The other seven have Hold ratings. At a recent price of around $507.10 per share, the potential upside based on a median price target of $695 is 37%. Based on a high price target of $775, the upside potential is 52.8%.

For Broadcom’s first quarter of fiscal 2022, which ended in January, analysts are looking for revenue of $7.61 billion. That would be up 2.7% sequentially and 14.3% higher year over year. Adjusted earnings per share (EPS) are forecast at $8.13, up 4.1% sequentially and up 23% year over year. For the full fiscal year, current estimates call for EPS of $33.16, up 18.4%, on sales of $30.70 billion, up 11.8%.

Broadcom trades at 17.2 times expected 2022 EPS, 15.7 times estimated 2023 earnings of $35.24 and 14.8 times estimated 2024 earnings of $38.65 per share. The stock’s 52-week range is $419.14 to $677.76. Broadcom pays an annual dividend of $14.90 (yield of 2.88%). Total shareholder return for the past year was 22.2%.

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