Investing

Earnings Previews: Broadcom, Costco, Gap, Marvell Technologies

Analysts are stuck in wait-and-see mode, with 18 of 23 putting a Hold rating on the Gap shares and three others rating the stock a Buy. At a share price of around $14.20, the implied upside based on a median price target of $20.00 is nearly 41%. At the high target of $26.50, the implied gain is almost 87%.

Fourth-quarter revenue is forecast to come in at $4.50 billion, up about 14% sequentially and just 1.8% higher year over year. Analysts are forecasting an adjusted loss per share of $0.14, far below per-share earnings of $0.27 in the prior quarter. For the full 2022 fiscal year that ended in January, analysts expect EPS of $1.33, up from a loss per share of $0.56 last year, on sales of $16.65 billion, up 20.6%.

Gap stock trades at 10.7 times expected 2022 EPS, 8.1 times estimated 2023 earnings of $1.76 and 7.0 times estimated 2024 earnings of $2.02 per share. The stock’s 52-week range is $13.12 to $37.63, and Gap pays an annual dividend of $0.24 (yield of 3.36%). Total shareholder return for the past year was negative 43%.

Marvell Technology

Chipmaker Marvell Technology Inc. (NASDAQ: MRVL) has seen its shares appreciate by about 35% over the past 12 months. Shares peaked in early December and have retreated 27% since then. In early January, analysts at Needham named the stock as its top pick in semiconductors, based on the company’s expected long-term growth path. Organic revenue could grow by more than 30% this year and by around 20% next year, according to the analyst.

Analysts are solidly bullish on Marvell stock. Of 31 brokerages covering the shares, 27 have a Buy or Strong Buy rating, and four more rate the stock at Hold. At a share price of around $65.60, the upside potential to a median price target of $100.00 is 52.4%. At the high price target of $120.00, the upside potential is nearly 89%.

For the fourth quarter of fiscal 2022, which ended in January, Marvell’s revenue is forecast to come in at $1.32 billion, up 9.3% sequentially and up more than 65% year over year. Adjusted EPS are forecast at $0.48, up 12.3% sequentially and 65.5% year over year. For the full fiscal year, EPS are forecast at $1.57, up 71%, on sales of $4.44 billion, up nearly 50%.

Marvell stock trades at 41.7 times expected 2022 EPS, 29.2 times estimated 2023 earnings of $2.25 and 22.9 times estimated 2024 earnings of $2.86 per share. The stock’s 52-week range is $37.92 to $93.85, and Marvell pays an annual dividend of $0.24 (yield of 0.37%). Total shareholder return for the past year was 37.6%.

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