This promises to be a busy week for March-quarter earnings. More than a thousand U.S.-traded firms are scheduled to report results this week, including some of the country’s largest tech and energy firms.
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Before markets opened on Monday, Otis Worldwide beat analysts’ profit estimates while missing on expected revenue. The elevator maker also narrowed its fiscal year earnings per share (EPS) forecast range and lowered its forecast revenue range. Shares were up about 2.3% in premarket trading.
Activision Blizzard missed on EPS and revenue, but Microsoft still has the $95.00 per share offer on the table, so the stock was down just 0.3%. Coca-Cola beat both top-line and bottom-line estimates and left its guidance unchanged. The stock traded up by about 0.8% in the premarket session Monday.
Before markets open on Tuesday, we shall hear from eight companies we already have previewed. ADM, Corning, D.R. Horton and PepsiCo were covered in one story, and General Electric, Raytheon, UPS and Valero in another.
Here is a look at four firms set to report results after markets close Tuesday.
24/7 Wall St.Enphase Energy
Solar energy component maker Enphase Energy Inc. (NASDAQ: ENPH) has seen its share price fall by just 1% over the past year. Between mid-November and late January, however, the stock dropped by 55%. The stock gained most of that loss back by early April, but the shares have sagged since. Enphase issued a blizzard of press releases last week giving anecdotal reports on increased sales of solar energy and battery storage systems. Investors apparently want to hear some numbers before jumping on the stock.
Brokerages are bullish on the stock, with 20 of 28 analysts giving the stock a Buy or Strong Buy rating and the rest rating the stock at Hold. At a recent share price of around $153.60, the implied gain based on a median price target of $227.00 is about 47.8%. At the high target of $290.00, the upside potential is 88.8%.
For the first quarter, analysts have forecast revenue of $433.67 million, which would be up 5.1% sequentially and about 43.7% higher year over year. Adjusted EPS are forecast at $0.69, down 6% sequentially but up 23.2% year over year. For the 2022 fiscal year, analysts estimate EPS at $3.18, up 31.8%, on revenue of $2 billion, up almost 45%.
Enphase’s shares trade at 48.4 times expected 2022 EPS, 36.9 times estimated 2023 earnings of $4.17 and 30.0 times estimated 2024 earnings of $5.13 per share. The stock’s 52-week range is $108.88 to $282.46. Enphase does not pay a dividend. Total shareholder return for the past year was negative 4.5%.
General Motors
General Motors Co. (NYSE: GM) had a tough first quarter. The stock dropped 25%, much worse than the 5% dip in the S&P 500. Shares have dipped another 9% since. Are investors and analysts worried that profits had peaked or are they mad because GM has failed to resurrect its dividend? Over the weekend, Barron’s reported that Alabama’s pension fund dumped nearly 370,000 shares of GM stock and acquired about 1 million shares of Ford stock during the March quarter. The other problems GM faces are rising costs, rising interest rates and the effect of inflation on consumers.
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Analysts like the company’s prospects. Of 23 brokers covering the stock, 19 have a Buy or Strong Buy rating and the other four rate the stock at Hold. At a share price of around $39.80, the upside potential based on a median price target of $70.00 is almost 76%. At the high price target of $95.00, the upside potential is about 139%.
First-quarter revenue is forecast at $37.4 billion, up 11.4% sequentially and 9.0% higher year over year. Adjusted EPS are forecast at $1.67, up 24.1% sequentially and down 25.8% year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $6.74, 4.6% lower, on revenue of $153.83 billion, up 21.1%.
GM stock trades at 5.9 times expected 2022 EPS, 5.7 times estimated 2023 earnings of $7.04 and 5.6 times estimated 2024 earnings of $7.12 per share. The stock’s 52-week range is $37.60 to $67.21. GM does not pay a dividend, and total shareholder return for the past year was negative 29.7%.
24/7 Wall St.QuantumScape
Solid-state lithium-metal battery maker QuantumScape Corp. (NYSE: QS) came public in late November of 2020, and the share price peaked at more than $130 within a month. Since then, the stock has dropped by 88%. Over the past 12 months, the stock is down 53.4%. QuantumScape is not expected to post any sales until next year, and then only $1 million or so. The company’s technology is a step-change for electric vehicles, but QuantumScape needs to work out some technical kinks and scale up production. Those take time and money.
Nine brokerages offer coverage of QuantumScape, and eight have given the shares a Hold rating. The other rating is a Buy. At a share price of around $15.60, the upside potential based on a median price target of $20.00 is 28.2%. At the high price target of $30, the upside potential rises to 92.3%.
Analysts are expecting a loss per share of $0.15 with no revenue. For the full 2022 fiscal year, analysts are expecting a loss per share of $0.68 with no revenue. The less-bad news is that QuantumScape’s balance sheet at the end of the prior quarter showed almost $1.5 billion in cash and short-term investments and negative free cash flow of $255 million for the prior 12 months.
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QuantumScape’s stock trades at 439.6 times its estimated enterprise value to sales in 2024. Six analysts expect sales to reach $12.2 million that year.
Texas Instruments
Chipmaker Texas Instruments Inc. (NASDAQ: TXN) has lost about 6% from its share price over the past 12 months. In 2021, the stock rose by nearly 15%. It is the country’s sixth-largest semiconductor manufacturer by market cap ($160.2 billion) and probably the world’s largest supplier of analog and embedded microprocessors. While these chips are not the most advanced, they are ubiquitous and cheap to make. Revenues grew by nearly 27% year over year in 2021, and gross profit margins were about 67.5%, while EPS growth for the year was 38.4%.
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