Investing

Earnings Previews: Enphase Energy, General Motors, QuantumScape, Texas Instruments

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.

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%.

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%.

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