The Federal Reserve’s Open Market Committee announcement is due out Wednesday afternoon, and Fed watchers are expecting a one-half point rate hike and more details on how the Fed plans to run off its balance sheet. Stocks were trading slightly higher in Wednesday’s premarket session but the major indexes had inched down as of late morning.
After markets closed on Tuesday, lithium miner Livent beat the consensus profit estimate by 50% and revenue rose by more than 56% year over year. Full-year revenue guidance was raised to a range of $755 to $835 million, sharply above the consensus estimate of $585.5 million. The stock price soared by nearly 23% in morning trading Wednesday. Cowen upgraded the stock from Market Perform to Outperform and raised the $25 price target to $33 per share.
Advanced Micro Devices reported first-quarter results that beat the consensus earnings estimate by more than 21% and the revenue estimate by 5.6%. Shares traded up about 2% Wednesday morning.
Airbnb also topped consensus estimates for earnings and revenue and raised fiscal year revenue guidance. The stock traded about 3.5% higher Wednesday morning.
Ride-sharing firm Lyft also beat top-line and bottom-line estimates, but second-quarter revenue guidance was slightly below the consensus estimate. The company announced plans to invest more in the second quarter, and the effect will hit Lyft’s borrowing. Shares were hammered Wednesday morning, trading down about 33.6%. Three brokerages immediately lowered the company’s price target, and one cut its rating from Positive to Neutral.
Starbucks missed the consensus profit estimate by a penny and beat the consensus revenue estimate. The company expects more pressure on results for the rest of the year, but the resumption of share buybacks carried the day. The stock traded up more than 5.8% Wednesday morning.
Barrick Gold reported better-than-expected results on both the top and bottom lines Wednesday morning. The stock traded up about 0.1%.
Albermarle, APA and Cameco were covered in our preview that included Barrick, while previews for ConocoPhillips, Moderna and Uber were included separately.
Here is a look at four companies set to report results on Thursday or Friday.
Block
Block Inc. (NYSE: SQ) will report first-quarter results after markets close on Thursday. Over the past 12 months, the share price has declined by about 58%, with all the decline coming since early November. That was better than the 67% decline in rival PayPal’s shares before the company reported earnings last week and the share price gained around $10.
These payment firms are expected to feel the full near-term force of higher interest rates, rising inflation and reduced consumer spending. Over a longer term, however, Block and PayPal are expected to thrive. Investors also will be interested in what Block has to say about the acquisition of buy-now-pay-later firm Afterpay that closed in January.
Analysts remain strongly bullish on the shares, with 39 of 50 brokerages having a rating of Buy or Strong Buy. Another nine rate the stock at Hold. At a recent price of around $100.90 a share, the upside potential based on a median price target of $175 is 73.4%. At the high price of $310, the upside potential is 207.2%.
First-quarter revenue is forecast at $4.14 billion, which would be up 1.5% sequentially but down 18.2% year over year. Adjusted earnings per share (EPS) are expected to come in at $0.20, down 25% sequentially and 51.2% lower year over year. For the full 2022 fiscal year, estimates call for EPS of $1.17, down 31.5%, on sales of $18.8 billion, up 6.5%.
Square stock trades at 95.3 times expected 2022 EPS, 51.4 times estimated 2023 earnings of $1.95 and 37.1 times estimated 2024 earnings of $2.70 per share. The stock’s 52-week range is $82.72 to $289.23. Square does not pay a dividend. Total shareholder return for the past year was negative 56.7%.
DraftKings
Online sports betting and gambling company DraftKings Inc. (NASDAQ: DKNG) reports first-quarter results first thing Friday morning. Over the past 12 months, the stock has dropped about 73.5% of its value. Since its peak in early September, the stock is down 76.3%.
Shares got a bump on Wednesday after saying that a group of online sports betting groups had gathered enough signatures to legalize online sports betting in California. If enough signatures are verified, the measure could make it onto the November ballot. The state’s Native American tribes oppose the measure and have an alternative on the ballot that would legalize sports betting only in casinos operated on Native American land or horse-racing tracks.
Analysts remain mostly bullish on the stock, with 16 of 28 having a Buy or Strong Buy rating. The rest have a Hold rating. At a share price of around $15.00, the upside potential based on a median price target of $32 is 13.3%. At the high target of $79, the upside potential is more than 400%.
First-quarter revenue is forecast at $412.93 million, down 12.7% sequentially but up about 32.2% year over year. Analysts are forecasting a loss per share of $1.03 in the quarter, compared to a prior quarter loss of $0.79 and a year-ago loss of the same amount. For full fiscal 2022, DraftKings is expected to post a per-share loss of $3.12, better than the $3.69 loss per share in 2021. Sales are forecast to rise 52.7% year over year to $1.98 billion.
DraftKings is not expected to post a profit in either 2022 or 2023. Analysts are forecasting a fiscal 2024 profit of $0.26 per share on estimated sales of $3.34 billion. The stock trades at 2.7 times its enterprise value to 2022 sales. The stock’s 52-week range is $13.06 to $64.58. The company does not pay a dividend, and total shareholder return for the past year was negative 73.4%.
Lucid
Quarterly results from electric vehicle (EV) maker Lucid Group Inc. (NASDAQ: LCID) are expected early Friday. The company came public in late July last year after merging with a special purpose acquisition company. The stock price doubled by mid-November and reached a 52-week high, but it has dropped by 64% since then. The company cutting its production estimate from 20,000 units this year to 12,000 to 14,000 greased the slippery downward slope of the company’s share price.
Shares got a boost last week when the government of Saudi Arabia placed an order for up to 100,000 of the Lucid’s EVs over the next 10 years, with deliveries beginning next year. The Saudi government has a stake in the company, and Lucid plans to build an assembly plant in the kingdom.
Only six analysts cover the stock, with half giving the stock a Buy or Strong Buy rating and two more rating the shares at Hold. At a share price of around $18.90, the upside potential based on a median price target of $45 is 138%. Based on the high target of $50, the upside potential is 165%.
Analysts expect the company to report fiscal 2022 first-quarter revenue of $55.56 million, up 110.5% sequentially. The consensus forecast calls for an adjusted loss of $0.29 per share, just a penny less than the prior quarter’s loss. For the full fiscal year, the loss per share is forecast at $1.14, down from last year’s loss of $5.00 per share, on sales of $1.3 billion, up more than 4,600%.
Lucid is not expected to report a profit in 2022, 2023 or 2024. The company’s enterprise value-to-sales multiple for 2022 is estimated at 21.2. For 2023 it is 7.8, and for 2024 the multiple is 4.6. The stock’s 52-week range is $16.12 to $57.75. Lucid does not pay a dividend. Total shareholder return for the past year is negative 1.15%.
Tyson Foods
A global supplier of beef, chicken, pork and prepared foods, Tyson Foods Inc. (NYSE: TSN) stock has added more than 18% to its value over the past 12 months. For 2022 to date, the shares are up about 4.7%, representing a dip of nearly 50% from the high posted in early February after the company reported record earnings for 2021.
In late February, former Tyson officials went on trial, along with people from other chicken producers, accused of price-fixing. Last week, executives from Tyson and other beef-packing companies appeared before the House Agriculture Committee to answer questions related to anti-competitiveness and pricing practices.
Of 15 analysts covering the stock, six have ratings of Buy or Strong Buy and all the rest rate shares at Hold. At a share price of around $90.80, the implied gain based on a median price target of $100 is 10.1%. At the high price target of $115, the implied gain is 26.7%.
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