Federal Reserve Chair Jerome Powell announced a half-point interest rate hike Wednesday afternoon to a new rate in a range of 0.75% to 1.00%. He also said the Fed is not currently considering a rate increase of 0.75%. It is that last bit that probably lit a fire under investors, who pushed the Dow Jones industrials up 2.81%, the Nasdaq up 3.19% and the S&P 500 up 2.99%. There has been some pullback Thursday morning, with all three indexes down between about 0.4% and 0.6% early on.
After markets closed Wednesday afternoon, lithium miner Albemarle beat the consensus revenue estimate by about 10% and hammered the consensus earnings estimate by 46%. The stock had added about 9.3% in Wednesday’s regular trading session, following a bullish report and outlook from rival Livent. In premarket trading Thursday, Albemarle was up more than 14%.
Independent oil and gas producer APA missed its consensus earnings estimate but did beat the revenue forecast by about 10%. The company also said it was raising its planned capital spending budget by about 8% for the fiscal year. Shares traded down about 2.7%.
ConocoPhillips beat consensus top-line and bottom-line estimates. Full-year oil and gas production is expected to be lower by about 25 million barrels of oil equivalent compared to 2021 production levels. Conoco said it is increasing its operating capital guidance by about 8.3% to $7.8 billion and boosting its shareholder returns program by $2 billion for 2022. Shares traded up about 0.1% Thursday morning.
Uranium miner Cameco reported earnings per share (EPS) of $0.04, while analysts were expecting a per-share loss of $0.04. Revenue fell short of the consensus estimate by about 10%. Shares traded up about 1.5% in the premarket.
Among companies reporting results after markets close Thursday or on Friday morning, we have previewed Block, DraftKings, Lucid and Tyson Foods.
Here is a look at four companies set to report results late Friday or early Monday.
Ballard Power
Over the past 12 months, shares of hydrogen fuel-cell maker Ballard Power Systems Inc. (NASDAQ: BLDP) have declined by almost 55%. Since posting a 20-year high in February of last year, the shares have declined by about 78%. The Canada-based company is scheduled to report results after markets close Friday afternoon.
Ballard and a handful of other alternative energy companies got a short-lived boost following the Russian invasion of Ukraine, but all now trade lower for the year to date, likely because none offers an immediate response to higher gasoline prices nor is a solution at scale on any visible horizon.
Analysts remain cautious on the stock. Thirteen of 23 brokerages have a Hold rating, while nine have a Buy or Strong Buy rating. At a recent price of around $9.20 a share, the upside potential based on a median price target of $13.50 is 46.7%. At the high price target of $35.00, the upside potential is 280%.
Ballard Power is expected to report first-quarter revenue of $24.88 million, which would be down 32.2% sequentially but 41.4% higher year over year. Analysts are forecasting a loss per share of $0.11, better than the prior-quarter loss of $0.15, but $0.05 worse than the loss in the year-ago quarter. For the 2022 fiscal year, analysts anticipate a loss per share of $0.46, worse than the $0.39 per-share loss last year, on sales of $118.01 million, up 12.9%.
The company is not expected to post a profit in either 2022, 2023 or 2024. The stock’s enterprise-value-to-sales multiple for 2022 is 13.8, for 2023 is 9.4 and for 2024 is 6.1. Ballard Power does not pay a dividend, and total shareholder return for the past 12 months is negative 43.6%.
Coty
Beauty products maker Coty Inc. (NYSE: COTY) has seen its stock price fall by more than 24% in the past 12 months. The firm recently announced that it is winding down its Russian business, which accounted for about 3% of its total revenue last year. Coty is set to report earnings first thing Monday morning.
Among the six industries in the consumer staples sector, personal products is the only one to have declined (down 11%) over the past year. For the year to date, the industry is down about 30.5% and Coty is down 26.0%.
Of 14 analysts covering the stock, seven have a Hold rating and the rest rate the shares at Buy or Strong Buy. At a price of around $7.80 per share, the implied gain based on a median price target of $12.00 is 57.7%. At the high price target of $20.00, the upside potential is 156%.
For Coty’s third quarter of fiscal 2022, analysts expect the company to report revenue of $1.15 billion, down 26.9% sequentially but up 11.7% year over year. Adjusted EPS are expected to come in at $0.01, up from a loss per share of $0.09 in the prior quarter and break-even quarter last year. For the full year, analysts currently estimate EPS of $0.27, up 35.5%, on sales of $5.28 billion, up 14.1%.
Shares trade at 28.7 times expected 2022 EPS, 22.2 times estimated 2023 earnings of $0.35 and 18.2 times estimated 2024 earnings of $0.43 per share. The stock’s 52-week range is $7.24 to $11.129, and Coty does not pay a dividend. Total shareholder return for the past year is negative 22.38%.
Lordstown Motors
Electric vehicle maker Lordstown Motors Corp. (NASDAQ: RIDE) is scheduled to report quarterly results before Monday’s opening bell. The share price has dropped more than 77% over the past 12 months, and since the 52-week high set last June, the shares are down more than 84%.
Its Endurance pickup truck was supposed to churn out 30,000 units last year, but the first 500 preproduction units still have not been completed. The sale of an assembly plant to Foxconn has been slowed by contract negotiations with the China-based assembler of Apple’s iPhones. Under a recent agreement with federal regulators, Lordstown has until May 14 to complete the sale. If that fails to happen …
Of seven analysts covering the stock, four have a Sell or Strong Sell rating. The rest have Hold ratings. At a share price of around $2.10, the upside potential based on a median price target of $2.50 is 19%. At the high target of $4.00, the upside potential is 90.1%.
Analysts do not expect Lordstown to post any revenue in the first quarter. They also expect a reported loss per share of $0.45, slightly worse than the prior quarter’s loss of $0.42 but better than the year-ago loss per share of $0.72. For the full year, estimates call for a loss per share of $1.84 (last year’s loss was $2.274 per share) and sales of $25.37 million (there were no sales reported in 2020).
Lordstown is not expected to post a profit in 2021, 2022 or 2023. The enterprise-value-to-sales multiple is expected to be 6.6 in 2022. Based on estimated earnings for 2022 and 2023, multiples are 1.2 and 0.3, respectively. The stock’s 52-week range is $1.89 to $15.80, and the low was posted Wednesday. Lordstown does not pay a dividend. Total shareholder return for the past 12 months is negative 76.4%.
Palantir
Over the past 12 months, shares of Palantir Technologies Inc. (NYSE: PLTR) have declined by more than 50%. Since posting a 52-week high in mid-September, shares have declined by nearly 62%. The software industry has put up a share price increase of about 7% for the past 12 months but has declined by around 17.2% for the year to date. As a whole, the tech sector is down 14.6% for the year to date and up 6.6% over the past 12 months. The company reports results early Monday.
Palantir’s strength is its relationship with the U.S. government, which accounts for nearly half the company’s revenue. That also may be the company’s weakness. The U.S. Immigration and Naturalization Service has replaced the company’s platform with a homegrown platform, and there is some concern that other agencies may follow, dashing Palantir’s hopes of becoming the federal government’s data mining operating system.
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