All three major U.S. equity indexes posted moderate gains Monday and traded higher Tuesday morning, following a strong report on retail sales for April. Consumers spent more at bars and restaurants and on vehicles, furniture, clothing and electronics during the month. The month-over-month increase came in at 0.9%.
After markets closed on Monday, Take-Two Interactive reported quarterly earnings per share (EPS) that were more than double the consensus estimate, while net bookings (revenue) rose by nearly 8% year over year, even though it missed estimates. The stock traded up 8.5% Tuesday morning.
Shoals Technologies missed on both EPS and revenue estimates, but a 67% increase in backlog and new orders apparently won the day. The stock traded up about 10.5% Tuesday morning.
Home Depot beat the consensus EPS estimate by 10.8% and reported a 3.8% year-over-year increase in revenue. The stock traded up about 1%.
JD.com posted EPS of $2.53, more than 50% higher than analysts had expected. Revenue reached nearly $240 billion, up 18% year over year for the quarter. The stock traded up 3.5% early Tuesday.
Walmart missed analysts’ consensus EPS estimate by more than 10% due to higher supply chain costs and product mix. Revenue was up about 2.4% year over year and beat the consensus estimate by about 2.6%. Shares traded down more than 8%.
We have two previews for companies reporting before U.S. markets open on Wednesday. One looks at what to expect from Lowe’s, Target and TJX while the other covers Analog Devices and ZIM Shipping.
Here is a look at four companies due to report results either Wednesday afternoon or Thursday morning.
24/7 Wall St.Cisco Systems
Networking giant and Dow Jones industrial average component Cisco Systems Inc. (NASDAQ: CSCO) has posted a share price decline of 4.9% over the past 12 months including a drop of more than 22% since late December. For the year to date, Cisco’s share price decline is virtually identical to the decline in the tech sector as a whole. Supply chain issues and component shortages for the company’s switches and routers are expected to limit both EPS and revenue growth. Cisco reports its fiscal third-quarter results after markets close on Wednesday.
Analysts are marginally bullish on Cisco stock, with 13 of 29 having a rating of Buy or Strong Buy and 15 with a Hold rating. At a recent price of around $49.00 a share, the upside potential based on a median price target of $62.50 is 27.6%. At the high price target of $73.00, the upside potential is 50%.
For Cisco’s third quarter of fiscal 2022, analysts are expecting revenue of $13.34 billion, which would be an increase of 4.9% sequentially and up of 4.2% year over year. Adjusted EPS are forecast at $0.86, up 2.6% sequentially and 3.6% higher year over year. For the full fiscal year ending in July, analysts currently estimate EPS of $3.44, up 6.9%, on revenue of $52.83 billion, up about 6%.
Cisco’s stock trades at 14.2 times expected 2022 EPS, 13.1 times estimated 2023 earnings of $3.73 and 12.3 times estimated 2024 earnings of $3.99 per share. The stock’s 52-week range is $47.47 to $64.28. Cisco pays an annual dividend of $1.48 (yield of 3.14%). Total shareholder return over the past year was negative 4.9%.
Kohl’s
Department store operator Kohl’s Corp. (NYSE: KSS) has posted a 12-month share price decrease of more than 21%. The company reports results before markets open on Thursday.
Last week, the company’s shareholders rejected an activist investor’s attempt to replace 10 of 13 Kohl’s board members. The department store continues to review strategic alternatives like being acquired or, perhaps, going through with a sale and lease-back arrangement on some of its stores. The activists were right about one thing: over the past three years, Kohl’s share price has declined by 19% while competitors like Macy’s (up 9%) and Dillard’s (up 450%) have done much better for shareholders.
Of 16 analysts covering the stock, six rate the shares at Buy or Strong Buy and eight have Hold ratings. At a share price of around $47.10, the upside potential based on a median price target of $60.00 is 17.4%. At the high price target of $82.00, the upside potential is about 80.5%.
For the retailer’s first quarter of fiscal 2023, analysts are looking for revenue of $3.69 billion, down 40.8% sequentially but up 0.8% year over year. Adjusted EPS are forecast at $0.70, down 68.0% sequentially and 33.0% year over year. For the full fiscal year ending in January, analysts currently forecast EPS of $7.19, down 1.9%, on sales of $18.92 billion, up 2.4%.
Kohl’s stock trades at 6.5 times expected 2023 EPS, 6.3 times estimated 2024 earnings of $7.51 and 6.7 times estimated 2025 earnings of $7.04 per share. The stock’s 52-week range is $43.67 to $64.80. Kohl’s pays an annual dividend of $1.25 (yield of 4.25%). Total shareholder return over the past year was negative 21.4%.
24/7 Wall St.SQM
Sociedad Química y Minera de Chile S.A. (NYSE: SQM) is a specialty chemicals company that produces a variety of raw materials, including lithium. SQM, as it is commonly known, has added nearly 64% to its share price over the past 12 months. Virtually all the share price gain has been posted since late January. The company has not officially announced a date for its quarterly results, but the report is expected to be released before markets open Thursday.
The company (and virtually every other mining firm in Chile) gave a sigh of relief early this month when the country’s constitutional assembly rejected a proposal that would have given the government exclusive mining rights over a variety of minerals, including lithium.
Of 14 brokerages covering the stock, eight have a Buy or Strong Buy rating and four rate the stock at Hold. At a share price of around $83.40, the stock has outrun its median price target of $79.00. Based on the high price target of $108.00, the upside potential is 29.5%.
First-quarter revenue is forecast at $1.48 billion, up 36.3% sequentially and 180.0% higher year over year. Adjusted EPS are forecast at $1.42, up 33.7% sequentially and more than 450.0% year over year. For full fiscal 2022, analysts expect SQM to report EPS of $6.01, up 213%, on sales of $5.63 billion, up 96.5%.
SQM stock trades at 13.9 times expected 2022 EPS, 14.4 times estimated 2023 earnings of $5.80 and 12.1 times estimated 2024 earnings of $6.89 per share. The stock’s 52-week range is $40.52 to $90.87. The company pays an annual dividend of $0.57 (yield of 2.34%). Total shareholder return over the past year was 63.6%.
Trip.com
Travel services giant Trip.com Group Ltd. (NASDAQ: TCOM) has posted a 12-month share price decline of about 44%. The stock touched a nine-year low of around $14 a share in mid-March following government-imposed lockdowns in some of China’s major cities. The worst of the hit to the share price was over by early April, but the stock has dropped about 15% in the past six weeks. Trip.com is expected to report quarterly results late on Wednesday.
Of 32 brokerages covering the stock, 25 have Buy or Strong Buy rating. Another six have Hold ratings. At a share price of around $21.00, the upside potential based on a median price target of $28.16 is 34.1%. At the high target of $37.55, the upside potential rises to 78.8%.
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