The three major U.S. equity indexes closed higher on Thursday as consumer cyclical stocks that have been battered for the past year added 4.9% to lead all sectors. Communications services and tech both gained 2.4%. In premarket trading Friday morning, all three indexes were somewhat higher.
Later in the morning, the U.S. Bureau of Economic Analysis will release its monthly report for April personal consumption expenditures (PCE), the Fed’s favored measure of inflation. Economists are expecting the overall PCE index to rise by 0.3% (it rose 0.9% in March) and core PCE to rise 0.3%, equal to the February and March increases.
After markets closed Thursday afternoon, Costco beat analysts’ consensus estimates for earnings per share (EPS) and revenue. The stock traded down about 2% in Friday’s premarket session.
Dell Technologies also beat on the top and bottom lines and lifted both second-quarter and full-year guidance. Shares traded up about 12% early Friday.
Farfetch missed on both earnings and revenues but guided gross merchandise value growth for the fiscal year to between 5% and 10%. Shares traded up about 2.7%.
Marvell beat both top-line and bottom-line estimates and issued guidance in line with expectations. Shares traded up nearly 5% Friday morning.
Workday missed EPS estimates but beat the revenue forecast. The company expects subscriber revenue growth of 22% this year and guided 2023 revenue slightly higher. The stock traded down more than 8% in Friday’s premarket.
Before markets opened Friday morning, Big Lots reported results that missed on both the top and bottom lines. Shares were down nearly 20% in premarket trading.
Canopy Growth missed estimates for both earnings and revenues. Shares traded down more than 12.5% in Friday’s premarket.
U.S. markets are closed Monday for the Memorial Day holiday. Here is a preview of what to expect from five companies reporting results on Tuesday.
24/7 Wall St.ChargePoint
Electric vehicle charging network provider ChargePoint Holdings Inc. (NYSE: CHPT) has seen its stock price drop by around 49% over the past 12 months. Since its initial public offering in 2021, the stock has dropped more than 60%. Shares had recovered about half that loss before the company announced a secondary offering of convertible debt in April that sent the stock to a 52-week low. The conversion price is more than double the current trading price. ChargePoint reports results after markets close Tuesday.
Analysts remain bullish on ChargePoint stock, with 12 of 17 brokerages having a Buy or Strong Buy rating and the other five rating the stock at Hold. At a recent share price of around $11.80, the stock’s implied upside based on a median price target of $24.00 is about 103.4%. At the high price target of $46.00, the implied upside is 290%.
Revenue is forecast to reach $76.05 million for the first quarter of fiscal 2023, which would be down 5.7% sequentially but up 87.7% year over year. Analysts are expecting a loss per share of $0.18, compared with the prior quarter’s loss of $0.17 per share and equal to the year-ago loss. For the full fiscal year ending in January, ChargePoint is expected to post a loss per share of $0.71, worse than the prior year’s per-share loss of $0.61. Forecast full-year revenue of $462.94 million is up 91% from last year’s actual revenue.
The company is not expected to post a profit in 2023, 2024 and 2025. ChargePoint’s enterprise value-to-sales multiple for 2023 is 8.0, dipping to 5.0 in 2024 and 3.3 in 2025. The stock’s 52-week trading range is $8.50 to $36.86, and the company does not pay a dividend. The total shareholder return for the past year was negative 52.9%.
KE Holdings
KE Holdings Inc. (NYSE: BEKE) is a Beijing-based online real estate brokerage. The share price is down nearly 77% over the past 12 months. Earlier this month, the company completed a listing of its common shares in Hong Kong. Each of the company’s American depositary shares (ADSs) represents three common shares, and the two are fully fungible. KE did not issue new shares or raise any cash from the Hong Kong listing. The company is among those China-based firms that could be delisted in the United States. KE Holdings reports results first thing Tuesday morning.
Of 14 analysts covering the stock, 11 have a Buy or Strong Buy rating. At a share price of around $11.70, the stock’s implied upside based on a median price target of $20.85 is about 78.2%. At the high price target of $24.57, the upside potential is 110%.
Analysts expect KE Holdings to report first-quarter 2022 revenue of $1.77 billion, down 36.9% sequentially and 91.4% lower year over year. The expected adjusted loss per share is $0.05, down from a profit of $1.25 in the year-ago quarter. For the full fiscal year, EPS are forecast at $0.33, up 9.7%, on sales of $11.72 billion, down 7.8% year over year.
KE Holdings stock trades at 35.4 times expected 2022 EPS, 17.9 times estimated 2023 earnings of $0.65 and 14.98 times estimated 2024 earnings of $0.79 per share. The stock’s 52-week range is $7.31 to $54.49, and the company does not pay a dividend. Total shareholder return over the past year is negative 77.1%.
24/7 Wall St.HP
Personal computer and printer maker HP Inc. (NYSE: HPQ) has added about 18.5% to its share price over the past 12 months. The three most recent analysts’ rating actions on the company have all been to lower HP’s rating, and two of the three cut their price targets as well. The overall outlook for PC sales has not been encouraging, although Dell’s solid report may have breathed a bit of optimism into HP investors, who took the stock up more than 2% in Friday’s premarket action. HP reports quarterly results after Tuesday’s closing bell.
Analysts remain cautious on HP stock. Of 18 brokerages covering the company, nine have rated the stock at Hold while just four have a Buy rating. Another four rate the stock at Strong Sell. At a share price of around $37.70, the stock trades above its median price target of $36.00. At the high price target of $50.00, the upside potential is 32.6%.
Revenue in the second quarter of fiscal 2022 is forecast to come in at $17.03 billion, down 4.9% sequentially but 8.8% higher year over year. Adjusted EPS are forecast at $1.10, down 4.5% sequentially and up 19.6% year over year. For the full fiscal year, analysts forecast EPS of $4.26, up 12.5%, on sales of $65.78 billion, up 3.6%.
The stock trades at 8.6 times expected 2022 EPS, 8.3 times estimated 2023 earnings of $4.43 and 7.8 times estimated 2024 earnings of $4.68 per share. The stock’s 52-week range is $26.11 to $41.47. HP pays an annual dividend of $0.83 (yield of 2.72%). Total shareholder return for the past year is 17.4%.
Nordic American Tankers
Nordic American Tankers Ltd. (NYSE: NAT) operates a fleet of 24 oil tankers capable of transporting up to 1 million barrels of crude oil each through the Suez canal. Over the past 12 months, shares are down about 37%, even including a sharp increase following Russia’s invasion of Ukraine. Even though day rates for tankers are expected to be double their levels at the end of the December quarter, Nordic’s utilization rate is only expected to be about 70%. The company reports March-quarter results early Tuesday.
Just five analysts cover the stock, and two have a Buy rating, while the others rate the stock at Hold. At a share price of around $2.20, the upside potential based on a median price target of $2.75 is 25%. At the high target of $5.00, the upside potential is 127%.
For the company’s first quarter of fiscal 2022, analysts expect revenue of $21.93 million, down about 3.1% sequentially and 16.6% higher year over year. The shipper’s adjusted loss per share is expected to be $0.11, compared to a loss per share of $0.12 in the prior quarter and a year-ago loss of $0.16 per share. For the full fiscal year, the adjusted loss is forecast to come in at $0.12 per share, up from a prior-year loss of $0.68 per share, on sales of $149.69 million, up nearly 122%%.
Nordic American stock trades at 24.0 times estimated 2023 EPS of $0.09. The stock’s 52-week range is $1.40 to $3.81. The company pays an annual dividend of $0.05 (yield of 2.26%). Total shareholder return for the past year was negative 38.4%.
Salesforce
Shares of enterprise software maker Salesforce Inc. (NYSE: CRM) have struggled over the past 12 months, particularly since early November. The stock has lost about 29% of its value in the past year and 47.5% of its value since early November. Last week, the Dow Jones industrial said it would slow its hiring pace and put a hold on recruiting from some open positions as it tries to manage its costs lower. Salesforce also has to contend with reduced spending by the large enterprises that are its target customers. The company reports results after markets close Tuesday.
Of 52 analysts covering the stock, 46 have a Buy or Strong Buy rating. The other six rate the shares at Hold. At a share price of around 163.50, the upside potential based on a median price target of $265.00 is 63.1%. At the high price target of $385, the upside potential is 137%.
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