Earnings Previews: Applied Materials, Gap, Palo Alto Networks, Ross Stores

The three major U.S. equity indexes closed higher Tuesday. The Dow Jones industrials ended the day up 0.17%, the S&P 500 closed 0.87% higher and the Nasdaq saw a gain of 1.45%. Nine of 11 sectors closed higher, with communications services up 1.78% and three others (consumer cyclicals, technology and real estate) adding 1.24%. Materials (−0.11%) and health care (−0.07%) lagged.

The monthly report on retail sales came in much hotter than expected, posting its largest gain since February. Overall sales rose 1.3% month over month and increased 0.9% excluding automobiles and gasoline. Thursday and Friday bring data related to new home construction and existing home sales in October. The weekly report on jobless claims is also due Thursday.

The three major indexes traded lower in Wednesday’s premarket session due in part to the chilling effect of the report on retail sales.

Before U.S. markets opened on Wednesday, Target missed consensus estimates for both earnings per share (EPS) and revenue. The company also lowered its fiscal 2022 outlook for both same-store sales and operating margin.

Lowe’s reported profit and revenue above consensus estimates. Third-quarter same-store sales were up 2.2% year over year and 3.0% in the United States. Lowe’s raised fiscal 2023 guidance above analysts’ consensus. Shares traded up about 2.5% in Wednesday’s premarket.

TJX Companies reported mixed results, beating the EPS estimate but missing on revenue. EPS guidance was lowered from a prior range of $3.07 to $3.11 to a new range of $2.93 to $2.97. Shares traded essentially flat in the premarket session.

Zim Integrated Shipping beat consensus estimates on both the top and bottom lines. Shares traded up more than 5% early Wednesday.

Cisco Systems and Nvidia will post results after markets close Wednesday, and before they open again on Thursday, look for Alibaba, Kohl’s, Macy’s and NetEase to report earnings.

Here is a look at four companies on deck to report results after Thursday’s closing bell.

Applied Materials

Shares of semiconductor equipment maker Applied Materials Inc. (NASDAQ: AMAT) have declined by nearly 30% in the past 12 months. From their 52-week high of mid-January, the shares are down by about a third, including a rise of almost 48% since posting a 52-week low in the middle of last month.

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