In the first half-hour of trading on Tuesday, the Dow Jones industrials were down 0.58%, the S&P 500 down 0.67% and the Nasdaq 0.62% lower.
After U.S. markets closed on Tuesday, Palo Alto Networks beat estimates on both the top and bottom lines. Guidance was a bit above expectations, and margins are improving. That was enough to push the stock up by around 8% in early trading on Wednesday.
VFC also beat the consensus earnings per share (EPS) and revenue estimates. Guidance was tepid, and the stock traded down about 1.2%.
Before Wednesday’s opening bell, Kohl’s posted positive surprises for both EPS and revenue. Same-store sales decreased, but so did inventory. That helped boost gross margins, but not by enough to embolden the company to raise guidance. Still, investors liked it enough to give the stock a 9% gain in the early going Wednesday.
Xpeng posted a smaller-than-expected loss per share, but revenue came in 46% lower than a year ago and 29% lower than the consensus estimate. Shares traded down 11% early Wednesday.
After markets close on Wednesday, Nvidia reports quarterly results, as do Snowflake and UiPath. Look for the latest results from Best Buy and Dollar Tree Thursday morning.
Here is what analysts are looking for from three companies reporting results after markets close on Thursday and one reporting first thing Friday morning. No notable earnings reports are due later on Friday, and U.S. markets will be closed on Monday.
24/7 Wall St.Costco
Shares of Costco Wholesale Corp. (NASDAQ: COST) have added nearly 13% over the past 12 months, including a year-to-date increase of around 6.2%. In the February quarter, Costco reported net income of $1.47 billion. Membership fee revenue totaled $1.03 billion, or about 70% of net income. The company reported global memberships totaling 123 million at the end of the prior quarter, up from 114.8 million in the same quarter of 2023.
The company has not raised membership fees since 2017, but virtually everyone expects an increase sooner rather than later. Could the company announce a raise when it reports quarterly results late Thursday?
Analysts are solidly bullish on the stock, with 26 of 36 having a Buy or Strong Buy rating. The other 10 rate it at Hold. At a recent price of around $485.00 a share, the upside based on a median price target of $550.00 is 13.4%. At the high price target of $635.00, the upside potential is 30.9%.
Revenue for the third quarter of fiscal 2023 is forecast at $54.58 billion, which would be down 1.2% sequentially but up 3.8% year over year. Adjusted EPS are forecast at $3.31, up 0.4% sequentially and by 4.4% year over year. For the full fiscal year ending in August, current estimates call for EPS of $14.42, up 8.7%, on sales of $242.32 billion, up 6.8%.
Costco stock trades at 33.6 times expected 2023 EPS, 30.9 times estimated 2024 earnings of $15.67 and 28.1 times estimated 2025 earnings of $17.28 per share. Its 52-week trading range is $424.35 to $564.75. The company pays an annual dividend of $4.08 (yield of 0.83%). Total shareholder return for the past year was 13.73%.
Gap
Apparel retailer Gap Inc. (NYSE: GPS) has seen its share price drop by about 26.4% over the past 12 months, including drops of more than 48% over the past six months and nearly 33% for the year to date. The company is expected to post results after markets close on Thursday.
The company said last month that it would fire more than 500 employees in an effort to become a leaner, meaner machine. Like many other apparel retailers, swollen inventories and declining sales and margins have decimated profits. Gap is just tinkering around the edges as it continues searching for a permanent CEO.
Analysts continue to be cautious on the stock, with 14 of 21 having a Hold rating and just three others rating it a Buy or Strong Buy. At a share price of around $7.60, the upside potential based on a median price target of $10.00 is 31.6%. At the high target of $23.50, the implied gain is more than 200%.
First-quarter fiscal 2024 revenue is forecast to come in at $3.28 billion, down 22.6% sequentially and 5.7% lower year over year. Analysts are forecasting a loss per share of $0.16, compared to a loss of $0.75 per share in the prior quarter and a per-share loss of $0.44 in the year-ago quarter. For the full fiscal year ending next January, analysts expect EPS of $0.61, up from a loss of $0.40 in fiscal 2023, on sales of $15.11 billion, down 3.2%.
Gap stock trades at 12.5 times expected 2024 EPS, 8.7 times estimated 2025 earnings of $0.87 and 7.9 times estimated 2026 earnings of $0.96 per share. Its 52-week range is $7.48 to $15.49. Gap pays an annual dividend of $0.60 (yield of 7.71%), and the total shareholder return for the past year was negative 51.60%.
24/7 Wall St.Marvell
Chipmaker Marvell Technology Inc. (NASDAQ: MRVL) has seen its share price drop by about 15% over the past 12 months, and that drop has been cut by more than half thanks to a 35% share price jump so far in 2023. Marvell reports quarterly results after markets close on Thursday.
The company is also following the lead of other chipmakers by searching for ways to reduce its dependence on China-based suppliers. Marvell announced Tuesday that it will build a new design center in Ho Chi Minh City after laying off its entire Chinese R&D operation in March. No word yet if the Chinese government will retaliate as it did with Micron, but that kind of response is probably as close as you can get to a sure thing.
Analysts remain solidly bullish on Marvell stock. Of 32 brokerages covering it, 28 have a Buy or Strong Buy rating, and the rest rate it at Hold. At a share price of around $46.60, the upside potential to a median price target of $54.50 is almost 17%. At the high price target of $100.00, the upside potential is 115%.
For its first quarter of fiscal 2023, Marvell’s revenue is forecast to come in at $1.3 billion, down 8.4% sequentially and by 10.3% year over year. Adjusted EPS are forecast at $0.29, down 36.3% sequentially and by 44.2% year over year. For the full fiscal year ending next January, EPS are forecast at $1.50, down 29.1%, on sales of $5.51 billion, down 7%.
Marvell stock trades at 31.0 times expected 2024 EPS, 20.2 times estimated 2025 earnings of $2.31 and 16.1 times estimated 2026 earnings of $2.90 per share. The 52-week range is $33.75 to $61.50, and Marvell pays an annual dividend of $0.24 (yield of 0.53%). Total shareholder return for the past year was negative 14.59%.
Pinduoduo
PDD Holdings Inc. (NASDAQ: PDD) operates an online marketplace called Temu that is making a play for a piece of the U.S. market and on an e-commerce marketplace in China that matches the country’s farmers and agricultural product wholesalers directly with Chinese consumers. The stock has jumped by more than 53% over the past 12 months, but like Marvell, that increase is less than half as big as it was three months ago. PDD (which changed its name from Pinduoduo in February) reports quarterly results early Friday.
The stock dropped following PDD’s earnings report in mid-March and has been unable to reverse the slide. PDD moved its headquarters from Shanghai to Ireland earlier this month, a tactical play to avoid U.S. restrictions on China-based firms. ByteDance, parent company of TikTok, moved to Dublin earlier this year. There is also the possibility that PDD will seek a separate listing for Temu in the U.S. equity market.
There are 42 analysts covering the stock, and 38 of those have a Buy or Strong Buy rating. The other four rate it at Hold. At a share price of around $62.60, the upside potential based on a median price target of $103.19 is about 63.5%. At the high price target of $138.10, the upside potential is nearly 120%.
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