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Earnings Previews: Mattel, Meta Platforms, ServiceNow

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After U.S. markets closed on Monday, Cadence Design beat consensus estimates on both the top and bottom lines. Fiscal year guidance was in line with expectations as well. Investors were clearly hoping for more, as the stock traded down 1.5% shortly after Tuesday’s opening bell.

Cleveland-Cliffs missed Wall Street’s earnings per share (EPS) estimate by a penny while beating the revenue forecast. Still, revenue was down about 5.6% year over year. But shares traded up about 4.8%.

NXP Semiconductors beat top-line and bottom-line estimates. Guidance was in line with expectations, and the stock traded up about 3.7%.

Before markets opened on Tuesday, General Motors beat the consensus EPS and revenue estimates, with revenue up 25% year over year in the quarter. The automaker raised fiscal 2023 EPS guidance from a range of $6.45 to $7.35 to a new range of $7.15 to $8.15. The company also offered long-term guidance, including doubling annual revenue to a range of $275 billion to $315 billion by 2025 and targeting EV production of 1 million annually in North America by the same year. Shares traded down 3.2%.

General Electric beat estimates on both the top and bottom lines and also issued upside guidance for the 2023 fiscal year. EPS guidance rose from a prior range of $1.70 to $2.00 to a new range of $2.10 to $2.30. Shares traded up 5.5%.

GE HealthCare topped EPS and revenue estimates and issued in-line guidance. The stock traded up 1.8%.

Verizon beat the EPS consensus but missed on revenue. Broadband net additions topped 400,000 for the third consecutive quarter, and wireless revenue rose 3.8% year over year. Verizon also affirmed fiscal 2023 EPS guidance of $4.55 to $4.85. Shares traded up 0.6%.

After markets close on Tuesday, Alphabet, Microsoft and Visa are scheduled to release earnings reports. AT&T, Boeing and Coca-Cola are expected to share their results first thing Wednesday morning.


Here is a look at three companies set to report quarterly results after Wednesday’s closing bell.

Mattel

Toy maker and entertainment media company Mattel Inc. (NASDAQ: MAT) has added about 21% to its share price so far in 2023. The magic word, of course, is “Barbie.” Mattel has not revised guidance since its original estimate, but analysts have raised expectations sharply in the past month. The marketing campaign for the “Barbie” movie paid off with a $150 million opening weekend, and that cannot do anything but raise expectations even more. What remains to be seen is whether Mattel now lifts its own estimates.

Of 12 analysts covering the stock, 11 have a Buy or Strong Buy rating, and the other one has a Hold rating. At a recent price of around $21.50 a share, the upside potential based on a median price target of $24.00 is 11.6%. At the high target of $26.00, the upside potential is 20.9%.

Mattel is expected to report second-quarter revenue of $1 billion, which would be up 22.6% sequentially but down by 19.4% year over year. Analysts are forecasting an adjusted loss per share of $0.03, better than the prior quarter’s loss of $0.24 per share and worse than EPS of $0.18 in the year-ago quarter. For the full 2023 fiscal year, consensus estimates call for EPS of $1.16, down 6.8%, on sales of $5.44 billion, essentially flat year over year.

The stock trades at 18.5 times expected 2023 EPS, 14.5 times estimated 2024 earnings of $1.48 and 13.2 times estimated 2025 earnings of $1.64 per share. Its 52-week trading range is $15.36 to $24.38, and Mattel does not pay a dividend. The total shareholder return for the past year was negative 3.92%.

Meta Platforms

Shares of Meta Platforms Inc. (NASDAQ: META) have soared in 2023. The stock is up more than 72% over the past 12 months, and the year-to-date gain is more than 142%. There is no question that firing 21,000 people has contributed both to a sharp cut in expenses and a sharp increase in EPS. Are more job cuts coming? Are other cost-saving measures in the offing? Will Threads, Meta’s Twitter/X killer, rebound? How’s Meta’s AI initiative going? Is advertising picking up again? Inquiring minds want to know.

Of 56 analysts covering the stock, 43 have a Buy or Strong Buy rating and nine have Hold ratings. At a share price of around $292.00, the upside potential based on a median price target of $320.00 is 9.6%. At the high target of $380.00, the upside potential is 30.1%.

Meta is expected to report second-quarter revenue of $31.03 billion, up 8.3% sequentially and by 7.7% year over year. Adjusted EPS are pegged at $2.89, up 31.3% sequentially and by 17.5% year over year. For the full 2023 fiscal year, consensus estimates call for EPS of 11.67, up 35.8%, on sales of $126.82 billion, up 8.8%.

The stock trades at 25.0 times expected 2023 EPS, 20.3 times estimated 2024 earnings of $14.37 and 17.5 times estimated 2025 earnings of $16.68 per share. The 52-week trading range is $88.09 to $318.64. Meta does not pay a dividend, and the total shareholder return for the past year was 72.28%.

ServiceNow

Enterprise cloud-computing software provider ServiceNow Inc. (NYSE: NOW) has seen its stock price rise by more than 29% in the past year and by 49% in 2023. In May, the company announced a partnership with Nvidia to develop generative AI capabilities to add more horsepower to ServiceNow’s workflow automation solutions. The potential for developing specialized AI-powered applications promises to be a big, if not the biggest, arena for generative AI.

Analysts are stoutly bullish on the stock, with 34 of 37 brokerages giving the shares a Buy or Strong Buy rating. The rest rate it at Hold. At a share price of around $578.00, the upside potential based on a median price target of $605.00 is 4.7%. At the high price target of $718.00, the upside potential is 24.2%.


Second-quarter revenue is forecast at $2.13 billion, up 1.6% sequentially and 21.7% higher year over year. Adjusted EPS are pegged at $2.05, down 13.6% sequentially but up 26.5%year over year. For the full 2023 fiscal year, consensus estimates call for EPS of $9.53, up 25.5%, on revenue of $8.84 billion, up 22%.

ServiceNow stock trades at 60.7 times expected 2023 EPS, 48.6 times estimated 2024 earnings of $11.89 and 39.2 times estimated 2025 earnings of $14.75 per share. The 52-week trading range is $337.00 to $614.36. The company does not pay a dividend, and the total shareholder return for the past year was 29.38%.

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