After U.S. markets closed on Tuesday, Toll Brothers beat earnings per share (EPS) and revenue estimates. The homebuilder topped the EPS estimate by 31% and revenue rose year over year by 7.7%. Guidance for the company’s full-year deliveries was increased to 9,500 to 9,600 units. Shares traded up about 1.1% shortly after Wednesday’s opening bell.
Urban Outfitters beat the EPS estimate by nearly 24% and the revenue estimate by 1.8%. Revenue was up 7.5% year over year. Same-store sales rose 4.9%. The stock traded up 1.8%.
Before markets opened on Wednesday, Bath & Body Works essentially matched the consensus estimate for revenue and beat the EPS estimate by 30%. Sales fell 3.6% year over year. Shares traded down about 2% early Wednesday.
Foot Locker met Wall Street’s consensus EPS estimate but missed on revenue by about 1%. Sales fell 9.9% year over year, and the company issued downside guidance for fiscal year EPS and revenue. Worse, Foot Locker suspended its dividend payment. The stock was hammered early Wednesday, trading down by about 35%.
Kohl’s posted a quarterly per-share profit that was more than double the consensus estimate, but it missed the revenue estimate by about 2.2%. Sales fell 4.8% year over year. Shares traded up 0.8%.
Peloton reported a per-share loss 70% worse than expected while posting slightly better-than-expected revenue. The company also issued downside guidance for the first quarter of its 2024 fiscal year, citing a decline in its subscription fitness program. Shares traded down more than 21%.
Autodesk, Dollar Tree, Nvidia and Petco are expected to report quarterly results after markets close Wednesday or before they open again on Thursday.
Here is a look at what analysts expect from four firms reporting quarterly results later on Thursday. No notable reports are due out Friday morning.
Affirm
Since posting a 12-month low in late December, shares of payment processor Affirm Holdings Inc. (NASDAQ: AFRM) have risen by more than 55.4%. Even that sharp increase was not enough to overcome the decline the stock suffered last year. Shares still trade down nearly 52% for the past year.
After announcing that it would fire some 500 employees in February, Affirm shares popped, but they have been unable to hold that gain. Shares are down by about a third since then. What the company needs to stop wild swings in its share price is a quarterly report that at least meets expectations. A solid beat would be even better.
Of 18 analysts covering the stock, only four have a Buy or Strong Buy rating, and nine others rate it at Hold. At a recent share price of around $14.00, the implied upside based on a median price target of $14.50 is 3.6%. Based on the high price target of $24.00, the upside potential for the stock is 71.4%.
Analysts expect Affirm to report fiscal fourth-quarter revenue of $406.08 million, which would be up 6.6% sequentially and by 11.5% year over year. They also expect the company to report an adjusted loss per share of $0.68, worse than the prior quarter’s loss of $0.57 per share and the year-ago loss of $0.65 per share. For the full 2023 fiscal year ending in June, Affirm is expected to post a loss per share of $3.03, worse than last year’s loss of $2.51 per share, on revenue of $1.55 billion, up 14.7%.
Affirm is not expected to post a profit in 2023, 2024 or 2025. The enterprise value to sales multiple is expected to be 5.1 in 2023. Based on average estimated sales of $1.92 billion and $2.4 billion for 2024 and 2025, respectively, the multiple is 4.1 for 2024 and 3.3 for 2025. The stock’s 52-week trading range is $8.62 to $31.42. Affirm does not pay a dividend. Total shareholder return for the past year was negative 51.78%.
Gap
Apparel retailer Gap Inc. (NYSE: GPS) has seen its share price drop by about 4.8% over the past 12 months, including a drop of more than 15% for the year to date. The stock put up its 52-week low after reporting April-quarter results, and since then the shares have added 31%. A new CEO, Richard Dickson, moved into the corner office on Tuesday, bringing with him the hope of success similar to his success at Mattel when he is credited with reviving Barbie. Gap needs the same kind of magic.
Analysts continue to be wary of the stock, with 13 of 21 having a Hold rating and just four others rating it at Buy or Strong Buy. At a share price of around $9.50, the upside potential based on a median price target of $10.45 is 10%. At the high target of $23.50, the implied gain is about 1.47%.
Second-quarter fiscal 2024 revenue is forecast to come in at $3.59 billion, up 9.6% sequentially but 7.0% lower year over year. Analysts are forecasting adjusted EPS of $0.10, up from $0.01 in the prior quarter and from $0.08 in the year-ago quarter. For the full fiscal year ending next January, analysts expect EPS of $0.65, up from a loss of $0.40 in fiscal 2023, on sales of $14.93 billion, down 4.4%.
Gap stock trades at 14.8 times expected 2024 EPS, 11.1 times estimated 2025 earnings of $0.86 and 9.8 times estimated 2026 earnings of $0.98 per share. Its 52-week trading range is $7.22 to $15.49. Gap pays an annual dividend of $0.60 (yield of 5.85%), and the total shareholder return for the past year was 1.38%.
24/7 Wall St.Marvell
Chipmaker Marvell Technology Inc. (NASDAQ: MRVL) has seen its share price rise by 17% over the past 12 months. For the year to date, the stock is up nearly 61%, in no small part due to Marvell’s blowout first quarter and the halo provided by AI and Nvidia.
Marvell cited the explosion in AI as a tailwind for the rest of the year, but analysts have not reacted by raising estimates. That gives Marvell a low bar to clear and may make the stock more attractive to investors in the event Nvidia fails to hammer estimates when it reports results after markets close on Wednesday.
Analysts remain solidly bullish on Marvell stock. Of 32 brokerages covering the shares, 29 have a Buy or Strong Buy rating, and the rest rate it at Hold. At a share price of around $60.00, the upside potential to a median price target of $9.25 is 15.4%. At the high price target of $100.00, the upside potential is 66.7%.
For its second quarter of fiscal 2024, Marvell’s revenue is forecast to come in at $1.33 billion, up 0.7% sequentially but down 12.5% year over year. Adjusted EPS are forecast at $0.32, up 4.4% sequentially and 43.9% lower year over year. For the full fiscal year ending next January, EPS are forecast at $1.53, down 27.8%, on sales of $5.51 billion, down 6.9%.
Marvell stock trades at 39.0 times expected 2024 EPS, 25.4 times estimated 2025 earnings of $2.34 and 19.9 times estimated 2026 earnings of $2.99 per share. The 52-week trading range is $33.75 to $67.99, and Marvell pays an annual dividend of $0.24 (yield of 0.42%). Total shareholder return for the past year was 17.63%.
Nordstrom
Department store operator Nordstrom Inc. (NYSE: JWN) has seen its stock price drop by more than 25% over the past 12 months. For the year to date, however, shares are up 6.6%. The less good news is that the stock is down 26% since August 1.
There is no cause specific to Nordstrom to account for such a steep and quick decline. Overall macroeconomic concerns like consumer spending forecasts and costs are amplified somewhat given Nordstrom’s upscale image. Analysts’ expectations have been set a bit high for both earnings and revenue. If Nordstrom can top those estimates, the share price will soar. If it misses, the reverse is easily possible.
Analysts are wary. Of 20 brokerages covering the stock, 11 have a Hold rating and only four have Buy ratings. At a share price of around $17.00, the upside potential based on a median price target of $20.00 is 15%. At the high price target of $40.00, the upside potential is about 135%.
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