The three major U.S. equity indexes closed higher on Monday, with the Dow Jones industrials and the S&P 500 up nearly 2%, while the Nasdaq was up 1.6%. Financial sector stocks rose 3.3% after JPMorgan lifted its outlook on net interest income. All 11 sectors closed higher, with consumer staples (the traditional defensive play when markets are lousy) up more than 2%.
After markets closed on Monday, Zoom Video reported a solid beat on first-quarter earnings and an in-line number for revenue. Zoom also raised guidance. Shares traded up more than 6% in Tuesday’s premarket.
Before markets opened on Tuesday, Abercrombie & Fitch missed analysts’ profit estimate and beat the estimate for quarterly revenue. Downside guidance for the current quarter and the fiscal year knocked the stock down nearly 30%.
Best Buy beat the earnings estimate by a penny and also beat on revenue. It lowered fiscal year guidance as well. Shares traded down about 2.5% in Tuesday’s premarket.
Frontline reported an in-line loss per share and hammered revenue estimates. The stock traded up about 5.5%.
NetEase beat estimates on both the top and bottom lines. The stock traded up about 3.6%.
Petco also beat estimates on the top and bottom lines and confirmed previous guidance. Shares traded up about 2.5% in Tuesday’s premarket.
Here is a look at three firms set to report earnings after Wednesday’s closing bell.
Shares of Nvidia Corp. (NASDAQ: NVDA) are up about 13% over the past 12 months, including a slide of 48% from its 52-week high posted in late November. Nvidia has slowed its hiring pace, and analysts expect a big quarter based on the company’s own outlook comments at the end of the prior quarter.
At the Computex computer show in Taipei Monday, Nvidia took the wraps off its Arm-based Grace CPU Superchip and the Grace Hopper CPU+GPU Superchip. The Grace CPU will hit the market early in 2023, and Nvidia claims it will be the fastest processor out there.
Of 44 analysts covering the stock, 35 have a Buy or Strong Buy rating and another eight have Hold ratings. At a recent share price of around $169.00, the upside potential based on a median price target of $330.00 is 95.3%. At the high price target of $410.00, the upside potential is 142.6%.
For its first quarter of fiscal 2023, Nvidia’s revenue is forecast at $8.09 billion, which would be up 5.9% sequentially and 42.9% higher year over year. Adjusted earnings per share (EPS) are forecast at $1.29, down 1.9% sequentially but up 40.2% year over year. For the full fiscal year ending in January, analysts are looking for EPS of $5.63, up 26.9%, on sales of $34.72 billion, up 29%.
Nvidia stock trades at 30.0 times expected 2023 EPS, 25.0 times estimated 2024 earnings of $6.75 and 19.4 times estimated 2025 earnings of $8.69 per share. The stock’s 52-week trading range is $151.76 to $346.47. The company pays an annual dividend of $0.16 (yield of 0.1%). Total shareholder return for the past year was 11.4%.
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