AutoNation Tops Q4 Earnings Estimates

The Fort Lauderdale-based automotive retailer AutoNation reported better-than-expected earnings and revenue in the fourth quarter, largely driven by robust demand for used vehicles.

U.S. largest automotive retailer reported quarterly adjusted earnings of $5.76​​ per share, beating the Wall Street consensus estimates of $4.96 per share. The company’s revenue climbed nearly 14% to $6.6 billion from a year earlier. That too surpassed the market expectations of $6.4 billion.

Retail gross profit per used vehicle increased 32% from last year’s quarter to $2,063, while retail gross profit per new vehicle increased 132% to $6,450. But retail sales of new vehicles decreased by 20%. The company reported a net income of $387.1 million in its most recent quarter, up from $151.5 million or $1.73 per share a year earlier, Reuters reported.

AutoNation stock traded 1.28% to $108.30 on Friday. The stock fell over 7% so far this year after surging over 67% in 2021.

Analyst Comments

“GPC and AutoNation (AN) both posted Q4 sales and EPS “beats” on ongoing surge in auto spend. GPC saw strong automotive service demand domestically and internationally, with strength carrying into Q1 thus far, as mgmt sees ~MSD% gains on pricing carrying into ’22,” noted Bret Jordan, Equity Analyst at Jefferies.

“Concurrently, AutoNation (AN) posted another record profit as supply shortages and robust demand drove record pricing and margins. We expect similar trends remain through ’22 as personal auto spend remains at record levels.”

AutoNation Stock Price Forecast

Two analysts who offered stock ratings for AutoNation in the last three months forecast the average price in 12 months of $178.50 with a high forecast of $220.00 and a low forecast of $137.00. The average price target represents a 64.52% change from the last price of $108.50. Those two analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price of $103 with a high of $181 under a bull scenario and $57 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the automotive retailer’s stock.

“We are optimistic about the trajectory for new CEO, Mike Manley, previously in various leadership roles at FCA and Stellantis where he demonstrated leadership of highly complex organizations going through transformation changes in scale, scope and technology. Omni-channel strategy unclear and may result in loss of share,” noted Adam Jonas, Equity Analyst at Morgan Stanley.

“For New Vehicles, historically, market share & gross profit per unit have declined. For Used Vehicles, the standalone used car business model was unsuccessful in the late 1990s. The business mix / growth / margins are similar to the other traditional auto dealers, and the stock trades at a discount to its historical average and vs the dealer average.”

Several analysts have also updated their stock outlook. Jefferies cut the target price to $118 from $136. Wells Fargo initiated coverage with an overweight rating and set the price target at $135. BofA slashed the price objective to $220 from $228.

Technical analysis suggests it is good to hold as 100-day Moving Average and 100-200-day MACD Oscillator giving a mixed signal.

Check out FX Empire’s earnings calendar

Wall Street Week Ahead Earnings: Shopify, Baidu, Walmart, Deere and DraftKings in Focus

Investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could hit the stock market hard over the coming months. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant to see how it impacts earnings in 2022.

Earnings Calendar For The Week Of February 14

Monday (February 14)

TICKER COMPANY EPS FORECAST
AAP Advance Auto Parts $1.93
ALX Alexander’s $4.29
AMKR Amkor Technology $0.65
ANET Arista Networks $0.6
SRC Spirit Realty Capital $0.81
VNO Vornado Realty Trust $0.76
WEBR Weber $-0.02

Tuesday (February 15)

TICKER COMPANY EPS FORECAST
ABNB Airbnb $0.05
AKAM Akamai Technologies $1.14
DVN Devon Energy $1.24
MAR Marriott International $1.04
RPRX Royalty Pharma $0.79
VIAC ViacomCBS $0.37
WFG West Fraser Timber $3.51

 

Wednesday (February 16)

IN THE SPOTLIGHT: SHOPIFY, BAIDU

SHOPIFY: Canadian multinational e-commerce company is expected to report its fourth-quarter earnings of $0.62 per share, which represents a year-over-year decline of over 46% from $1.15 per share seen in the same period a year ago. But the e-commerce software company would post revenue growth of over 37% to $1.34 billion.

According to Barron’s report, Gary Robinson, investment manager at Baillie Gifford said that Shopify is miles ahead of its competitors in helping merchants all over the world sell their items. He added that the company’s revenue could rise sharply in the next five years.

BAIDU: The Chinese tech giant is expected to report its fourth-quarter earnings of $1.89 per share, which represents a year-over-year decline of nearly 40% from $3.08 per share seen in the same period a year ago.

However, Baidu Inc, a leader in the Chinese search industry in terms of user market share, would post revenue growth of about 9% to $5.04 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“We maintain a “Buy” rating for Baidu (BIDU) with a target price of RMB 165. Our target price is based on the forward P/E of 18.48x and forward P/S of 0.42x for FY22. Non-GAAP EPS of RMB 56.59 ($8.98) for FY22. This provides an upside potential of 15% over the CMP of RMB 143.80,” noted Shejal Ajmera is founder and head of research at CrispIdea.

“We decrease our estimate for revenue growth to 14.3% from 19% for FY21 due to China’s low GDP growth. We estimate revenue growth of 10% for FY22 and 12% for FY23. We estimate EPS of RMB 56.19 ($8.87) and RMB 56.59 ($8.93) for FY21 and FY22, respectively.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 16

TICKER COMPANY EPS FORECAST
AMAT Applied Materials $1.85
SAM Boston Beer $2.87
H Hyatt Hotels $-0.08
MGY Magnolia Oil & Gas $0.77
MRO Marathon Oil $0.52
NVDA Nvidia $1.0
TRIP TripAdvisor $-0.04

 

Thursday (February 17)

IN THE SPOTLIGHT: WALMART

Bentonville, Arkansas-based retailer Walmart is expected to report its fourth-quarter earnings of $1.49 per share, which represents year-over-year growth of over 7% from $1.39 per share seen in the same period a year ago.

The multinational retail corporation that operates a chain of hypermarkets would post revenue growth of nearly 1% to $150.91 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“Latest AlphaWise data shows Walmart+ membership continues to increase, with ~15m members total (~12% household penetration) & ~1m net members added in the past quarter. Overlap between Walmart+ & Prime remains high; we’ll monitor if this changes with a Prime fee hike coming,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We expect Walmart (WMT) to sustain recent momentum in its core business in F’22/F’23 and see a growing ability to balance longer-term investments with near-term returns. Our OW rating and $170 PT are underpinned by a preference for 1) quality players with scale and 2) defensive retailers as the market undergoes a mid-cycle transition.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 17

TICKER COMPANY EPS FORECAST
AN AutoNation $4.96
DBX Dropbox $0.2
ROKU Roku $0.01

 

Friday (February 18)

IN THE SPOTLIGHT: DEERE, DRAFTKINGS

DEERE: The world’s largest maker of farm equipment, is expected to report its fiscal first-quarter earnings of $2.28 per share, which represents a year-over-year decline of over 41% from $3.87 per share seen in the same period a year ago. The agricultural, construction and forestry equipment manufacturer would post revenue growth of about 0.5% to $8.09 billion.

“Higher input and freight costs to affect FY22 margins. We downgrade our rating to “Hold” from “Buy” for Deere & Co. and upgrade our TP to $406 for FY23. We derive TP based on non-GAAP EPS to $22.30 & $25.14 for FY22 & FY23, respectively and P/E of ~16.1x for FY23. This provides an upside potential of 8.6% from CMP of $373.79,” noted Shejal Ajmera, Head of Research at Crispidea.

“Following are the reasons for the above assumptions: 1) Strong demand in farm and construction equipment to aid topline; 2) Focus on automation to ensure long term growth and 3) Short term headwinds to affect profitability.”

DRAFTKINGS: The U.S.-focused gambling operator is expected to report its fourth-quarter loss of $0.78 per share, a dime greater than the loss of $0.68 it recorded in the same period a year ago. But the revenue would grow more than 36% to $439.5 million.

“We forecast legal US sports betting & iGaming to increase from <$1.5B in 2019 to $20.6B in 2025 as more states legalize and spend per capita rises. Forecast DKNG to maintain top tier share, 24% in OSB and 21% in iGaming in 2025. Investors question LT profits, but other developed markets have shown 25-30%+ profits for operators at maturity, esp. those with a customer acq. advantage similar to DKNG’s with its DFS database,” noted Thomas Allen, equity analyst at Morgan Stanley.

“Current valuation of 9x 2025e EBITDA does not reflect long-term margins or growth. Upside drivers include signs of profits in mature states, new product innovation and higher market share. Downside risks include higher losses, greater competition and lagging product innovation.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 18

TICKER COMPANY EPS FORECAST
ABR Arbor Realty Trust $0.39
B Barnes Group $0.49
BLMN Bloomin’ Brands $0.52
DE Deere & Co. $2.28

 

Earnings Week Ahead: Steel Dynamics, NetFlix, Tesla, AutoNation and Honeywell in Focus

Earnings Calendar For The Week Of October 18

Monday (October 18)

IN THE SPOTLIGHT: STEEL DYNAMICS, STATE STREET

STEEL DYNAMICS: The U.S-based domestic steel producer and metal recycler is expected to report its third-quarter earnings of $4.62 per share, which represents year-on-year growth of over 800% from $0.51 per share seen in the same period a year ago.

The third-largest producer of carbon steel products in the United States would post revenue growth of over 114% to around $5.0 billion. The company has consistently beaten consensus earnings estimates for the last four quarters.

The company updated its earnings guidance for the third quarter of 2021 in September. For the period, earnings per share (EPS) were expected to be between $4.880-$4.920.

Steel Dynamics is nearing the end of a multi-year investment cycle centered around the construction of a new, state-of-the-art steelmaking mill which comes online in mid-2021, positioning STLD’s FCF generation to increase from 2021 onwards. The company has a proven track record of shareholder returns, and is poised to deliver greater returns for investors, especially through share buybacks,” noted Carlos De Alba, equity analyst at Morgan Stanley.

STATE STREET: The second oldest continually operating United States bank is expected to post third-quarter earnings of $1.92 per share, which represents year-on-year growth of over 30% from $1.45 per share seen in the same period a year ago. The revenue is expected to increase around 6% to $2.95 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE OCTOBER 18

Ticker Company EPS Forecast
STT State Street $1.92
ACI AltaGas Canada $0.45
ELS Equity Lifestyle Properties $0.33
STLD Steel Dynamics $4.62
PACW Pacwest Bancorp $1.03
HXL Hexcel $0.08
SFBS ServisFirst Bancshares $0.96
FNB FNB $0.29
ACKAY Arcelik ADR $0.68
PHG Koninklijke Philips $0.62
ZION Zions Bancorporation $1.36

Tuesday (October 19)

IN THE SPOTLIGHT: NETFLIX, JOHNSON & JOHNSON

NETFLIX: The California-based global internet entertainment service company is expected to report its third-quarter earnings of $2.57 per share, which represents year-over-year growth of over 45% from $1.74 per share seen in the same period a year ago.

The streaming video pioneer would post revenue growth of over 16% to around $7.5 billion. In the last two years, the company has beaten earnings per share (EPS) estimates just thrice with a surprise of nearly 21%.

NetFlix’s better-than-expected third-quarter earnings results could help the stock hit new all-time highs. The company’s shares surged over 17% so far this year and it hit a record high of $646.84 on October 7.

NetFlix (NFLX) stock has emerged from its slump, jumping ~22% in <2 months. Estimates have remained relatively flat and NFLX now trades at 8.5x 2022E Rev, the top of its 3-year range. We expect 3Q net adds of 3.5MM and a 4Q guide of ~7-8MM. Squid Games has demonstrated the impact of a successful international strategy and, if done right, games like Oxenfree could achieve a similar Zeitgest moment. We remain ‘Buy’ rated with a price target of $737, representing 8.5x 2023 JEF Rev,” noted Andrew Uerkwitz, equity analyst at Jefferies.

JOHNSON & JOHNSON: One of the world’s largest and most comprehensive manufacturers of healthcare products is expected to post third-quarter earnings of $2.36 per share, which represents year-on-year growth of over 7% from $2.20 per share seen in the same period a year ago. The revenue to expected to increase over 12% to around $23.6 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE OCTOBER 19

Ticker Company EPS Forecast
FMBI First Midwest Bancorp $0.42
DOV Dover $1.85
SBNY Signature Bank $3.70
MAN ManpowerGroup $1.91
JNJ Johnson & Johnson $2.36
PM Philip Morris International $1.56
BK Bank Of New York Mellon $1.01
TRV Travelers Companies $1.91
ERIC Ericsson $0.17
FITB Fifth Third Bancorp $0.91
SYF Synchrony Financial $1.51
KSU Kansas City Southern $2.09
CBSH Commerce Bancshares $0.98
ONB Old National Bancorp $0.36
AMX America Movil Sab De Cv Amx $6.43
AMOV America Movil Sab De Cv $0.31
FULT Fulton Financial $0.33
NFLX Netflix $2.57
ISRG Intuitive Surgical $1.17
CNI Canadian National Railway USA $1.42
OMC Omnicom $1.37
UAL United Airlines Holdings -$1.51
IBKR Interactive Brokers $0.75
WTFC Wintrust Financial $1.52
WDFC Wd 40 $1.24
UCBI United Community Banks $0.66
HAL Halliburton $0.28
SNV Synovus Financial $1.07
PG Procter & Gamble $1.59
IRDM Iridium Communications -$0.02
RNST Renasant $0.66

Wednesday (October 20)

IN THE SPOTLIGHT: TESLA

TESLA: The California-based electric vehicle and clean energy company is expected to report its third-quarter earnings of $1.52 per share, which represents year-over-year growth of 100% from $0.76 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer would report revenue of $13.16 billion. The electric vehicle producer has beaten earnings three times in the last four quarters.

“We expect Tesla will be upbeat in 3Q21 given record deliveries beating estimates by ~20k announced in early October. Furthermore, the company announced record sales of 56,000 in China with a total of 133,248 or 55% of total deliveries for the quarter coming from their Shanghai facility,” noted Jeffrey Osborne, equity analyst at Cowen.

“We look forward to management’s commentary on Tesla’s internal chip production strategy and capacity expansion plans. We also look forward to an update on the opening of the Berlin Gigafactory. Additionally, we look forward to an update on Tesla’s 4680 cells and the incremental deployment of its beta FSD. Finally, we look forward to an update on the timeline for Semi and Cyber truck release.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE OCTOBER 20

Ticker Company EPS Forecast
ASML ASML $4.61
ABT Abbott $0.94
NEE NextEra Energy $0.73
BIIB Biogen $4.14
NDAQ Nasdaq Omx $1.71
NTRS Northern $1.67
BKR Baker Hughes Co $0.21
MTB M&T Bank $3.50
MKTX MarketAxess $1.46
LAD Lithia Motors $9.24
FHN First Horizon National $0.35
KNX Knight Transportation $1.06
BOKF BOK Financial $1.78
NEP Nextera Energy Partners $0.61
WSO Watsco $3.49
UNF UniFirst $1.81
SCL Stepan $1.42
TSLA Tesla $1.52
CSX CSX $0.38
CCI Crown Castle International $0.77
DFS Discover Financial Services $3.49
PPG PPG Industries $1.59
EFX Equifax $1.73
GGG Graco $0.64
REXR Rexford Industrial Realty $0.12
OMF OneMain Holdings $2.30
FR First Industrial Realty $0.22
THC Tenet Healthcare $1.03
LSTR Landstar System $2.46
SLM SLM $0.18
VMI Valmont Industries $2.49
SLG SL Green Realty -$0.12
LVS Las Vegas Sands -$0.18
SEIC SEI Investments $0.96
GL Globe Life Inc $1.90
TBK Triumph Bancorp $1.08
RUSHA Rush Enterprises $0.98
RLI RLI $0.59
UMPQ Umpqua $0.44
CNS Cohen & Steers $0.89
FTI FMC Technologies $0.02
TCBI Texas Capital Bancshares $1.10
STL Sterling Bancorp $0.52
ANTM Anthem $6.39
LRCX Lam Research $8.23
IBM IBM $2.53
KMI Kinder Morgan $0.24
URI United Rentals $6.84
CFG Citizens Financial $1.15
CMA Comerica $1.64
EXPO Exponent $0.40
MTG MGIC Investment $0.44
WGO Winnebago Industries $1.96
CVBF CVB Financial $0.37
CP Canadian Pacific Railway USA $0.93
MSM MSC Industrial Direct $1.27
UFPI Universal Forest Products $1.55
FCFS FirstCash $0.81
SNBR Scs Group Plc $1.43

Thursday (October 21)

IN THE SPOTLIGHT: AUTONATION

The Fort Lauderdale-based automotive retailer AutoNation is expected to report its third-quarter earnings of $4.16 per share, which represents year-over-year growth of about 75% from $2.38 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 47%. The automotive retail giant would post revenue of $6.5 billion.

“We are optimistic about the trajectory for new CEO, Mike Manley, previously in various leadership roles at FCA and Stellantis where he demonstrated leadership of highly complex organizations going through transformation changes in scale, scope and technology,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Omni-channel strategy unclear and may result in loss of share. For New Vehicles, historically, market share & gross profit per unit have declined. For Used Vehicles, the standalone used car business model was unsuccessful in the late 1990s. The business mix/growth/margins are similar to the other traditional auto dealers, and the stock trades at a discount to its historical average and vs the dealer average.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE OCTOBER 21

Ticker Company EPS Forecast
CROX Crocs $1.84
IQV IQVIA Holdings Inc $2.12
WAL Western Alliance Bancorporation $2.23
PSMT PriceSmart $0.73
SIVB SVB Financial $5.53
OZK Bank Ozk $0.97
CE Celanese $4.73
FFBC First Financial Bancorp $0.52
INTC Intel $1.11
TPH Tri Pointe Homes $0.91
OLN Olin $1.98
WRB W.R. Berkley $0.95
CSL Carlisle Companies $2.75
SNAP Snap -$0.10
MAT Mattel $0.72
VICR Vicor $0.46
CMG Chipotle Mexican Grill $6.30
ASB Associated Banc $0.44
INDB Independent Bank $1.02
GBCI Glacier Bancorp $0.71
SAP SAP $1.68
LUV Southwest Airlines -$0.27
VLO Valero Energy $0.86
WHR Whirlpool $6.11
PBCT People’s United Financial $0.33
AAL American Airlines -$1.09
FCX Freeport-McMoran $0.82
ALK Alaska Air $1.05
GPC Genuine Parts $1.64
AN AutoNation $4.16
SASR Sandy Spring Bancorp $1.09
ABB ABB $0.37
BCS Barclays $0.37
ATLCY Atlas Copco ADR $0.47
DHR Danaher $2.14
FAF First American Financial $1.82
BKU BankUnited $0.87
MMC Marsh & McLennan Companies $1.00
IPG Interpublic Of Companies $0.49
T AT&T $0.78
ALLY Ally Financial $1.95
WBS Webster Financial $1.08
NUE Nucor $6.93
UNP Union Pacific $2.49
EEFT Euronet Worldwide $1.42
TRN Trinity Industries $0.18
SAFE 3 Sixty Risk $0.35
GATX GATX Corp $1.07
KEY KEY $0.56
RCI Rogers Communications USA $0.81
PPBI Pacific Premier Bancorp $0.82
EWBC East West Bancorp $1.51
BX Blackstone $0.89
POOL Pool $3.85
DGX Quest Diagnostics $2.71
ALLE Allegion $1.30
HOMB Home Bancshares $0.44
TSCO Tractor Supply $1.64
SNA Snap-On $3.37
SON Sonoco Products $0.90
WSFS Wsfs Financial $0.88
RHI Robert Half International $1.40

Friday (October 22)

IN THE SPOTLIGHT: HONEYWELL INTERNATIONAL

The company which manufactures parts for planes made by Boeing and Airbus SE, Honeywell, is expected to report its third-quarter earnings of $1.99 per share, which represents year-over-year growth of about 28% from $1.56 per share seen in the same quarter a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of about 5%. The Charlotte, North Carolina-based company would post revenue growth of about 12% to $8.7 billion.

Last week, the company lifted its guidance for business jet deliveries and said the industry has almost completely shaken off the effects of the COVID-19 pandemic.

The worldwide technology and manufacturing company in its 30th annual Global Business Aviation Outlook forecasts up to 7,400 new business jet deliveries worth $238 billion from 2022 to 2031, up 1% in deliveries from the same 10-year forecast a year ago.

“We think that Honeywell (HON) stock currently is a better pick compared to Rockwell Automation stock, despite Rockwell’s revenue growing at a faster pace over the recent years. Honeywell trades at about 4.4xtrailing revenues, compared to 5.1x for Rockwell. Although both the companies saw a decline in revenue due to the pandemic, Rockwell has seen a sharp recovery aided by new orders and impact of ASEM, Kalypso, and Fiix acquisitions,” noted equity analysts at TREFIS.

Honeywell, on the other hand, is still seeing slower revenue growth, primarily due to its exposure to the aerospace segment, which was one of the worst-hit businesses during the pandemic. However, there is more to the comparison. Let’s step back to look at the fuller picture of the relative valuation of the two companies by looking at historical revenue growth as well as operating margin growth.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE OCTOBER 22

Ticker Company EPS Forecast
VFC VF $1.16
GNTX Gentex $0.40
SAM Boston Beer $4.26
IHG Intercontinental Hotels $0.20
ALV Autoliv $0.82
AXP American Express $1.76
SLB Schlumberger $0.35
ROP Roper Industries $3.83
HCA HCA $3.96
CLF Cliffs Natural Resources $2.21
HON Honeywell International $1.99
RF Regions Financial $0.53
STX Seagate Technology $2.21
AIMC Altra Industrial Motion $0.82