Lockheed Martin’s Q1 Earnings to Rise About 4%; Target Price $425

Bethesda, Maryland-based global security and aerospace company Lockheed Martin is expected to report its first-quarter earnings of $6.31 per share on Tuesday, which represents year-over-year growth of about 4% from $6.08 per share seen in the same quarter a year ago.

The world’s largest defense contractor would post revenue growth of over 5% to around $16.4 billion. It is worth noting that in the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 2%.

According to analysts at TREFIS, revenues and earnings to observe 4% and 6% growth in 2021, respectively.

Lockheed Martin shares, which fell about 9% last year, rebounded over 10% so far this year.

Analyst Comments

“We see roughly in line EPS of $6.33 (+4% y/y) on near consensus revenue of $16.45B (+5%). This is in line with weapons outlays (nearly +7% in Jan-Feb), which is typically correlated with sector sales growth, while our Q1 segment margin of 10.9% is slightly below Q1:20’s 11.0%,” noted Cai von Rumohr, equity analyst at Cowen.

“2021 revenue guide is unlikely to change after only 1Q, so the midpoint of $67.8B still may lag Street’s $68.06B. We est. the segment margin of 11.0% in line with the midpoint of guidance. Diluted EPS midpoint of $26.15 lags Street’s $26.34.”

Lockheed Martin Stock Price Forecast

Seven analysts who offered stock ratings for Lockheed Martin in the last three months forecast the average price in 12 months of $425.33 with a high forecast of $445.00 and a low forecast of $394.00.

The average price target represents an 8.56% increase from the last price of $391.81. Of those seven analysts, five rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $445 with a high of $633 under a bull scenario and $310 under the worst-case scenario. The firm gave an “Overweight” rating on the aerospace company’s stock.

“We view Lockheed as one of the most well-positioned companies with leadership positions in hypersonics, directed energy, autonomy, multi-domain operations, and space. Additionally, the company has one of the most well-insulated and visible earnings profiles in the group as a result of the F-35 program that makes up nearly 30% of total company revenues that is paired with multi-decade visibility,” said Kristine Liwag, equity analyst at Morgan Stanley.

“Our top Defense pick is Lockheed and we expect the stock to outperform defense peers due to its defensible portfolio, steady execution, strong free cash flow generation, and underlevered balance sheet.”

Several other analysts have also updated their stock outlook. UBS raised the stock price forecast to $425 from $400. In January, Berenberg lowered the target price to $400 from $425 and JP Morgan cut the price objective to $397 from $410.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Coca-Cola, United Airlines, NetFlix and SVB Financial in Focus

Earnings Calendar For The Week Of April 19

Monday (April 19)

IN THE SPOTLIGHT: COCA-COLA, UNITED AIRLINES

COCA-COLA: The world’s largest soft drink manufacturer is expected to report its first-quarter earnings of $0.50 per share, which represents a year-over-year decline of about 2% from $0.51 per share seen in the same quarter a year ago.

The company’s revenue growth to be flat at $8.6 billion. However, in the last two years, on average, Coca-Cola has beaten revenue estimates over 70% and earnings estimates of nearly 90%.

Coca-Cola, which has still not seen a full recovery to its pre-COVID-19 level, may be a decent investment opportunity at the moment. The stock traded around $60 pre-COVID in February 2020 and is 11% below that level. However, the stock has gained 40% since its March lows of $37, following the Fed’s stimulus package and measures announced by other economies. The gradual lifting of lockdowns and successful vaccine rollout has further enthused markets in anticipation of faster economic recovery,” noted analysts at TREFIS.

“However, the stock is unlikely to surpass its pre-Covid level anytime soon, as most of its business depends on demand from people going to entertainment venues, sporting events, etc. These locations are not yet fully operational in most parts of the world. With the recent spike in Covid cases, there are some forms of lockdowns imposed again in certain economies, thus slowing the recovery in demand. Therefore, in the absence of another complete lockdown (as was seen in 2020) and implementation of the vaccination program the stock is likely to rise, but full recovery to February 2020 levels looks unlikely in the near term. KO stock has a potential upside of about 10%.”

UNITED AIRLINES: One of the largest airlines in the world is expected to report a loss for the fifth consecutive time of $6.91 in the first quarter of 2021 on April 19 as the aviation service provider continues to be negatively impacted by the ongoing COVID-19 pandemic and renewed travel restrictions.

That would represent a year-over-year decline of over 168% from -$2.57 per share seen in the same quarter a year ago. The Chicago-based airline’s revenue would decline about 60% to around $3.3 billion.

“Most of the US airlines will report 1Q21 earnings the week of April 19 and 26. We expect the focus to be on higher fuel costs, the nascent traffic recovery, and improving the balance sheet. Our focus remains on domestic leisure airlines while watching borders reopening to determine recovery for international traffic. We also expect airlines to talk about repairing their balance sheet,” said Helane Becker, equity analyst at Cowen and Company.

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

Ticker Company EPS Forecast
KO Coca-Cola $0.50
PLD ProLogis $0.37
MTB M&T Bank $3.00
ONB Old National Bancorp $0.41
UAL United Airlines Holdings -$6.98
CCK Crown $1.37
STLD Steel Dynamics $1.84
ZION Zions Bancorporation $1.18
PNFP Pinnacle Financial Partners $1.43
ACC American Campus Communities $0.15
HXL Hexcel -$0.16
WTFC Wintrust Financial $1.40
FNB FNB $0.25
SFBS ServisFirst Bancshares $0.95
HDS HD Supply Holdings $0.39
IBM IBM $1.68
EIDX Eidos Therapeutics Inc -$0.80
LII Lennox International $1.25
CDNS Cadence Design Systems $0.74

 

Tuesday (April 20)

IN THE SPOTLIGHT: NETFLIX

The California-based global internet entertainment service company is expected to report its first-quarter earnings of $2.97 per share, which represents year-over-year growth of over 90% from $1.57 per share seen in the same quarter a year ago. The streaming video pioneer would post revenue growth of over 23% to around $7.15 billion.

“We expect paid net adds to be in line with guide, helped in part by ongoing COVID shutdowns in some markets. Our view is supported by our positive 1Q survey data, which implies NFLX continues to lead living room TV apps. We also view the 45% of survey respondents who share passwords as a LT opp’ty for incremental subs. Reiterate Outperform & $675 Price Target,” noted John Blackledge, equity analyst at Cowen and Company.

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

Ticker Company EPS Forecast
ABF Associated British Foods £17.31
XRX Xerox $0.29
AN AutoNation $1.85
DOV Dover $1.45
JNJ Johnson & Johnson $2.33
PG Procter & Gamble $1.19
ABT Abbott $1.27
PM Philip Morris International $1.40
LMT Lockheed Martin $6.31
DANOY Danone PK $0.46
TRV Travelers Companies $2.38
FITB Fifth Third Bancorp $0.69
EDU New Oriental Education Tech $0.06
NTRS Northern $1.49
KEY KEY $0.47
OMC Omnicom $1.13
CMA Comerica $1.38
SNV Synovus Financial $0.93
HOG Harley Davidson $0.90
IRDM Iridium Communications -$0.05
MAN ManpowerGroup $0.67
WBS Webster Financial $0.90
GATX GATX Corp $0.89
SFNC Simmons First National $0.52
BMI Badger Meter $0.42
NFLX Netflix $2.97
ISRG Intuitive Surgical $2.64
CSX CSX $0.96
EW Edwards Lifesciences $0.47
WRB W.R. Berkley $0.83
IBKR Interactive Brokers $0.87
THC Tenet Healthcare $0.73
HWC Hancock Whitney Corp $0.97
UCBI United Community Banks $0.64
FULT Fulton Financial $0.35
FMBI First Midwest Bancorp $0.37
EMR Emerson Electric $0.89
PCAR PACCAR $1.29
TER Teradyne $1.04
ENTG Entegris $0.72
CIT CIT $0.98
AVNT Avient Corp $0.71
ELS Equity Lifestyle Properties $0.35
PACW Pacwest Bancorp $0.91
BECN Beacon Roofing Supply $0.08

 

Wednesday (April 21)

IN THE SPOTLIGHT: SIGNATURE BANK

The New York-based full-service commercial bank is expected to report its first-quarter earnings of $2.85 per share, which represents year-over-year growth of over 50% from $1.88 per share seen in the same quarter a year ago. The bank would post revenue growth of about 18% to around $428 million.

SBNY has a unique business model, with its single-point-of-contact bankers, excellent credit culture, and a highly efficient operating structure. Its loan growth continues to outpace peers, given its relatively new focus on growing its PE/VC capital call lending business, while strategically de-emphasizing its NYC MF portfolio,” Ken Zerbe, equity analyst at Morgan Stanley.

“While we do expect losses in SBNY’s CRE portfolio, we believe the market is overly discounting this in the stock price, particularly given its strong underwriting history and conservative lending.”

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

Ticker Company EPS Forecast
HCSG Healthcare Services $0.27
ERIC Ericsson $0.11
TEL TE Connectivity $1.48
NDAQ Nasdaq Omx $1.72
RCI Rogers Communications USA $0.53
BKR Baker Hughes Co $0.11
HAL Halliburton $0.17
RANJY Randstad Holdings $0.46
SBNY Signature Bank $2.85
FHN First Horizon National $0.35
KNX Knight Transportation $0.70
BOKF BOK Financial $1.92
NEP Nextera Energy Partners $0.33
FCFS FirstCash $0.70
ASML ASML $3.06
NEE NextEra Energy $0.58
ANTM Anthem $6.38
LAD Lithia Motors $4.74
CP Canadian Pacific Railway USA $4.35
CACI Caci International $3.68
CMG Chipotle Mexican Grill $4.89
KMI Kinder Morgan $0.24
DFS Discover Financial Services $2.81
WHR Whirlpool $5.04
GGG Graco $0.50
GL Globe Life Inc $1.63
SLM SLM $1.05
REXR Rexford Industrial Realty $0.06
LSTR Landstar System $1.63
FR First Industrial Realty $0.24
RLI RLI $0.66
VMI Valmont Industries $1.92
SLG SL Green Realty -$0.14
UFPI Universal Forest Products $0.87
UMPQ Umpqua $0.44
TCBI Texas Capital Bancshares $1.09
BXS BancorpSouth $0.63
SNBR Scs Group Plc $1.85
CNS Cohen & Steers $0.76
RUSHA Rush Enterprises $0.52
PLXS Plexus $1.25
TBK Triumph Bancorp $0.91
BDN Brandywine Realty $0.02
EFX Equifax $1.53
LRCX Lam Research $6.60
CCI Crown Castle International $0.53
STL Sterling Bancorp $0.46
CHDN Churchill Downs $0.64
NWE Northwestern $1.12
RHI Robert Half International $0.80
SEIC SEI Investments $0.88
CVBF CVB Financial $0.37
LVS Las Vegas Sands -$0.27
PKX Posco $2.22
URI United Rentals $3.08
BZLFY Bunzl plc $0.15
ELISA Elisa Oyj €0.51

 

Thursday (April 22)

IN THE SPOTLIGHT: SVB FINANCIAL

The parent of Silicon Valley Bank is expected to report its first-quarter earnings of $6.47 per share, which represents year-over-year growth of about 153% from $2.55 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 over 45%. The Santa Clara, California-based company would post revenue growth of over 50% to about $1.24 billion.

SIVB is one of the fastest-growing banks in our coverage universe, with an average of 20%+ loan and deposit growth annually since 2010, with the growth driven by its unique niche of lending to the technology and life sciences industries, including PE and VC capital call lines. While we expect growth to slow, we still see low-teens loan growth (well above peers) for the next several years,” noted Ken Zerbe, equity analyst at Morgan Stanley.

“We are Equal-weight the shares due to valuation. SIVB is trading at just over 20x forward earnings and more than 10 P/E points above its peers (versus a 4-6x multiple premium that we believe it deserves). SIVB‘s earnings are highly sensitive to changes in Fed funds. Rate increases would drive higher EPS.”

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

Ticker Company EPS Forecast
WSO Watsco $0.88
LUV Southwest Airlines -$1.88
VLO Valero Energy -$1.56
AAL American Airlines -$4.18
HCA HCA $3.31
SAP SAP $1.21
GPC Genuine Parts $1.14
FRME First Merchants $0.78
NUE Nucor $3.07
FCX Freeport-McMoran $0.51
PNR Pentair Ordinary Share $0.61
ALK Alaska Air -$3.68
SASR Sandy Spring Bancorp $1.02
ORI Old Republic International $0.46
DOW Dow Chemical $1.10
DHR Danaher $1.74
WNS Wns Holdings $0.69
FAF First American Financial $1.31
RS Reliance Steel & Aluminum $3.55
T AT&T $0.78
UNP Union Pacific $2.08
TPH Tri Pointe Homes $0.47
TAL TAL International -$0.23
HBAN Huntington Bancshares $0.32
AEP American Electric Power $1.18
BIIB Biogen $5.02
DHI DR Horton $2.18
EWBC East West Bancorp $1.25
BX Blackstone $0.75
DGX Quest Diagnostics $3.74
POOL Pool $1.14
ALLE Allegion $1.02
CLF Cliffs Natural Resources $0.35
TSCO Tractor Supply $0.97
TRN Trinity Industries $0.06
MKTX MarketAxess $2.12
BKU BankUnited $0.74
SNA Snap-On $3.03
IQV IQVIA Holdings Inc $1.85
SON Sonoco Products $0.86
ODFL Old Dominion Freight Line $1.58
SKX Skechers USA $0.49
INDB Independent Bank $1.09
HTH Hilltop $1.01
CE Celanese $2.98
OZK Bank Ozk $0.86
FFBC First Financial Bancorp $0.47
CSL Carlisle Companies $0.68
SAM Boston Beer $2.60
STX Seagate Technology $1.33
VICR Vicor $0.19
WWE World Wrestling Entertainment $0.20
ABCB Ameris Bancorp $1.13
ARI Apollo Commercial Real Est Finance $0.33
GBCI Glacier Bancorp $0.75
SBCF Seacoast Banking Of Florida $0.48
VRSN Verisign $1.34
MAT Mattel -$0.34
WSFS Wsfs Financial $0.86
SNAP Snap -$0.21
SIVB SVB Financial $6.47
ASB Associated Banc $0.43
FE FirstEnergy $0.69
ADS Alliance Data Systems $3.21
CTXS Citrix Systems $1.42
PBCT People’s United Financial $0.34
CAJ Canon $0.27
WST West Pharmaceutical Services $1.42
NVR NVR $61.90
FFIN First Financial Bankshares $0.37
VVV Valvoline Inc $0.37
SAFE 3 Sixty Risk $0.33
ASR Grupo Aeroportuario Del Sureste $23.55
ORAN Orange $0.24
INTC Intel $1.14
KPELY Keppel Corporation $0.14
SAVE Spirit Airlines -$2.55
CS Credit Suisse -$0.40

 

Friday (April 23)

Ticker Company EPS Forecast
SXT Sensient Technologies $0.75
ALV Autoliv $1.43
SLB Schlumberger $0.18
AXP American Express $1.60
KMB Kimberly Clark $1.93
HON Honeywell International $1.80
RF Regions Financial $0.47
GNTX Gentex $0.49
E ENI $0.42

 

United Airlines Q1 Earnings to Decline Over 168%

United Airlines Holdings, one of the largest airlines in the world, is expected to report a loss for the fifth consecutive time of $6.91 in the first quarter of 2021 on April 19 as the aviation service provider continues to be negatively impacted by the ongoing COVID-19 pandemic and renewed travel restrictions.

That would represent a year-over-year decline of over 168% from -$2.57 per share seen in the same quarter a year ago. The Chicago-based airline’s revenue would decline about 60% to around $3.3 billion.

“Most of the US airlines will report 1Q21 earnings the week of April 19 and 26. We expect the focus to be on higher fuel costs, the nascent traffic recovery, and improving the balance sheet. Our focus remains on domestic leisure airlines while watching borders reopening to determine recovery for international traffic. We also expect airlines to talk about repairing their balance sheet,” said Helane Becker, equity analyst at Cowen and Company.

United Airlines Holdings in its filing with the U.S. Securities and Exchange Commission (SEC) on Monday, April 12, said it expects revenue to slump 66% to $3.2 billion in the first quarter of 2021.

However, United Airlines shares, which slumped more than 50% last year, rebounded over 29% so far this year.

United Airlines Stock Price Forecast

Fourteen analysts who offered stock ratings for United Airlines in the last three months forecast the average price in 12 months of $63.83 with a high forecast of $74.00 and a low forecast of $54.00.

The average price target represents a 13.46% increase from the last price of $56.26. Of those 14 analysts, seven rated “Buy”, six rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $65 with a high of $96 under a bull scenario and $30 under the worst-case scenario. The firm gave an “Equal-weight” rating on the airline’s stock.

“Why Equal-weight? We like UAL’s confidence in providing a 2023 cost guide which includes a goal to permanently reduce $2 billion of cost and at least match 2019 margins. The market is also very keen to see UAL’s go-to-market strategy on the revenue side as travelers return,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“However, the legacy network footprint is a slightly bigger overhang than its network peers and the cap structure will likely take years to normalize, which could remain overhangs on the stock.”

Several other analysts have also updated their stock outlook. Cowen and Company lifted the target price to $65 from $53. Raymond James raised the target price to $80 from $60. JP Morgan increased the price objective to $58 from $43. Citigroup upped the price target to $67 from $54. Jefferies lifted the target price to $60 from $55.

Analyst Comments

United Airlines along with its peers, American and Delta, have revised their full-year outlook with a likelihood of positive cash generation in summer. Assisted by the government’s payroll support program, United reported just $4 billion of operating cash outflow in 2020 – fairly lower than the $6.5 billion drop in the stock’s market capitalization,” noted analysts at TREFIS.

“Positive sentiment surrounding a quicker than anticipated recovery in travel demand has pushed UAL stock from $40 in early January to $58 at present. However, the risks associated with a fourth wave of the pandemic triggered by new virus strains remain a concern. Thus, Trefis believes that the stock is fairly valued.”

Check out FX Empire’s earnings calendar

PNC Financial Shares Rise After Q1 Earnings Blow Past Estimates; Target Price $192

PNC  shares rose about 3% on Friday after the financial services company reported better-than-expected earnings in the first quarter of this year and said its profit rose on significant provision recapture, reflecting improved macroeconomic expectations.

The Pittsburgh-based regional bank reported adjusted earnings per share of $4.10, beating Wall Street’s expectations of $2.75 per share, which represents year-over-year growth of over 110% from $1.95 per share seen in the same quarter a year ago.

Net income of $1.8 billion increased by $370 million, or 25%, reflecting the impact of a substantial provision recapture. Total revenue of $4.2 billion increased $12 million compared with the fourth quarter of 2020 as higher noninterest income more than offset a decrease in net interest income. In comparison with the first quarter of 2020, total revenue decreased by $116 million due to lower net interest income.

PNC Financial shares, which slumped 6.6% last year, rebounded about 20% so far this year. At the time of writing, the stock traded about 3% higher at $179.29 on Friday.

Executive Comments

PNC had a solid start to 2021. We grew revenue, managed expenses and achieved positive operating leverage. We recorded a substantial provision recapture, saw improvement in our credit metrics and capital and liquidity are at record levels. Looking ahead we see significant growth opportunities as the economy recovers and rates improve,” said Bill Demchak, PNC Chairman, President and Chief Executive Officer.

PNC Financial Stock Price Forecast

Twelve analysts who offered stock ratings for PNC Financial in the last three months forecast the average price in 12 months of $176.18 with a high forecast of $192.00 and a low forecast of $157.00.

The average price target represents a -1.86% decrease from the last price of $179.51. Of those 12 analysts, three rated “Buy”, nine rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $182 with a high of $220 under a bull scenario and $100 under the worst-case scenario. The firm gave an “Equal-weight” rating on the bank holding company’s stock.

Several other analysts have also updated their stock outlook. BofA Global Research raised the price objective to $205 from $199. Barclays upped the price target to $182 from $171. Goldman Sachs lifted the price target to $184 from $166. Deutsche Bank increased the target price to $190 from $157. UBS raised the price target to $159 from $142. Credit Suisse lifted the stock price forecast to $170 from $157.

Analyst Comments

PNC accelerated its national expansion across the sunbelt with BBVA USA purchase, the combined company’s footprint now extends through nearly 30 states and the District of Columbia and will have a presence in 29 of the top 30 U.S. MSAs. What’s next? Merger integration and execution on the ~$900m of net cost saves in 2022 are key to the stock going forward,” noted Betsy Graseck, equity analyst at Morgan Stanley.

“With net cost saves in the price, next leg up on meaningful revenue acceleration as PNC increases its fee contribution from new MSAs and further expands into new markets. We stay Equal-weight as we prefer stocks with larger benefit from rising rates and improving consumer credit as the COVID-19 vaccine is distributed through 2021.”

Check out FX Empire’s earnings calendar

Morgan Stanley Lifts UnitedHealth’s Target Price to $515, Says More Upside Later in The Year

Morgan Stanley raised their stock price forecast on UnitedHealth to $515 from $462 and said conservative guidance around utilization and acuity trends should pave the way for more upside later in the year.

This upgrade in target price comes just after the United States’ largest publicly-held health care provider reported better-than-expected earnings in the first quarter on Thursday, April 15. UnitedHealth Group said its Q1 revenue jumped 9% to $70.2 billion, beating analysts’ consensus estimates of $68.9 billion.

Minnesota-based health insurer reported adjusted net income of $5.31 per share, beating Wall Street’s expectations of $4.38 per share, which represents year-over-year growth of over 42% from $3.72 per share seen in the same quarter a year ago.

“2021 shaping up to be a year of beat and raise. Prior period development (~$1.04) accounted for the majority of 22% beat and we expect more upside as the year progresses and United gains better visibility on what percent of deferred care is not coming back. Moreover, commentary on the call highlighted that while utilization is still below baseline (for Medicare and Medicaid populations), early evidence suggests acuity levels for members who are coming back to the medical setting are not different than pre-COVID-19,” noted Ricky Goldwasser, equity analyst at Morgan Stanley.

“Considering that 2021 guidance assumes ~70% of COVID headwinds ($1.26 out of $1.80) would occur in 2H21 as utilization and acuity levels ramp, we think guidance leaves ample room for upside. 2022 on track to >$22 in earnings power. Our back-of-the-envelope earnings bridge highlights the path for 2022 EPS to exceed consensus estimates. Net-net, we see a path for United to deliver a bear to bull earnings range of $20.98 to $22.84 ($21.91 midpoint) in 2022 versus consensus’ $21.07. See Exhibit 1 for our earnings bridge to 2022.”

Following the upbeat earnings results, UnitedHealth’s shares, which surged more than 19% in 2020, hit a new all-time high of $392.93 on Friday.

Fifteen analysts who offered stock ratings for UnitedHealth in the last three months forecast the average price in 12 months at $425.13 with a high forecast of $515.00 and a low forecast of $370.00.

The average price target represents a 9.59% increase from the last price of $387.93. Of those 15 equity analysts, 13 rated “Buy”, two rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave the bull-case scenario target price of $592 and the worst-case scenario forecast of $323.

UnitedHealth Group is the number one Medicare Advantage player with ~28% market share, the number two Medicare PDP player with ~20% market share, and the number two commercial player with ~15% market share. United’s model is enhanced via vertical integration with its OptumRx PBM platform, which is one of the three largest PBMs in the country,” Morgan Stanley’s Goldwasser added.

“With a large lead in breadth of services offerings and considerable exposure to government businesses, UnitedHealth is well-positioned for any potential changes in the US healthcare system. A strong balance sheet and continued solid cash generation give flexibility for continued M&A.”

Other equity analysts also recently updated their stock outlook on Thursday. Oppenheimer raised the target price to $440 from $375. Stephens upped the price target to $425 from $415. Citigroup lifted the raises price objective to $450 from $408.

Moreover, RBC increased the stock price forecast to $409 from $396. Jefferies raised the target price to $414 from $394. Cowen and Company upped the price target to $415 from $370. Raymond James lifted the target price to $435 from $405.

Check out FX Empire’s earnings calendar

Citigroup Q1 Earnings Blow Past Estimates; Target Price $83

New York City-based investment bank Citigroup reported better-than-expected earnings for the first quarter, largely driven by improvements in the macroeconomic outlook and lower loan volumes.

Citigroup reported net income for the first quarter 2021 of $7.9 billion, or $3.62 per diluted share, on revenues of $19.3 billion. This compared to net income of $2.5 billion, or $1.06 per diluted share, on revenues of $20.7 billion for the first quarter 2020. That was higher than Wall Street’s consensus estimates of $2.56 per share.

However, the bank’s revenue decreased 7% from the prior-year period. Citigroup’s end-of-period loans were $666 billion as of quarter-end, down 8% from the prior-year period on a reported basis and 10% excluding the impact of foreign exchange translation.

Citigroup shares, which slumped more than 20% in 2020, rebounded over 17% so far this year.

Citigroup Stock Price Forecast

Fourteen analysts who offered stock ratings for Citigroup in the last three months forecast the average price in 12 months of $83.31 with a high forecast of $117.00 and a low forecast of $66.00.

The average price target represents a 14.31% increase from the last price of $72.88. Of those 14 analysts, nine rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $89 with a high of $130 under a bull scenario and $50 under the worst-case scenario. The firm gave an “Overweight” rating on the investment bank’s stock.

Several other analysts have also updated their stock outlook. Barclays raised the price target to $84 from $77. Piper Sandler lifted the target price to $93 from $89. Oppenheimer increased the price target to $117 from $112. UBS upped the price target to $92 from $89. Credit Suisse raised the price target to $83 from $78.

Analyst Comments

Citi is trading at just 0.8x NTM BVPS implying through the cycle ROE of just 8%, well below our 9% estimate for 2023. We believe the stock is cheap even if expenses related to the Fed/OCC consent order remain elevated. We have modeled in expenses rising to $45B / $44B for 2021 / 2022 well above $42B in 2019,” noted Betsy Graseck, equity analyst at Morgan Stanley.

Citi also has #1 share in Transaction Banking, a business we estimate delivers a ~35% ROTCE for Citi. We believe Citi can add $17 a share in value by disclosing full quarterly details on this business. We bake half in $8, as Citi discloses half of what we would like to see. Citi should get more credit for its global diversification and it’s more resilient wholesale business.”

Check out FX Empire’s earnings calendar

Wells Fargo Q1 Earnings Blow Past Estimates on Release of Loan Loss Reserves; Target Price $47

San Francisco, California-based multinational financial services company Wells Fargo reported better-than-expected earnings in the first quarter, largely driven by the release of $1.6 billion in its reserves for credit losses.

The fourth-largest lender in the U.S. reported adjusted earnings per share $1.05, beating analysts’ expectations of $0.69 per share. With $18.06 billion in revenue, Wells Fargo surpassed Wall Street’s consensus estimates of $17.5 billion.

“Our results for the quarter, which included a $1.6 billion pre-tax reduction in the allowance for credit losses, reflected an improving U.S. economy, continued focus on our strategic priorities, and ongoing support for our customers and our communities. Charge-offs are at historic lows and we are making changes to improve our operations and efficiency, but low-interest rates and tepid loan demand continued to be a headwind for us in the quarter,” said Chief Executive Officer Charlie Scharf.

Wells Fargo shares, which slumped more than 40% in 2020, rebounded over 31% so far this year.

Wells Fargo Stock Price Forecast

Sixteen analysts who offered stock ratings for Wells Fargo in the last three months forecast the average price in 12 months of $39.64 with a high forecast of $47.00 and a low forecast of $32.00.

The average price target represents a -0.38% decrease from the last price of $39.79. Of those 16 analysts, nine rated “Buy”, seven rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $47 with a high of $67 under a bull scenario and $21 under the worst-case scenario. The firm gave an “Overweight” rating on the financial services company’s stock.

Several other analysts have also updated their stock outlook. BofA raised the price objective to $44 from $43. Wells Fargo & Company had its price target lifted by Barclays to $42 from $36. They currently have an equal weight rating on the financial services provider’s stock. Seaport Global Securities raised to a buy rating from a neutral and set a $42 target price. Oppenheimer reaffirmed a hold rating on shares.

Analyst Comments

Wells Fargo (WFC) appears to be beginning to take action to restructure its business mix as it works to exit the Fed consent order/asset cap and reduce its expense base. While uncertainty remains around the impact of business exits and timing of consent order/asset cap exit, we believe risk more than accounted for in the stock at 9x our 2022e EPS,” noted Betsy Graseck, equity analyst at Morgan Stanley.

WFC benefit to EPS from rising long end rates is the highest in the group, with each ~50bps increase in the 10yr driving ~4% to NII and as much as ~8% to EPS. We model WFC driving their expense ratio down to 64% by 2023 on reduced risk and compliance spend, operational efficiencies, and branch optimization. Lower expense ratio possible.”

Check out FX Empire’s earnings calendar

Morgan Stanley Lifts Magna International’s Target Price to $96, Upgrades to Equal-weight

Morgan Stanley raised their stock price forecast on Magna International to $96 from $61 and upgraded the mobility technology company’s stock to an “Equal-weight” rating.

“We upgrade Magna International (MGA) to Equal-weight from Underweight as we have greater confidence that management’s strategy can drive higher share/content on high growth BEV platforms. We double our revenue CAGR to 4% and raise our price target to $96,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Raised exit EBITDA margin forecast to 8.9% vs. 8.2% previously as our higher growth drives operating leverage, primarily in the BEV-exposed businesses (BEV Power & Vision, Body & Exterior, Complete Seating and Complete BEV vehicle assembly). This change adds approximately $5 to our price target.”

The company is set to announce its next earnings report on Thursday, May 6. According to ZACKS Research, Magna International is expected to post $9.75 billion in sales for the current fiscal quarter.

The U.S. listed Magna International’s shares, which surged over 25% in 2020, rose 4.6% to $93.64 on Monday.

Eleven analysts who offered stock ratings for Magna International in the last three months forecast the average price in 12 months at $92.18 with a high forecast of $100.00 and a low forecast of $61.00.

The average price target represents a -1.56% decrease from the last price of $93.64. Of those 11 equity analysts, seven rated “Buy”, three rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the bull-case scenario target price of $135 and the worst-case scenario forecast of $55.

MGA is the third-largest global auto supplier, with leadership in many product segments, strong balance sheet, and attractive valuation vs. peers. We believe Magna has an ability to grow its EV and AV-related business lines in a way that can more than compensate for the run-out of ICE/legacy OEM product lines,” Morgan Stanley’s Jonas added.

“The net result is modest growth over market, balanced by a starting point of peak cycle and margins. We see the stock as largely fairly valued with a mostly even risk-reward skew.”

Other equity analysts also recently updated their stock outlook. Magna International had its price target upped by KeyCorp to $98 from $86. They currently have an overweight rating on the stock. Barclays upped their target price to $87 from $75 and gave the company an equal weight rating.

Check out FX Empire’s earnings calendar

PepsiCo Q1 Earnings to Rise about 4%; Target Price $150

Harrison, New York-based global food and beverage leader PepsiCo is expected to report its first-quarter earnings of $1.12 per share, which represents year-over-year growth of about 4% from $1.07 per share seen in the same quarter a year ago.

The U.S. multinational food, snack, and beverage corporation would post revenue growth of over 5% to about $14.6 billion. In the last four consecutive quarters, on average, the company which holds approximately a 32% share of the U.S. soft drink industry has delivered an earnings surprise of nearly 6%.

PepsiCo’s better-than-expected results, which will be announced on Thursday, April 15, would help the stock to recoup this year’s losses. PepsiCo shares, which rose over 8% in 2020, slumped about 4% so far this year.

PepsiCo Stock Price Forecast

Seven analysts who offered stock ratings for PepsiCo in the last three months forecast the average price in 12 months of $150.67 with a high forecast of $161.00 and a low forecast of $136.00.

The average price target represents a 5.49% increase from the last price of $142.83. Of those seven analysts, three rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $158 with a high of $185 under a bull scenario and $102 under the worst-case scenario. The firm gave an “Overweight” rating on the beverage company’s stock.

Several other analysts have also updated their stock outlook. Zacks Investment Research raised shares of PepsiCo from a “hold” rating to a “buy” rating and set a $142price target. Sanford C. Bernstein issued an “underperform” rating and a $136 target price. Deutsche Bank increased their target price to $148 from $143 and gave the company a “hold” rating. Wells Fargo issued an “equal weight” rating and a $157 target price.

Analyst Comments

“We are OW PEP. We forecast Pepsi will post superior topline growth relative to peers driven by exposure to the higher growth/higher margin snacks category (2/3 of PEP’s profit). Snacks is a higher growth category given: (1) shift to snacking vs. sit-down meals; (2) less pressure from health/wellness vs. beverages, and (3) PEP’s leading share in snacks vs. fragmented competition, driving share gains, and higher margins/ROIC,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

“We also see more structural Pepsi market share benefits post-COVID, as PEP uses its DSD distribution advantage, to gain shelf space and share in snacks, and in beverages, where PEP is advantaged vs competition with a much lower mix in away-from-home.”

Check out FX Empire’s earnings calendar

NVIDIA Tests All-Time High After Rosy Revenue Outlook

 

Shares in NVIDIA Corporation (NVDA) gained over 5% Monday after the Santa Clara chipmaker said that its sales for the current quarter sit ahead of previous forecasts. The upward revision comes after its total fourth quarter (Q4) revenues grew by 61%.

Although management did not provide a specific figure, it now expects Q1 revenue to come in above its earlier estimate of between $5.19- and $5.41 billion. “While our fiscal 2022 first quarter is not yet complete, Q1 total revenue is tracking above the $5.30 billion outlook provided during our fiscal year-end earnings call,” Nvidia’s CFO Colette Kress said in a statement cited by CNBC. Meanwhile, analysts expect sales during the period to reach $5.32 billion.

Earlier in the day, Chief Executive Jensen Huang told investors at the annual GTC developers conference that the company was launching its first data-center CPU that uses artificial intelligence. The new chip that powers computer servers is likely to intensify competition with key rival Intel Corp. (INTC), which controls over 90% of the CPU data-center market.

Through Monday’s close, NVIDIA stock has a market value of $377 billion, offers a small 0.11% dividend yield, and trades 131.36% higher over the past twelve months. By comparison, the industry’s largest exchange-traded fund (ETF) – the iShares PHLX Semiconductor ETF (SOXX) – has gained 103.13% over the same period.

Wall Street View

In late February, Raymond James analyst Chris Caso raised the investment firm’s price target on Nvidia to $700 from $600 while reiterating his Outperform rating. Caso pointed to “strong” revenue in the company’s gaming segment for the upgrade.

Coverage elsewhere on Wall Street also remains overwhelmingly favorable. The stock receives 26 ‘Buy’ ratings, 5 ‘Overweight’ ratings, 5 ‘Hold’ ratings, 1 ‘Underweight’ rating, and 1 ‘Sell’ rating. Twelve-month price targets range from $380 to $800, with the median target pegged at $660. Look for additional upgrades in the coming weeks as analysts revise revenue forecasts.

Technical Outlook and Trading Tactics

NVIDIA shares have oscillated within a 130-point range since early September. More recently, the price has rallied from the closely-watched 200-day simple moving average (SMA), with the stock closing just below its all-time high (ATH) at $614.90 in Monday’s trading session. Yesterday’s move on above-average volume indicates the involvement of larger market players, which may see the stock breakout into price discovery in the near future.

Active traders who position for such a move should use a fast period moving average as a trailing stop to capitalize on the bullish momentum. To use this technique, remain in the trade until the stock closes beneath the indicator.

For a look at today’s earnings schedule, check out our earnings calendar.

UnitedHealth Could Hit New All-Time High on Strong Q1 Earnings; Target Price $393

Minnesota-based health insurer UnitedHealth is expected to report its first-quarter earnings of $4.38 per share, which represents year-over-year growth of about 18% from $3.72 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 over 13%. The largest insurance company by Net Premiums would post revenue growth of over 7% of around $68.9 billion.

UnitedHealth’s better-than-expected results, which will be announced on Thursday, April 15, would help the stock hit new all-time highs.

UnitedHealth shares, which surged more than 19% in 2020, rose over 7% so far this year.

UnitedHealth Stock Price Forecast

Nine analysts who offered stock ratings for UnitedHealth in the last three months forecast the average price in 12 months of $393.78 with a high forecast of $415.00 and a low forecast of $370.00.

The average price target represents a 4.65% increase from the last price of $376.28. Of those nine analysts, eight rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $462 with a high of $529 under a bull scenario and $261 under the worst-case scenario. The firm gave an “Overweight” rating on the health care company’s stock.

Several other analysts have also updated their stock outlook. Mizuho raised the stock price forecast to $394 from $380. UBS lifted the price target to $362 from $355. Deutsche Bank upped the target price to $409 from $404. Bernstein lowered the target price to $409 from $413. Citigroup increased the price objective to $408 from $390. Stephens lifted the target price to $390 from $380.

Analyst Comments

UnitedHealth Group is the number one Medicare Advantage player with ~28% market share, the number two Medicare PDP player with ~20% market share, and the number two commercial player with ~15% market share. United’s model is enhanced via vertical integration with its OptumRx PBM platform, which is one of the three largest PBMs in the country,” noted Ricky Goldwasser, equity analyst at Morgan Stanley.

“With a large lead in breadth of services offerings and considerable exposure to government businesses, UnitedHealth is well-positioned for any potential changes in the US healthcare system. A strong balance sheet and continued solid cash generation give flexibility for continued M&A.”

Check out FX Empire’s earnings calendar

United Airlines Shares Slump Over 4% as Q1 Revenue Outlook Disappoints

United Airlines Holdings, one of the largest airlines in the world, in its filing with the U.S. Securities and Exchange Commission (SEC), said it expects revenue to slump 66% to $3.2 billion in the first quarter of 2021, sending its shares down over 4% on Monday.

Following this, United Airlines shares, which rose over 29% so far this year, slumped over 4% to $55.98 on Monday. The stock declined more than 50% last year.

In March 2021, the Chicago, Illinois-based airline said it observed a forward acceleration in customer demand for travel and new bookings, resulting in positive average daily core cash flow and expected positive average daily core cash flow moving forward. The average daily core cash flow (or core cash burn) for the first quarter of 2021 is expected to be nearly negative $9 million per day, an improvement of about $10 million from the last quarter of 2020.

The airline which operates a large domestic and international route network is scheduled to report first-quarter 2021 earnings on Monday, April 19.

United Airlines would post a loss for the fifth consecutive time of $6.76 in the first quarter of 2021 as the airlines continue to be negatively impacted by the ongoing COVID-19 pandemic and travel restrictions. That would represent a year-over-year decline of over 160% from -$2.57 per share seen in the same quarter a year ago.

United Airlines Stock Price Forecast

Twelve analysts who offered stock ratings for United Airlines in the last three months forecast the average price in 12 months of $60.27 with a high forecast of $74.00 and a low forecast of $40.00.

The average price target represents a 7.68% increase from the last price of $55.97. Of those 12 analysts, six rated “Buy”, six rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $65 with a high of $96 under a bull scenario and $30 under the worst-case scenario. The firm gave an “Equal-weight” rating on the airline’s stock.

“Why Equal-weight? We like UAL’s confidence in providing a 2023 cost guide which includes a goal to permanently reduce $2 bn of cost and at least match 2019 margins. The market is also very keen to see UAL’s go-to-market strategy on the revenue side as travelers return,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“However, the legacy network footprint is a slightly bigger overhang than its network peers and the cap structure will likely take years to normalize, which could remain overhangs on the stock.”

Several other analysts have also updated their stock outlook. Citigroup raised the stock price forecast to $67 from $54. Jefferies lifted the target price to $60 from $55. Bernstein upped the target price to $67 from $61. UBS increased the target price to $67 from $58. Deutsche Bank raised the target price to $60 from $56. Berenberg lifted the target price to $38 from $32.

Analyst Comments

UAL pre-announced revenues of ~$3.2BB (vs. our prev est./cons. of $3.4BB/3.3BB), down 66% vs. 2019 levels. This compares to UAL’s previous guidance of down 65-70% for the quarter. We adjust our revenue estimate down another 5% to account for the slightly weaker demand environment,” noted Sheila Kahyaoglu, equity analyst at Jefferies.

“However, in March 2021 UAL observed a forward acceleration in customer demand for travel and new bookings. For Q2, we estimate the declines moderate slightly with revenue down 60% vs. 2019 levels and accelerates in the back half, exiting the year at down 30%.”

Check out FX Empire’s earnings calendar

Chipotle Mexican Grill Could Hit New All-Time High on Strong Q1 Earnings

US restaurant chain Chipotle Mexican Grill is expected to report its first-quarter earnings of $4.79 per share, which represents year-over-year growth of over 55% from $3.08 per share seen in the same quarter a year ago.

Chipotle Mexican Grill to announce its first-quarter 2021 results on Wednesday, April 21, 2021. The California-based company would post revenue growth of over 20% to around $1.7 billion. According to ZACKS Research, equity analysts on average forecasts full-year sales of $7.24 billion for 2021, with estimates ranging from $7.11 billion to $7.51 billion. For 2022, analysts expect sales to reach $8.12 billion, with estimates ranging from $7.89 billion to $8.40 billion.

Chipotle Mexican Grill’s shares, which surged more than 65% in 2020, rose over 10% so far this year.

Analyst Comments

“Our 1Q comp forecast of 16% (unchanged here) compares to Street 16.8% and guidance of mid-to-high teens with January closer to 11%, weather impacting February and an easier lap in March. Pricing increases are another driver; cauliflower rice was launched early in the quarter, and quesadillas were launched nationally in early March. We model store margins of 20.9% vs Street 21.1% and EPS of $4.84 vs Street $4.80, unchanged here,” noted John Glass, equity analyst at Morgan Stanley.

“Annual comments still not likely to be provided aside from development (already provided at ~200), comp estimates were provided last quarter however for the current quarter. 2Q will lap the most material COVID-19 disruption and we forecast close to +30% SSS accordingly, which obscures some of the impacts of discrete items like new products or stimulus.”

Chipotle Mexican Grill Stock Price Forecast

Twenty-three analysts who offered stock ratings for Chipotle Mexican Grill in the last three months forecast the average price in 12 months of $1,649.95 with a high forecast of $2,000.00 and a low forecast of $1,165.00.

The average price target represents a 7.74% increase from the last price of $1,531.42. Of those 23 analysts, 14 rated “Buy”, nine rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $1,476 with a high of $1,895 under a bull scenario and $844 under the worst-case scenario. The firm gave an “Equal-weight” rating on the restaurant’s stock.

“Better sales, mainly off-premise, will be a key driver of margins, but we see other underappreciated opportunities, including labor efficiencies from the ‘second make line’, and supply chain improvements. The new management team actively focused on improving the top-line through a variety of initiatives (digital, delivery, throughput, new products, marketing, etc.); we think there is a potential runway for many of these to support comps in a tougher environment,” Morgan Stanley’s Glass added.

“Brand and cultural refresh, further unit growth runway, and revamped marketing are also key parts of the story. Current challenges weighed against high expectations reflected in current stock price, in our view, drives our Equal-weight rating.”

Several other analysts have also updated their stock outlook. Chipotle Mexican Grill had its price objective raised by Truist Securities to $1,750 from $1,700. They currently have a buy rating on the restaurant operator’s stock. BTIG Research lifted their price objective to $1,600 from $1,450 and gave the company a buy rating.

Moreover, KeyCorp lifted their price objective to $1,625 from $1,475 and gave the company an overweight rating. Loop Capital lifted their price objective to $1,800 from $1,600 and gave the company a buy rating. Wells Fargo & Company lifted their price objective to $1,775 from $1,677 and gave the company an overweight rating.

Check out FX Empire’s earnings calendar

Delta Airlines to Report Loss in 2021, Unless There is Significant Recovery in Traffic: Cowen

Cowen and company in their latest report said they continue to believe that Delta Airlines will report a loss this year unless there is a significant recovery of international and corporate traffic in the second half, which seems highly unlikely amid the fourth wave of coronavirus infections.

The Airline company which provides scheduled air transportation for passengers and cargo throughout the United States and across the world is expected to report its first-quarter earnings on Thursday, April 15.

Delta Airlines would report a loss for the fifth consecutive time of $2.84 in the first quarter of 2021 as the airlines continue to be negatively impacted by the ongoing COVID-19 pandemic and renewed travel restrictions.  That would represent a year-over-year decline of over 450% from -$0.51 per share seen in the same quarter a year ago.

The Atlanta-based airline’s revenue would decline more than 50% to around $3.9 billion.

In 2020, Delta Airlines reported a full-year loss for the first time in 11 years as COVID-19 travel restrictions significantly dented air travel demand, but CEO Ed Bastian said he expects 2021 to be the year of recovery.

Delta Airlines’ shares, which slumped more than 40% last year, rose about 22% to $49.27 on Friday.

“We are reiterating our Market Perform rating on the common shares of Delta Air Lines. We are increasing our price target to $53 from $44, which is based on 8.2x 2023E EPS. These shares are currently selling at ~8.2x the 2023 consensus EPS estimate, a discount to peers with higher exposure to domestic leisure traffic and a slight premium to its own historical trading range. The shares are ~20% below their pre-pandemic highs, but 2021 revenues are forecast to be ~42% below 2019 levels suggesting these shares may take a break before heading higher,” noted Helane Becker, Cowen and Company.

“We do not expect revenues to get back to 2019 levels until 2023 at the earliest. Exposure to corporate and international travel will continue to weigh on near-term results. Jet fuel pricing has recovered faster than anticipated, weighing on bottom-line forecasts in the near-term vs previous estimates. We continue to expect Delta will not recover revenue to pre-pandemic levels before 2023, unless corporate and international traffic recovers sooner than anticipated.”

Delta Airlines Stock Price Forecast

Seventeen analysts who offered stock ratings for Delta Airlines in the last three months forecast the average price in 12 months of $53.94 with a high forecast of $72.00 and a low forecast of $42.00.

The average price target represents a 9.48% increase from the last price of $49.27. Of those 17 analysts, ten rated “Buy”, seven rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $72 with a high of $96 under a bull scenario and $35 under the worst-case scenario. The firm gave an “Overweight” rating on the airlines’ stock.

“We remain Overweight Delta Airlines (DAL) and are raising our price target from $55 to $72. DAL remains our top Legacy airline pick. We believe DAL’s strong franchise/customer loyalty and historical margin superiority can continue on the other side of the pandemic. On the other hand, DAL cannot wave away Legacy challenges, including delayed corporate/international travel and increased pressure on the balance sheet,”

“Nevertheless, we believe DAL is well positioned for the recovery as we see it – our estimates are 39% above consensus for FY22 and 49% for FY23. Our DCF-backed PT of $72 is about 20% above where the stock was trading in 2018-19 with a 2023 estimated EPS about 20% higher than 2019 as well.”

Several other analysts have also updated their stock outlook. Evercore ISI raised their price objective to $55 from $51 and gave the stock an overweight rating. Jefferies Financial Group raised their price objective to $50 from $40 and gave the stock a hold rating. Susquehanna Bancshares cut shares of Delta Air Lines from a positive rating to a neutral rating and raised their price objective to $45 from $42.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: JPMorgan, Goldman, PepsiCo, BofA, Citigroup and Delta Airlines in Focus

Earnings Calendar For The Week Of April 12

Monday (April 12)

Ticker Company EPS Forecast
HDS HD Supply Holdings $0.39

Tuesday (April 13)

Ticker Company EPS Forecast
FAST Fastenal $0.37
HCSG Healthcare Services $0.28

Wednesday (April 14)

IN THE SPOTLIGHT: JPMORGAN CHASE, GOLDMAN SACHS

JPMORGAN CHASE: The leading global financial services firm with assets over $2 trillion is expected to report its first-quarter earnings of $2.06 per share, which represents year-over-year growth of over 290% from $0.78 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 over 6%.

The New York City-based investment bank would post revenue growth of about 6% to around $29.8 billion.

“We expect JPMorgan to likely beat the consensus estimates for revenues and earnings. The bank has outperformed the consensus estimates in each of the last three quarters, primarily driven by a jump in the Corporate & Investment Banking segment led by higher sales & trading and investment banking revenues. However, the above growth was partially offset by some weakness in the Consumer & Community Banking segment due to the lower interest rates environment. We expect the sales & trading and investment banking revenues to drive the first-quarter FY2021 results as well,” noted analysts at TREFIS.

“Further, recovery in bond yields over the recent months is likely to benefit core-banking revenues. Additionally, JPM released $2.9 billion from its loan-loss-reserve in the fourth quarter, suggesting some improvement in the perceived loan default risk. We expect the same momentum to continue in the first quarter. Our forecast indicates that JPMorgan’s valuation is around $143 per share, which is 7% lower than the current market price of around $154.”

GOLDMAN SACHS: The leading global investment bank is expected to report its first-quarter earnings of $10.10 per share, which represents year-over-year growth of about 225% from $3.11 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 nearly 50%.

The New York City-based bank would post revenue growth of over 31% to around $11.5 billion.

“We expect Goldman Sachs to outperform the consensus estimates for revenues and earnings. The bank has reported better than expected results in each of the last three quarters, mainly due to its strength in sales & trading and the investment banking space,” noted equity analysts at TREFIS.

“Despite the economic slowdown and the COVID-19 crisis, the company reported strong revenue growth in 2020 driven by a 43% y-o-y jump in global markets division (sales & trading) and a 24% rise in the investment banking unit. We expect the same trend to drive the first-quarter FY2021 results as well. Our forecast indicates that Goldman Sachs’ valuation is around $366 per share, which is 12% more than the current market price of around $327.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 14

Ticker Company EPS Forecast
TSCO Tesco £8.15
INFY Infosys $0.16
JPM JPMorgan Chase $3.06
GS Goldman Sachs $10.12
BBBY Bed Bath & Beyond Inc. $0.31
FRC First Republic Bank $1.54
SJR Shaw Communications USA $0.26
WFC Wells Fargo $0.69
ACI AltaGas Canada $0.51

 Thursday (April 15)

IN THE SPOTLIGHT: PEPSICO, BANK OF AMERICA, CITIGROUP, BLACKROCK, DELTA AIR LINES

PEPSICO: The company which holds approximately a 32% share of the U.S. soft drink industry is expected to report its first-quarter earnings of $1.12 per share, which represents year-over-year growth of about 4% from $1.07 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 nearly 6%.

The U.S. multinational food, snack, and beverage corporation would post revenue growth of over 5% to about $14.6 billion.

“Based on the 2020 performance and evolving business conditions, the company provided guidance for 2021. It expects organic revenue growth in the mid-single digits, with core constant currency EPS growth in high-single digits. It expects a core effective tax rate of 21%. Additionally, the company expects currency tailwinds to aid its revenues and core EPS by 1 percentage point in 2021, based on the current rates,” noted analysts at ZACKS Research.

“Further, it remains committed to rewarding its shareholders through dividends and share buybacks. It anticipates total cash returns to shareholders of $5.9 million, including $5.8 million of cash dividends and $100 million of share repurchases. The company recently completed its share-repurchase authorization and expects no more share repurchases through the rest of 2021.”

BANK OF AMERICA: The Charlotte, North Carolina-based investment bank is expected to report its first-quarter earnings of $0.66 per share, which represents year-over-year growth of over 60% from $0.40 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 over 9%.

However, the United States’ second-largest bank would see a revenue decline of more than 4% to around $21.7 billion.

CITIGROUP: The New York City-based investment bank is expected to report its first-quarter earnings of $2.52 per share, which represents year-over-year growth of 140% from $1.05 per share seen in the same quarter a year ago. But Citigroup’s revenue would decline about 12% to around $18.3 billion.

BLACKROCK: The world’s largest asset manager with $8.67 trillion in assets under management is expected to report its first-quarter earnings of $7.87 per share, which represents year-over-year growth of over 19% from $6.60 per share seen in the same quarter a year ago. The New York City-based bank would post revenue growth of about 16% to around $4.3 billion.

DELTA AIR LINES: The Airline company which provides scheduled air transportation for passengers and cargo throughout the United States and across the world is expected to report a loss for the fifth consecutive time of $2.84 in the first quarter of 2021 as the airlines continue to be negatively impacted by the ongoing COVID-19 pandemic and travel restrictions. That would represent a year-over-year decline of over 450% from -$0.51 per share seen in the same quarter a year ago.

The Atlanta-based airline’s revenue would decline more than 50% to around $3.9 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 15

Ticker Company EPS Forecast
CBSH Commerce Bancshares $0.94
PEP PepsiCo $1.12
WIT Wipro $0.07
BAC Bank Of America $0.66
C Citigroup $2.52
UNH UnitedHealth $4.38
HOMB Home Bancshares $0.43
USB US Bancorp $0.95
SCHW Charles Schwab $0.79
TFC Truist Financial Corp $0.93
BLK BlackRock $7.87
JBHT J B Hunt Transport Services $1.22
AA Alcoa $0.41
PPG PPG Industries $1.57
WAL Western Alliance Bancorporation $1.47
TSM Taiwan Semiconductor Mfg $0.93
DAL Delta Air Lines -$2.84
WAFD Washington Federal $0.48

Friday (April 16)

Ticker Company EPS Forecast
CFG Citizens Financial $0.96
BK Bank Of New York Mellon $0.87
PNC PNC $2.70
ALLY Ally Financial $1.13
STT State Street $1.35
MS Morgan Stanley $1.72
KSU Kansas City Southern $1.97

 

Royal Caribbean’s Q1 Earnings to Look Similar to Q4, Says Morgan Stanley

The Miami-based global cruise vacation company Royal Caribbean’s first-quarter earnings is expected to look similar to the previous quarter given it was another quarter of close to zero sailings, but remain upbeat on booking trends and sailing resumption, according to analysts at Morgan Stanley.

Royal Caribbean is set to report its first-quarter earnings in late April.

“We estimate EBITDA of $(475)m, a monthly opex burn of ~$160m, in-line with guidance of $150-170m, and the same as the Q4 rate of $162m. This gives adjusted net income of $(1.1)bn and EPS of $(3.93). Consensus is EBITDA of $(502)m and net income of $(1.1)bn. We are not modelling additional impairments or other exceptionals in Q1, which amounted to $(1.6)bn in 2020,” noted Jamie Rollo, equity analyst at Morgan Stanley.

“We are cautious on the cruise lines as we think a return to normal will take longer than expected, leverage is high (9x/7x/5x 2022-24e), and valuations look rich (17x pre-COVID-2019 P/E). We model a phased resumption and estimate EBITDA of $(747)m in 2021 (consensus $(977)m), and see a downside to this, and a return to 2019 levels by 2023.”

Royal Caribbean’s shares, which slumped 44% in 2020, rose over 20% so far this year.

Eight analysts who offered stock ratings for Royal Caribbean in the last three months forecast the average price in 12 months at $92.14 with a high forecast of $117.00 and a low forecast of $55.00.

The average price target represents a 2.57% increase from the last price of $89.83. Of those eight equity analysts, four rated “Buy”, two rated “Hold” and two rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $50 with a high of $134 under a bull scenario and $20 under the worst-case scenario. The firm gave an “Underweight” rating on the cruise company’s stock.

Other equity analysts also recently updated their stock outlook. Deutsche Bank raised their price objective to $79 from $62 and gave the stock a “hold” rating. Berenberg Bank lowered to a “sell” rating from a “hold” and set a $55 price target. JPMorgan increased their target price to $110 from $100 and gave the stock an “overweight” rating. Credit Suisse Group boosted their price target to $117 from $76 and gave the company an “outperform” rating.

“We think the cruise industry will be one of the slowest sub-sectors to recover from COVID-19. Cruising needs not just international travel to return, but ports to reopen, authorities to permit cruising, and the return of customer confidence,” Morgan Stanley’s Rollo added.

“We expect cruising to resume in Q2 2021 and expect FY19 EBITDA to return in FY23 given FY22 will be the first normal year, and pricing will likely come under pressure. FY19 EBITDA implies EPS 50% lower given share issue dilution and higher interest expense. We see debt doubling in FY21 vs FY19 due to operating losses and high capex commitments, and leverage looks high at 6x even in FY23e, so we see risk more equity might need to be raised.”

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Levi Strauss Shares Rise About 5% on Strong Q1 Earnings, Upbeat Outlook

Levi Strauss & Co, an American clothing company known for its Levi’s brand of denim jeans, reported better-than-expected earnings and revenue in the first quarter of 2021 and raised its half-year revenue growth guidance on assumption that there will be no significant worsening of the COVID-19 pandemic or dramatic incremental closure of global economies.

The world’s largest maker of pants said net revenues fell 13% year-over-year to $1.3 billion but beat Wall Street consensus estimates of $1.25 billion. Adjusted Diluted EPS came in at $0.34, beating analysts’ estimates of $0.25 per share.

Levi Strauss raised its fiscal first-half 2021 reported net revenues outlook to 24-to-25 percent growth compared to the first half of 2020 and raised its first-half adjusted EPS forecast to 41-to-42 cents.

The company also declared and paid a dividend of $0.04 per share in the first quarter totaling nearly $16 million. In April 2021, the company increased the dividend to $0.06 per share for the second quarter totaling about $24 million.

Following this, Levi Strauss’ shares, which surged more than 4% in 2020, rose about 5% to $26.22 on Friday.

Analyst Comments

“We come away from 1Q21’s beat incrementally positive as Levi Strauss (LEVI) appears on track to deliver its 12%+ adj. EBIT margin target by 2022. Raising 1H21 estimates even with ongoing COVID-19-related headwinds as underlying business momentum prevails. Raising price target to $28 from $25 & reiterate Overweight,” noted Kimberly C Greenberger, equity analyst at Morgan Stanley.

“1Q21’s significant beat and raise and encouraging 2QTD trends prove management’s key strategic priorities are working, in our view. In fact, 1Q21’s outsized 13.3% adj. EBIT margin result, or 12.6% excluding 70 bps of transitory FX tailwinds, confirms that management’s 12% adj. EBIT margin target is not only attainable on normalized revenue levels, but beatable. As such, we leave the print incrementally positive on LEVI’s long-term revenue and margin expansion opportunity. With the stock trading at a discount to peers (11.5x FY22 EV/EBITDA vs. 14x peer average), we see an opportunity for the stock to re-rate further.”

Levi Strauss Stock Price Forecast

Five analysts who offered stock ratings for Levi Strauss in the last three months forecast the average price in 12 months of $30.00 with a high forecast of $34.00 and a low forecast of $25.00.

The average price target represents a 14.55% increase from the last price of $26.19. All of those five analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price of $84 with a high of $96 under a bull scenario and $56 under the worst-case scenario. The firm gave an “Equal-weight” rating on the medical technology company’s stock.

Several other analysts have also updated their stock outlook. UBS raised the stock price forecast to $34 from $29. Evercore ISI lifted the target price to $30 from $26. Guggenheim increased the price target to $29 from $26. Citigroup upped the price objective to $29 from $25. JP Morgan raised the price target to $29 from $24. Telsey Advisory Group lifted the price target to $27 from $24.

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Hologic to Buy Mobidiag for $795 Million; Morgan Stanley Says Acquisition Makes Sense

Hologic, a global leader in women’s health, said on Thursday that it will acquire the fast-growing Finnish French biotechnology company Mobidiag Oy for about $795 million, including a cash payment of nearly $714 million for Mobidiag’s equity, and net debt of about $81 million.

The acquisition is expected to close early in the fourth quarter of fiscal 2021.

In 20202, Mobidiag generated nearly $42 million of revenue. Hologic expected to invest in assay development to drive the growth of the Novodiag platform. As a result, the acquisition is expected to be about $0.10 dilutive to Hologic’s non-GAAP earnings per share in fiscal 2022, slightly dilutive in 2023, and accretive thereafter, the company said in the press release.

Hologic’s shares, which surged about 40% in 2020, rose just over 1% to $73.58 so far this year.

Analyst Comments

“Mobidiag was not inexpensive, but the asset offers an entry point into the rapidly growing acute-care segment and is very consistent with Hologic’s strategy to expand MDx throughout and beyond the COVID-19 pandemic,” noted David Lewis, equity analyst at Morgan Stanley.

Hologic has developed two molecular diagnostic tests for COVID-19 which are driving significant financial contribution. The company’s 3-4% end-market growth rates likely limit long-term growth potential to an extent, but COVID-19 Dx cash flow could allow material reinvestment or tuck-ins to shift underlying growth higher. We see increased M&A activity as a requirement to shift the WAGMR higher and drive the multiple.”

Hologic Stock Price Forecast

Seven analysts who offered stock ratings for Hologic in the last three months forecast the average price in 12 months of $96.00 with a high forecast of $110.00 and a low forecast of $91.00.

The average price target represents a 30.47% increase from the last price of $73.58. Of those seven analysts, six rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $84 with a high of $96 under a bull scenario and $56 under the worst-case scenario. The firm gave an “Equal-weight” rating on the medical technology company’s stock.

Several other analysts have also updated their stock outlook. Hologic had its target price boosted by Jefferies to $110 from $106. Jefferies Financial Group currently has a buy rating. Robert W. Baird upped their price target to $91 from $84 and gave the stock a buy rating.

Moreover, Zacks Investment Research downgraded Hologic to a hold rating from a buy and set a $79 price target on the stock. Argus upped their price target to $100 from $85.

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Conagra Brands Tops Earnings, Revenue Estimates in Q3

Chicago, Illinois-based packaged foods company Conagra Brands reported better-than-expected earnings and revenue in the third quarter of the fiscal year 2021, largely driven by continued elevated at-home food consumption due to the COVID-19 pandemic.

The world’s leading food company said its net sales surged more than 8% to $2.77 billion during the three months ended on February 28, 2021. That was above the market expectations of $2.72 billion. Adjusted earnings per share came in at 0.59, beating analysts’ consensus estimates of 0.58 per share.

Net sales for the grocery & snacks segment increased 10.8% to $1.1 billion in the quarter reflecting: a 2.3% decrease from the impact of the Sold Businesses; and a 13.1% increase in organic net sales. On an organic net sales basis, volume increased 9.4% and price/mix increased 3.7%. Volume benefited from continued elevated at-home food consumption as a result of the COVID-19 pandemic.

Conagra Brands forecasts organic adjusted operating margin in the range of 14% to 15% and adjusted EPS between $0.49 to $0.55 in the fourth quarter of the fiscal year 2021. For fiscal 2022, the company expects net sales growth (3-year CAGR ending fiscal 2022) of +1% to +2%, an adjusted operating margin of 18% to 19%, and adjusted EPS of $2.63 to $2.73.

Conagra Brands’ shares, which about 6% in 2020, traded nearly flat at $37.19 on Thursday.

Executive Comments

“We remain confident that each of our retail domains – frozen, snacks, and staples – is well-positioned to sustain the benefits of the eat-at-home habits consumers have developed during the COVID-19 pandemic. Our continued business momentum, coupled with our disciplined approach to investment, reinforce our confidence in the long-term potential of the business and our ability to create sustained value for our shareholders,” said Sean Connolly, president and chief executive officer of Conagra Brands.

“We further demonstrated this confidence by repurchasing nearly $300 million of our common stock this quarter, which came after we raised our quarterly dividend 29% earlier this fiscal year.”

Analyst Comments

Conagra Brands (CAG) Q3 EPS of $0.59, slightly ahead of cons. $0.58, driven by below-the-line items. Org. sales growth beat (+9.7% vs. +7.3%), although gross and op. margins missed, albeit at the low end of mgmt’s Q3 guide. FY’22 guidance reaffirmed with 8.8mm shares repo’d in Q3, which could add $0.05 to FY’22 EPS. Q4 guide above cons. sales, but below on implied op. profit at margin guide midpoint, driven by cost inflation. The question now on margin progression in FY’22,” noted Rob Dickerson, equity analyst at Jefferies.

Conagra Brands Stock Price Forecast

Three analysts who offered stock ratings for Conagra Brands in the last three months forecast the average price in 12 months of $37.00 with a high forecast of $40.00 and a low forecast of $34.00.

The average price target represents a -0.40% decrease from the last price of $37.15. Of those three analysts, one rated “Buy”, one rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $38 with a high of $48 under a bull scenario and $25 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged foods company’s stock.

“Advantaged legacy Conagra Brands (CAG) topline growth outlook: Exposure to frozen, an opportunity to turnaround refrigerated business, and snacking growth should sustain LSD org sales growth. PF deal increases operational complexity and reduces fundamental visibility: Greater risk of PF disappointing given higher expectations from management’s strong turnaround track record,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

“We see solid topline growth but limited potential for mid-term target upside: Opportunity to close gross margin gap vs peers, but see downside risk if topline/synergy estimates fall short of optimistic F22 targets. The valuation reflects higher leverage: 10.5x 2022 EV/EBITDA valuation reflects relatively higher leverage of 3.6x net debt/EBITDA.”

Several other analysts have also updated their stock outlook. Conagra Brands had its price target boosted by Credit Suisse Group to $34 from $33. They currently have an underperform rating on the stock. Zacks Investment Research upgraded Conagra Brands to a hold rating from a sell rating and set a $36 price objective. Jefferies Financial Group issued a buy rating and a $41 price objective for the company.

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Morgan Stanley Downgrades NXP Semiconductor to Equal-weight But Raises Target Price to $213

Morgan Stanley in its latest research note downgraded NXP Semiconductor to “Equal-weight” from “Overweight” following significant multiple expansion but raised their stock price forecast to $213 from $190.

“After a period of outperformance, NXP Semiconductor (NXPI) has closed the previous valuation gap relative to peers. We still like the company’s position in autos and new growth drivers in areas like UWB, IoT and BMS. However, we now expect the stock to perform in line with the group and thus move to the sidelines,” noted Craig Hettenbach, equity analyst at Morgan Stanley.

“We remain positive on NXP’s growth drivers and improved execution, although this now appears more appropriately reflected in the stock. This call could be early, considering the strength in the semi cycle and the company’s lean inventory in the distribution channel that should serve as a tailwind to growth, albeit these dynamics seem widely recognized at this point. Recent work from our equity strategy team points to multiple compression in 2021, placing a greater burden on estimate revisions from here. To this point, after significant upside to the company’s Q1 outlook provided in early February (revenue guided 10% above the Street and EPS 23% higher, or ~2x that of peers), meaningful EPS revisions are likely harder to come by near term.”

NXP is set to report its first-quarter earnings in late April. According to ZACKS Research, the company is expected to report earnings of $2.21 per share, which represents year-over-year growth of over 8% from $2.04 per share seen in the same quarter a year ago.

ZACKS Research forecasts net sales of $2.55 billion, up 26.4% from the year-ago period. For the full year, Zacks expects earnings of $9.37 per share and revenue of $10.46 billion.

NXP Semiconductor’s shares, which rose about 25% in 2020, surged over 33% so far this year.

Nineteen analysts who offered stock ratings for NXP in the last three months forecast the average price in 12 months at $206.63 with a high forecast of $250.00 and a low forecast of $168.00.

The average price target represents a -2.60% decrease from the last price of $212.14. Of those 19 equity analysts, 15 rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Other equity analysts also recently updated their stock outlook. Keybanc raised the target price to $225 from $210. NXP Semiconductors had its target price increased to $250 from $215. The brokerage presently has an “outperform” rating on the semiconductor provider’s stock. Barclays boosted their price objective to $200 from $150 and gave the company an “overweight” rating.

Moreover, Cowen upped their price target to $225 from $220 and gave the stock an “outperform” rating. Raymond James upped their price target to $220 from $210 and gave the stock an “outperform” rating.

NXP Semiconductor (NXP) has attractive exposure to secular growth themes like EVs, increasing penetration of ADAS, connectivity, and mobile payments. Furthermore, the company has executed well this cycle and in particular, its lean channel inventory positions them well for a snapback as demand improves,” Morgan Stanley’s Hettenbach added.

“However, we move to the sidelines after a period of strong outperformance in the stock. NXPI’s multiple relative to peers has moved from a material discount to slightly above where it typically trades. Furthermore, we think meaningful EPS revisions are going to be more difficult to come by near term.”

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