Wall Street Week Ahead Earnings: Dick’s Sporting, Campbell Soup and Oracle in Focus

Investors have been rattled by geopolitical tensions over the Russia-Ukraine crisis, which has caused the global stock market to suffer. The S&P 500 plunged into correction territory.

If this tension continues for long, analysts fear that it will be harder for the U.S. Federal Reserve to raise rates after this month’s hike. Due to this, investors sought safe-haven assets and U.S. Treasury yields fell as tensions between Ukraine and Russia increased.

In addition, investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks amid surging inflation.

Earnings By Day

Earnings Calendar For The Week Of March 7

Monday (March 7)

TICKER COMPANY EPS FORECAST
CIEN Ciena $0.36
CLAR Clarus $0.31
EGRX Eagle Pharmaceuticals $0.41
SQSP Squarespace $-0.03
VET Vermilion Energy $0.57

 

Tuesday (March 8)

IN THE SPOTLIGHT: DICK’S SPORTING

The sporting goods retailer Dick’s Sporting Goods is expected to deliver earnings per share of $2.75 in the holiday quarter, which represents year-over-year growth of over 13% from $2.43 per share seen in the same period a year ago.

The Coraopolis Pennsylvania-based company would post revenue growth of more than 5% to $3.29 billion from $3.13 billion a year earlier. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

Dick’s Sporting Goods (DKS) is in a favourable position given its category dominance, industry tailwinds, and healthy balance sheet. Its outlook within the category is likely to be even stronger post-COVID-19. We see a positive risk/reward skew based on our view the earnings power of the business is underappreciated. Key drivers include merchandise margin expansion and capital return (buybacks). We think there is upside for the stock without underwriting a higher valuation multiple as a result,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“The stock’s multiple has not broken out like it has for other retailers in our space which should emerge stronger post-COVID-19. The potential for multiple expansion adds optionality/upside to the bull case.”

A list of other earnings reports mentionable

COMPANY EPS FORECAST
ABM ABM Industries $0.82
BMBL Bumble $-0.02
WOOF Petco Health & Wellness $0.23
VTNR Vertex Energy $0.09

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 8

Wednesday (March 9)

IN THE SPOTLIGHT: CAMPBELL SOUP

The Camden, New Jersey-based soups and snacks maker Campbell Soup is expected to report earnings per share of $0.78 in the fiscal second quarter, which represents a year-over-year decline of over 7% from $0.84 per share seen in the same period a year ago.

Analysts expect that easing COVID-19 curbs and consumers eating out more would affect the company’s processed food sales. Campbell’s revenue was forecast to decline nearly 3% to $2.21 billion. However, it is worth noting that the maker of canned soup has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“High exposure to secularly challenged soup category: Shelf-stable soup (26.5% of sales) faces headwinds given shifts in preferences toward better-for-you and fresh foods, competition from private label, and pricing pressure. Snacking brands are well-positioned, but face competitive pressures: Milano, Goldfish, Farmhouse, and Snyder’s-Lance have strong brand equity, but face high competition from PEP and MDLZ,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

“Significant organizational changes over last two years refocused the company and show promise: Divesting non-core businesses and new leadership refreshes the company’s strategic plan, allowing the company to focus on its key segments and geographies.”

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
CPB Campbell Soup $0.78
EXPR Express $0.08
KFY Korn Ferry $1.48
LCUT Lifetime Brands $0.46
REVG REV Group $0.09
THO Thor Industries $2.91

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 9

Thursday (March 10)

IN THE SPOTLIGHT: ORACLE

The world’s largest database management company, Oracle, is expected to report earnings per share of $1.0 in the fiscal third quarter, which represents a year-over-year decline of nearly 3% from $1.03 per share seen in the same period a year ago.

The Austin, Texas-based computer technology corporation would post revenue growth of more than 4% to $10.5 billion from $10.1 billion a year earlier. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“A preliminary look at a potential Oracle + Cerner Pro-forma model suggests modest EPS accretion by CY23, assuming Oracle shifts capital allocation priorities and halts the torrid pace of buybacks. Our illustrative analysis shows leverage exiting CY23 at 3.2x, assuming a deal at 32% cash/68% debt,” noted Keith Weiss, equity analyst at Morgan Stanley.

In December, several equity analysts raised their price targets after the database management company beat earnings estimates for the fiscal second quarter and forecasts profit and revenue above expectations for the ongoing quarter.

The company expects to earn $1.19 to $1.23 per share in the fiscal third quarter, higher than the Wall Street consensus estimates of $1.16. Revenue is expected to be $10.7 billion to $10.9 billion, above expectations of $10.56 billion, Reuters reported.

Oracle’s current low valuation at ~18x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher. With management guiding to mid-single-digit CC revenue growth in a software sector filled with strong secular growth stories, and operating margins declining in FY22 due to heightened investment in Cloud, we remain Equal-weight while our price target moves up to $87,” Weiss added.

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
GCO Genesco $2.53
JD JD.com $0.14
LZ LegalZoom.com $-0.09
MLNK MeridianLink $-0.02
PSTL Postal Realty Trust $0.23

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 9

Friday (March 11)

TICKER COMPANY EPS FORECAST
BKE Buckle $1.29
GENI Genius Sports $-0.23
PLXP PLx Pharma $-0.69
SPNE SeaSpine Holdings $-0.33

 

Bybit to Issue F1 Oracle Red Bull Racing Fan Tokens in 5-Year Deal

It’s been a busy start to the year for crypto exchanges, which have continued to look towards the sport to grow market awareness.

Superbowl LVI proved to be a huge success for crypto exchanges that bought advertising airtime. We have also seen a sharp increase in sponsorship activity, however, as exchanges set out goals to build brand awareness.

Superbowl LVI Highlights the Influence of Sport

In the last week, the crypto news wires were flooded with news of the success of crypto advertising at this year’s event. Major exchanges that bought airtime at Superbowl LVI included Coinbase, Crypto.com, eToro, and FTX.

It was Coinbase and Crypto.com, however, that reportedly shared the limelight. In response to a 1-minute ad, Coinbase’s app jumped from 186th to 2nd on Apple’s App Store. This year, Super Bowl ads cost about $7m for every 30 seconds according to reports.

Exchanges and Fan Tokens Prove Popular in Sport

While advertising was immensely successful at Super Bowl LVI, crypto exchanges have also chosen sponsorship as an alternative avenue to build brand awareness.

In late January, the Argentina Football Association presented Binance as the main sponsor of the men’s national soccer team. In a 5-year deal, the agreement included the development of a new Fan Token. For Binance, it wasn’t the first relationship with men’s soccer.

In 2021, Binance had signed a sponsorship deal with the Italian football team Lazio. Binance issued fan tokens in recognition of the Lazio relationship. In a fast-growing trend, fan tokens also exist for Italian football teams AS Roma and Juventus and Spain’s Atletico de Madrid.

Following the success of other exchanges and football fan tokens proving popular, it was just a matter of time before other sports followed suit.

Digital Assets and Formula 1 Is A Growing Relationship

On Wednesday, Oracle Red bull Racing announced Bybit joining “the charge as Principal Team Partner in the largest per annum cryptocurrency sports agreement to date”. The partnership aims “to boost fan engagement with scope for digital asset creation and social tokens in future”. Bybit will reportedly work with the Oracle Red bull Racing team in two expanded roles:

  • Exclusive crypto exchange partner that includes being the Fan Token Issuance Partner.
  • Tech incubator partner, collaborating on crypto-driven initiatives from crypto-literacy to the promotion of growth in green technologies.

On Wednesday, Red Bull Racing also reportedly signed a new 5-year sponsorship deal with Oracle worth around $300m. As a result, the team changed its name to Oracle Red Bull Racing.

Red Bull Racing took the Driver’s Championship in 2021. Max Verstappen nipped Mercedes’ Lewis Hamilton to 1st place in the final race of the season.

Oracle Agrees to Acquire Medical Records Company Cerner

Mergers and acquisitions have been a crucial part of the market for centuries. Oracle is set to embark on its biggest acquisition after agreeing to acquire Cerner.

Oracle to Acquire Cerner for Nearly $30 Billion

A report by the Wall Street Journal earlier today revealed that Oracle has agreed to acquire medical records company Cerner in a deal worth nearly $30 billion. This latest development would be the biggest acquisition in Oracle’s history.

The deal would be all in cash, with Cerner valued at $95 per share or $28.3 billion. The acquisition is expected to be finalized in 2022, allowing Oracle to boost its presence within the healthcare industry. The introduction of health data to its cloud services could make Oracle one of the biggest players in the healthcare sector.

This latest development comes at a time when mergers and acquisitions are increasingly becoming popular. 2021 is the first year that mergers and acquisitions surpassed $5 trillion globally, indicating a growing appetite for bigger companies to swallow the smaller ones.

The technology and healthcare sectors lead the global charge for mergers and acquisitions.

Oracle’s Stock Price Dips, Cerner Rallies

Following the announcement of the deal, the shares of the two companies have behaved differently. The shares of Oracle are down by more than 5% since the United States market opened a few hours ago.

At press time, ORCL is trading at $91.68, down by more than 5% over the past 24 hours. Despite the recent dip, ORCL has performed excellently since the start of the year. ORCL’s value has soared by more than 43% over the last 12 months.

CERN, on the other hand, has seen its value rise by more than 1% since the news was reported a few hours ago. The stock has performed excellently in recent months, rising by more than 16% since the start of 2021. At press time, CERN is trading at $90.48 per share.

Oracle Keeps Seeing Big Money

And the corporate technology giant could rise even more due to an announced acquisition of health data firm Cerner. But another likely reason is Big Money lifting the stock.

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Oracle has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares all year.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals ORCL has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In 2021, the stock has attracted 22 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • 1-month outperformance vs. iShares Expanded Tech-Software Sector ETF (+13.9% vs. IGV)

Outperformance is important for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Oracle has been growing nicely. Take a look:

  • 1-year earnings growth rate (+9.7%)
  • 3-year earnings growth rate (+93.1%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, ORCL has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

ORCL has a lot of qualities that are attracting Big Money. And since 2015, it’s made this list 9 times, with its first appearance on 7/9/2019… and gaining 62.11% since. The blue bars below show the times that Oracle was a top pick since 2015:

Source: www.mapsignals.com

It’s been a top stock in the technology sector according to the MAPsignals process. I wouldn’t be surprised if ORCL makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

The Oracle rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no positions in ORCL in personal or managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

 

Why Oracle Stock Is Up By 15% Today

Oracle Stock Rallies As Quarterly Report Exceeds Analyst Estimates

Shares of Oracle gained strong upside momentum after the company released its quarterly report. Oracle reported revenue of $10.4 billion and adjusted earnigns of $1.21 per share, beating analyst estimates on both earnings and revenue.

Oracle stated that the board of directors increased the share buyback program by $10 billion, which will provide additional support to the company’s shares.

In the next quarter, Oracle expects to report adjusted earnings of $1.14 – $1.18 per share, in line with the analyst consensus. The company plans to grow its revenue by 3% – 5%.

In the earnings press release, Oracle highlighted growth opportunities for its cloud infrastructure business. The market clearly agrees with the company, sending its shares above the $100 level after the release of the earnings report.

What’s Next For Oracle Stock?

Currently, analysts expect that Oracle will report earnings of $4.7 per share in the current year and $5.16 per share in the next year, so the stock is trading at roughly 20 forward P/E, which looks relatively cheap in the current market environment.

Analysts rushed to update their price targets after the strong quarterly report, providing additional support to the stock. The expansion of the buyback program will serve as a longer-term positive catalyst.

Demand for tech stocks remains strong, which is bullish for Oracle. It remains to be seen whether this demand will stay strong when the Fed starts raising rates in 2022, but Oracle’s reasonable valuation should provide some support in case of a sell-off in the tech segment.

In the near term, Oracle stock may face a temporary pullback due to profit-taking. However, the fundamental story remains strong while valuation is attractive compared to many alternatives in the tech space, so Oracle stock has a decent chance to gain sustainable upside momentum in the upcoming weeks.

For a look at all of today’s economic events, check out our economic calendar.

Oracle Shares Soar After Analysts Boost Price Targets

Oracle shares surged nearly 12% in pre-market trading on Friday as several equity analysts raised their price targets after the world’s largest database management company beat earnings estimates for the fiscal second quarter and forecasts profit and revenue above expectations for the ongoing quarter.

On Thursday, the Austin, Texas-based computer technology corporation said it earned $1.21 per share on revenue of $10.36 billion, topping analysts expectations of $1.11 per share on revenue of $10.21 billion.

The company said its cloud services and license support revenues were up 6% to $7.6 billion. Cloud license and on-premise license revenues were up 13% to $1.2 billion.

The company expects to earn $1.19 to $1.23 per share in the current quarter, higher than the Wall Street consensus estimates of $1.16. Revenue is expected to be $10.7 billion to $10.9 billion, above expectations of $10.56 billion, Reuters reported.

This resulted in very optimistic earnings expectations, prompting several equity analysts to raise their one-year price targets. Stifel raised the target price to $87 from $77. Deutsche Bank lifted the target price to $120 from $110. BMO upped the target price to $115 from $100. Citigroup increased the price target to $100 from $89. JP Morgan raised the target price to $110 from $89.

Following this, Oracle stock rose nearly 12% to $99.29 in pre-market trading on Friday. The stock surged over 37% so far this year.

Analyst Comments

“Database market is hot and Oracle riding the wave. One clear theme through CYQ3 prints this earnings season has been the very strong demand environment in the data management space, and with 16% YoY growth in their license business Oracle looks to have been a real beneficiary,” noted Keith Weiss, equity analyst at Morgan Stanley.

“Upside on revenues, better durability of margins and a solid pace of share repurchases kept EPS growth solidly in the mid-teens. Improving growth trends in the Cloud businesses at an improving scale starts to tip the scales on overall revenue growth, tilting the risk/reward more positively.”

Oracle Stock Price Forecast

Twenty-one analysts who offered stock ratings for Oracle in the last three months forecast the average price in 12 months of $97.94 with a high forecast of $125.00 and a low forecast of $66.00.

The average price target represents a 10.33% change from the last price of $88.77. Of those 21 analysts, seven rated “Buy”, 13 rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $87 with a high of $105 under a bull scenario and $57 under the worst-case scenario. The firm gave an “Equal-weight” rating on the enterprise software giant’s stock.

Technical analysis suggests it is good to buy as 150-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Check out FX Empire’s earnings calendar

Earnings Week Ahead: AutoZone, Campbell Soup, Lululemon and Broadcom in Focus

Earnings Calendar For The Week Of December 6

Monday (December 6)

Ticker Company EPS Forecast
SAIC Science Applications International $1.49
MDB MongoDB Inc -$0.38

 

Tuesday (December 7)

IN THE SPOTLIGHT: AUTOZONE

The Memphis, Tennessee-based auto parts retailer AutoZone is expected to report earnings per share of $20.78 in the fiscal first quarter, which represents year-over-year growth of about 12% from $18.61 per share seen in the same period a year ago.

The company, which is a major retailer and distributor of automotive replacement parts and accessories, is on track to beat earnings per share estimates again after having beaten it for 12 consecutive quarters. The company is expected to post revenue growth of about 6% to $3.33 billion.

The company is expected to earn $97.73 per share and generate $14.81 billion in revenue for the entire fiscal year, according to Zacks Research. These results demonstrate increases of 2.67 % and 1.22 % over last year, respectively.

“We see AutoZone (AZO) as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (~80% of sales),” noted Simeon Gutman, equity analyst at Morgan Stanley.

“In addition, its DIFM growth was accelerating pre-COVID-19 and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term. These advantages seem priced in currently.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 7

Ticker Company EPS Forecast
AZO AutoZone $20.71
AHT Ashtead Group £0.62
S Sprint -$0.18
TOL Toll Brothers $2.48
CASY Casey’s General Stores $2.79
HRB H&R Block -$0.94

 

Wednesday (December 8)

Ticker Company EPS Forecast
UNFI United Natural Foods $0.58
KFY Korn Ferry International $1.37
THO Thor Industries $2.70
RH Restoration Hardware $6.62
GEF Greif $1.47
GME GameStop -$0.52
CPB Campbell Soup $0.81

 

Thursday (December 9)

IN THE SPOTLIGHT: LULULEMON ATHLETICA, BROADCOM

LULULEMON: The Vancouver-based healthy lifestyle-inspired athletic retailer is expected to report its fiscal third-quarter earnings of $1.40 per share, which represents year-over-year growth of over 20% from $1.16 per share seen in the same period a year ago.

The apparel retailer would post year-over-year sales growth of about 28% to $1.43 billion. In the last two years, the company has beaten earnings per share (EPS) estimates most of the time.

Sales are expected to be $1.4-$1.43 billion in the third quarter of fiscal 2021, representing a two-year CAGR of 24-25%. The gross margin is expected to increase 50-100bps compared to the second quarter of fiscal 2019. The company expects adjusted earnings to be between $1.33 and $1.38 per share, compared with $1.16 in the prior-year quarter and 96 cents in the third quarter of fiscal 2019, according to ZACKS Research.

Net revenues are expected to reach $6.19-$6.26 billion for fiscal 2021 compared with $5.83-$5.91 billion earlier. Earnings per share will be $7.38-$7.48 versus $6.73-$6.86 previously mentioned.

Lululemon Athletica (LULU) is a long-term topline grower, supported by compelling secular tailwinds (e.g., performance/athleisure focus), a market share gain opportunity, & credible future revenue driver (e.g., international expansion, digital growth, & product innovation/expansion into new categories). The company’s recent MIRROR acquisition offers both revenue & profitability upside, as reflected in our bull case,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

LULU dominates the NA athletic yoga apparel category due to its unique brand positioning & fashionable products. Covid accelerated consumers health & wellness focus & fashion casualization, both of which should benefit LULU.”

BROADCOM: The chipmaker and software infrastructure supplier is expected to report its fiscal fourth-quarter earnings of $7.74 per share, which represents year-over-year growth of over 21% from $6.35 per share seen in the same period a year ago. The semiconductor manufacturer would post revenue growth of nearly 14% to $7.35 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 9

Ticker Company EPS Forecast
SMDS Ds Smith £16.10
FIZZ National Beverage $0.50
HRL Hormel Foods $0.50
CIEN Ciena $0.86
ORCL Oracle $1.11
LULU Lululemon Athletica $1.40
AVGO Broadcom Inc $7.74
MTN Vail Resorts -$3.66
COST Costco Wholesale $2.57

 

Friday (December 10)

No major earnings are scheduled for release.

Oracle Stock Is A Big Money Favorite

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Oracle has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the stock is trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares for years.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals ORCL has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Chart, histogram

Description automatically generated

Source: www.mapsignals.com

In 2021, the stock has attracted 18 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • 1-year outperformance vs. iShares Expanded Tech-Software ETF (+27.78% vs. IGV)

Outperformance is huge for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Oracle has been growing earnings rapidly. Take a look:

  • 3-year sales growth rate (+.56%)
  • 3-year earnings growth rate (+93.1%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, Oracle has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock saw buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

ORCL has a lot of qualities that are attracting Big Money. And going back to 2020, it’s made this list 5 times, with its first appearance on 9/22/2020… and gaining 49%. The blue bars below show the times that Oracle was a top pick:

Chart, histogram

Description automatically generated

Source: www.mapsignals.com

It’s been an all-star stock for years according to the MAPsignals process. I wouldn’t be surprised if ORCL makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

The Oracle rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no position in ORCL at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

For a look at all of today’s economic events, check out our economic calendar.

Why Oracle Stock Is Down By 4% Today

Oracle Stock Declines As Company’s Revenue Misses Analyst Estimates

Shares of Oracle found themselves under pressure after the company released its quarterly results. Oracle reported revenue of $9.73 billion and adjusted earnings of $1.03 per share, beating analyst estimates on earnings and missing them on revenue.

The company stated that its quarterly results were “excellent” but the market had another opinion as it focused on the revenue miss. It should be noted that Oracle stock was up by more than 35% since the beginning of this year before the release of the earnings report so the market expected healthy growth on both the top line and the bottom line.

It should be noted that the market has been in a bearish mood in recent trading sessions as traders continued to take profits near record highs. In this environment, it’s not surprising to see that the market is not happy with the fact that Oracle missed analyst estimates on revenue.

What’s Next For Oracle Stock?

Oracle stock faced strong resistance near the $90 level ahead of the release of the quarterly report, and it looks that it will need material upside catalysts to move above this level and get to the test of all-time highs.

Analysts expect that Oracle will report earnings of $4.61 per share in the current year and $5.12 per share in the next year, so the stock is trading at roughly 17 forward P/E.

These valuation levels do not look expensive in the current market environment, but it should be noted that earnings estimates showed no growth in recent weeks which is not good for a stock that is trading near all-time high levels.

The general market is clearly in a profit-taking mode right now which is typical for September, and it remains to be seen whether Oracle stock will be able to attract speculative traders in the upcoming trading sessions after the company’s quarterly revenue fell short of analyst estimates.

For a look at all of today’s economic events, check out our economic calendar.

Oracle Could Sell Off into the 70s

Oracle Corp. (ORCL) is trading lower by more than 2% in Tuesday’s pre-market after posting a fiscal Q1 2022 profit of $1.03 per-share, $0.06 better than estimates, while revenue rose a modest 3.8% year-over-year to $9.73 billion, matching consensus. Fusion ERP cloud revenue rose a healthy 32% while NetSuite ERP cloud revenue gained 28%. IaaS plus Saas cloud revenue of $2.5 billion booked 25% of total quarterly revenue, with cloud services and license support up a modest 6% to $7.4 billion.

Strong Cloud Growth

Inline Q2 earnings-per-share (EPS) guidance of $1.09 to $1.13 triggered a swift sell-the-news reaction, dropping the stock to the lowest low since late July.  However, Oracle has still gained nearly 35% so far in 2021 so the bearish reaction can be viewed as simple profit-taking, rather than a long-term change in trend. Even so, it’s now trading below the 50-day moving average for the first time since June, raising odds from even lower prices in coming sessions.

Executives boasted that cloud income has become a larger proportion of total revenue, noting that “Oracle’s two new cloud businesses, IaaS and SaaS, are now over 25% of our total revenue with an annual run rate of $10 billion. Taken together, IaaS and SaaS are Oracle’s fastest growing and highest margin new businesses. As these two cloud businesses continue to grow they will help expand our overall profit margins and push earnings per share higher.”

Wall Street and Technical Outlook

Wall Street consensus is rather bearish, with a ‘Hold’ rating based upon 5 ‘Buy’, 1 ‘Overweight’, 18 ‘Hold’, and 1 ‘Underweight’ recommendation. In addition, three analysts recommend that shareholders close positions. Price targets currently range from a low of $60 to a Street-high $115 while the stock is set to open Tuesday’s session about $2 above the median $85 target. This mid-range placement suggests that Oracle is fully-valued, especially with the mixed guidance.

Oracle failed a 2019 breakout above resistance in the low 50s in March 2020 and bounced strongly, returning to the prior peak in September. It cleared that barrier at year’s end, entering a heathy uptrend that stalled in the low 90s in July. An August breakout attempt failed, reinforcing a trading range that’s now set off weekly sell signals. The range floor below 88 is now being tested, raising odds for continued downside could reach the upper 70s in the fourth quarter.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Earnings Calendar Quiet Next Week; U.S. Inflation Print Could Dictate Market Trend

Earnings Calendar For The Week Of September 13

Monday (September 13)

IN THE SPOTLIGHT: ORACLE

The world’s largest database management company is expected to report its fiscal first-quarter earnings of $0.97 per share, which represents year-over-year growth of over 4% from $0.93 per share seen in the same period a year ago. The Austin, Texas-based computer technology corporation would post revenue of $9.8 billion.

Oracle’s current low valuation at ~16.7x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” noted Keith Weiss, equity analyst at Morgan Stanley.

“With management guiding to mid-single-digit CC revenue growth in a software sector filled with strong secular growth stories, and operating margins declining in FY22 due to heightened investment in Cloud, we remain Equal-weight while our price target moves up to $77.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 13

Ticker Company EPS Forecast
ORCL Oracle $0.97
HRB H&R Block -$0.34

 

Tuesday (September 14)

IN THE SPOTLIGHT: KASPIEN HOLDINGS

Kaspien Holdings, an American company that provides software and services for e-commerce, is expected to report a loss of 47 cents a share revenue of around $39 million in the fiscal second quarter.

U.S. Inflation Data: On September 14, the consumer price index is scheduled to be released. Global trends and inflation data will drive equity markets next week, which after a run of record-breaking trades have taken a breather. If the data continues to be hot, Treasury yields could rise, which would be negative for the market.

“High inflation is also a reason to justify a Fed taper. Headline CPI is likely to remain close to 5.5% year-on-year this week with core inflation remaining at 4.3%. Given ongoing supply issues, rising labour costs and a clear sense of strong corporate pricing power – note the latest Federal Reserve Beige Book stated “several Districts indicated that businesses anticipate significant hikes in their selling prices in the months ahead” – we see little reason for inflation to fall meaningfully before 2Q 2022,” noted James Knightley, Chief International Economist at ING.

“The risk is that rising inflation expectations keeps it higher. Consequently, we continue to look for the Federal Reserve to conduct a swift taper with asset purchases ending in 2Q and interest rates increasing from late 2022 onwards.”

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

Ticker Company EPS Forecast
JD Jd Sports Fashion -£3.35

 

Wednesday (September 15)

Ticker Company EPS Forecast
JKS JinkoSolar Holding Co. Ltd. ADR -$1.03
RDW Redrow £0.17

 

Thursday (September 16)

Ticker Company EPS Forecast
AHT Ashtead Group £0.51

 

Friday (September 17)

No major earnings are scheduled for release

The Biggest Risk To Economic Growth. Should You Still Buy The Dip?

In fact, the all-time record for new highs in one year is 77, set in 1995. Trend watchers note that 2021 is only the 11th time since 1928 that the S&P 500 has rallied +20% or more during the first 8 months of the year. In all but the two big market crash years of 1929 and 1987, the S&P 500 managed to hold a solid double-digit gain into year-end, according to Bank of America research.

Bears vs bulls

Bears, however, are quick to point out that the S&P 500 hasn’t had a pullback of at least -5% or more during the entire climb higher this year, something that generally happens about three times a year. Typically, corrections of -5% to -10% are considered healthy. Bears of course believe stocks are wildly overvalued due in large part to the Federal Reserve’s monetary supports and “easy money”. Once the Fed starts reducing its asset purchases and lifting interest rates, bears believe investors will take a more “risk off” attitude and the bull rally in stock markets will correct to some degree.

Overall, bulls seem comfortable with the Fed beginning its asset purchase “taper” later this year and that is partially due to Fed Chair Jerome Powell’s insistence that the economy “still has much ground to cover” before rate hikes are on the table. Bulls are also anticipating a second shot at a “reopening boom” after the current wave of coronavirus has passed. Remember, this wave cut short the Covid-free summer spending surge that everyone had been anticipating so bulls believe this pent-up demand is going to be spent in the quarters ahead.

What to watch?

The biggest risk to economic growth right now is not on the demand side but rather on the supply side as shortages for everything across the board are limiting the amount of goods and services available. Demand amid the summer Covid surge has cooled a bit, which may be a good thing in the long run as it’s given some manufacturers a minute to catch up. And again, bulls believe this is creating just another layer of pent up demand that consumers will satisfy down the road.

Turning to next week, remember that U.S. stock, bond, and commodity markets are closed on Monday, September 6 for the Labor Day holiday. The short week will also be light on data with just the Fed’s Beige Book and July Consumer Credit on Wednesday, and the Producer Price Index on Friday. Next week’s earnings will include Casey’s General Store, Lululemon, GameStop, Oracle, Z-Scaler, Academy Sports, and Kroger to name a few.

SP500 analysis

Sp500 rallied despite weak NFP. There is only one reason for such reaction – the Federal Reserve still cannot move to tighten monetary policy. However, the Cycles forecast the best buying dip opportunity in October if other conditions will be there. We certainly can’t judge now if it is going to be conformed by other tools.

sp500 cycles september 2021

We have bearish ADL divergence on a daily chart and potentially it will play well and create a buying opportunity in October. However, I have to say there is still good accumulation in this market. So, I believe if this market gives a sell signal in September, traders should cash out their positions quite quickly. We are in a strong bull trend and so far all fundamentals still support the stock market.

ES ##-## (Daily) 2021_09_06 (2_51_28 AM)

Weekly Earnings Preview: GameStop, Lululemon Athletica, Oracle and Kroger in Focus

Earnings Calendar For The Week Of September 6

Monday (September 6)

Ticker Company EPS Forecast
DPH Dechra Pharma £47.90
SMAR Smartsheet Inc. -$0.13
SUMO Sumo -$0.14

Tuesday (September 7)

Ticker Company EPS Forecast
CASY Casey’s General Stores $2.99

Wednesday (September 8)

IN THE SPOTLIGHT: GAMESTOP, LULULEMON ATHLETICA

GAMESTOP: The world’s largest multichannel video game retailer is expected to report its fiscal second-quarter loss of -$0.67 per share, an improvement from a loss of -$1.40 per share seen in the same period a year ago.

The Grapevine, Texas-based company would post year-over-year revenue growth of about 20% year-on-year to around $1.1 billion. EPS estimates have been exceeded twice in the last four quarters.

LULULEMON ATHLETICA: The Vancouver-based retailer healthy lifestyle-inspired athletic retailer is expected to report its fiscal second-quarter earnings of $1.18 per share, which represents year-over-year growth of about 60% from $0.74 per share seen in the same period a year ago. The apparel retailer would post year-over-year sales growth of about 50% to $1.34 billion.

Lululemon Athletica (LULU) is a LT topline grower, supported by compelling secular tailwinds (e.g., performance/athleisure focus), a market share gain opportunity, & credible future revenue driver (e.g., international expansion, digital growth, & product innovation/expansion into new categories). The company’s recent MIRROR acquisition offers both revenue & profitability upside, as reflected in our bull case,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

LULU dominates the NA athletic yoga apparel category due to its unique brand positioning & fashionable products. Covid accelerated consumers health & wellness focus & fashion casualization, both of which should benefit LULU.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 8

Ticker Company EPS Forecast
DNLM Dunelm Group £3.00
KFY Korn Ferry International $1.07
CPRT Copart $0.91
GME GameStop -$0.67
RH Restoration Hardware $6.48
ABM ABM Industries $0.81
AVAV AeroVironment -$0.24
LULU Lululemon Athletica $1.18

Thursday (September 9)

IN THE SPOTLIGHT: ORACLE

The world’s largest database management company is expected to report its fiscal first-quarter earnings of $0.97 per share, which represents year-over-year growth of over 4% from $0.93 per share seen in the same period a year ago. The Austin, Texas-based computer technology corporation would post revenue of $9.8 billion.

Oracle‘s current low valuation at ~16.7x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” noted Keith Weiss, equity analyst at Morgan Stanley.

“With management guiding to mid-single-digit CC revenue growth in a software sector filled with strong secular growth stories, and operating margins declining in FY22 due to heightened investment in Cloud, we remain Equal-weight while our price target moves up to $77.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 9

Ticker Company EPS Forecast
MRW Morrison Supermarkets £5.77
ASO Avesoro Resources $1.38
VRNT Verint Systems $0.42
FIZZ National Beverage $0.52

Friday (September 10)

IN THE SPOTLIGHT: KROGER

Kroger, one of the world’s largest food retailers, is expected to report its fiscal second-quarter earnings of $0.64 per share, which represents a year-over-year decline of over 12% from $0.73 per share seen in the same period a year ago.

The retailer, which operates over 2,500 supermarkets in the U.S., would post revenue of 30.4 billion, down about -0.3% year on year. However, it is worth noting that in the last four quarters, on average, the company has beaten earnings estimates over 21%.

Best Dividend Stocks August 2021

The hallmark way I go about finding the best dividend stocks…the outliers is by looking for quiet Big Money trading activity. Oftentimes, that can be institutional activity. I’ll go over why following the Big Money is so important in a bit. But, the 5 stocks I see as long-term dividend growth candidates are MA, SHW, WSM, EBAY, & ORCL.

Over decades, I’ve learned that the true tell on great stocks is that big money consistently finds its way into the best companies out there… especially dividend paying stocks. Some of the biggest returns ever have come from holding stocks for many years and reinvesting dividends.

I want the odds on my side when looking for the highest quality dividend stocks…and I own many of them.

So, let’s get into it.

Up first is Mastercard Inc. (MA), which is a large credit card company. They’ve been raising their dividend for years.

Let’s first start with the technical picture.

When deciding on a strong candidate for long-term dividend growth, I look for stocks leading in price:

  • 1-month performance (+7.08%)
  • Historical Big Money buy signals

Below are the Big Money signals Mastercard has made since 2015. Blue bars are showing that MA was seeing big buy activity according to MAPsignals. Typically, the more Big Money signals, the stronger the stock:

Chart, histogramDescription automatically generated
Source: MAPsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Mastercard has a strong dividend history:

  • 3-year dividend growth rate (+45.7%)
  • Current dividend per share = .44
  • Forward yield = .45%
  • 3-year earnings growth rate (+25.12%)

Next up is Sherwin-Williams Co. (SHW), which is a leading seller of paint materials. They’ve also been a dividend grower for years.

When deciding on a strong candidate for long-term dividend growth, it’s a good idea to look for many years of dividend increases.

Now let’s look at the recent performance:

  • 1-month performance (+4.95%)
  • Historical big money signals

Below are the big money signals that Sherwin-Williams has made since 2015. I expect more buy signals in the years to come.

Chart, histogramDescription automatically generated
Source: MAPsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Sherwin-Williams has a nice dividend history. Their earnings growth has been stellar as well:

  • 3-year dividend growth rate (+16%)
  • Current dividend per share = .55
  • Forward yield = .77%
  • 3-year earnings growth rate (+11.87%)

Next, I’m looking at Williams-Sonoma, Inc. (WSM), which is a leading home retailer company. They have a solid dividend history.

When deciding on a strong candidate for long-term dividend growth, recent underperformance is not a bad thing:

  • 1-month performance (-1.15%)
  • Historical Big Money signals

Below are the big money signals that Williams-Sonoma has made since 2015. It’s recently showed a Big Money buy signal:

Chart, histogramDescription automatically generated
Source: MAPsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, WSM has a strong dividend history:

  • 3-year dividend growth rate (+9%)
  • Current dividend per share = .59
  • Forward yield = 1.5%
  • 3-year earnings growth rate (+46.58%)

Next, I’m looking at eBay, Inc. (EBAY), which is a leading online auction marketplace. They recently added a dividend.

When deciding on a strong candidate for long-term dividend growth, recent outperformance is great:

  • 1-month performance (+6.86%)
  • Recent Big Money signals

Below are the Big Money signals that eBay has made since 2015.

Chart, histogram

Description automatically generated

On top of technicals, when deciding on the best dividend stock, let’s check up on the fundamentals. As you can see, eBay has recently started paying a dividend.

  • 1-2 year dividend growth rate (+14%)
  • Current dividend per share = .18
  • Forward yield = .98%
  • 3-year earnings growth rate (+130.48%)

Lastly, I’m looking at Oracle Corp. (ORCL), which is a leading enterprise technology company. They’ve been growing their dividend for years.

When deciding on a strong candidate for long-term dividend growth, I like to look for recent leaders:

  • 1-month performance (+12.11%)
  • Recent Big Money signals

Below are the Big Money signals that ORCL has made since 2015.

ChartDescription automatically generated
Source: MAPsignals.com

On top of technicals, when deciding on the best dividend stock, you gotta see if the fundamental picture supports a long-term investment. Oracle has been a steady grower:

  • 3-year dividend growth rate (+11%)
  • Current dividend per share = .32
  • Forward yield = 1.46%
  • 3-year earnings growth rate (+93.1%)

The Bottom Line

MA, SHW, WSM, EBAY, & ORCL represent solid dividend choices. Given the strong historical dividend growth and Big Money signals, these stocks could be worth an extra look for a dividend investor.

Disclosure: the author holds no positions in MA, SHW, WSM, EBAY, & ORCL at the time of filming.

To learn more about the MAPsignals process, click here: www.mapsignals.com

Disclaimer

Oracle Cloud Initiative Could End Uptrend

Oracle Corp. (ORCL) is trading lower by more than 5% in Wednesday’s pre-market after beating fiscal Q4 2021 estimates and lowering Q1 2022 profit guidance. The software giant earned a respectable $1.54 per-share during the quarter, beating estimates by $0.21, while revenue rose 7.5% year-over-year to $11.23 billion, nearly $200 million higher than consensus. Shareholders hit the exits after the company warned it would “roughly double its Cloud CapEx spending in fiscal year 2022 to nearly $4 billion”.

Investing Revenue in Cloud Growth

Cloud computing is more profitable than overall business operations and Oracle is trying to increase market share and improve margins going forward. As a result, it’s “confident that the increased return in the Cloud business more than justifies this increased investment and margins will expand over time”.  However, disappointed investors held a less bullish view, voting with their feet to exit positions.

Success in the new investment is no sure thing because Oracle’s transition into cloud computing has been slower than its rivals, who have already built large and diverse customer bases.. As a result, it will be hard to take market share from Amazon.Com Inc.’s (AMZN) AWS or Microsoft Corp’s (MSFT) Azure in coming quarters, raising doubts about the initiative. In addition, while this high tech venue is growing at a rapid rate, so is competition, with many operations throwing their hats into the ring.

Wall Street and Technical Outlook

Wall Street consensus is skeptical as well, with a ‘Hold’ rating based upon 5 ‘Buy’, 1 ‘Overweight’, and 18 ‘Hold’ recommendations. In addition, three analysts recommend that shareholders close positions and move to the sidelines. Price targets currently range from a low of $60 to a Street-high $115 while the stock is set to open Wednesday’s session about $2 above the median $75 target. This mid-range placement suggests that Oracle is now fully-valued.

Oracle failed a 2019 breakout over the 2017 high at 53.14 during 2020’s pandemic decline and turned higher, breaking out in the fourth quarter. The uptick added more than 40% into early June’s all-time high at 85.03, ahead of a pullback that’s now accelerating to the downside. The decline has settled on the 50-day moving average in the pre-market, generating the first test since February, It’s likely to hold for now but the stock may be headed into months of sideways action.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Oracle Shares Slump As Earnings Guidance Misses Estimates

Oracle Corporation shares slumped about 5% in extended trading on Tuesday after the world’s largest database management company called for a lower earnings outlook for the fiscal first quarter than equity analysts had previously expected.

The Austin, Texas-based computer technology corporation reported earnings per share of $1.54 per share, beating analysts’ expectations of $1.31 per share. The company’s revenue came in at $11.23 billion, topping the Wall Street consensus estimates of $11.04 billion.

According to CNBC, Oracle CEO Safra Catz called for $0.94 to $0.98 in adjusted earnings per share and 3% to 5% revenue growth in the fiscal first quarter, lower than the market expectations of $1.03 per share.

Oracle Corporation shares slumped about 5% to $77.75 in extended trading on Tuesday. The stock rose over 26% so far this year.

Analyst Comments

“Strong momentum in back-office apps and a pick-up in bookings growth gives management confidence to increase investment ahead of a potential acceleration in revenue growth. However, investors likely need more evidence in the numbers before pushing multiples higher, leaving share range-bound,” noted Keith Weiss, equity analyst at Morgan Stanley.

Oracle Stock Price Forecast

Ten analysts who offered stock ratings for Oracle in the last three months forecast the average price in 12 months of $76.10 with a high forecast of $93.00 and a low forecast of $54.00.

The average price target represents a -6.79% from the last price of $81.64. Of those 10 analysts, two rated “Buy”, eight rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast to $77 from $73 with a high of $90 under a bull scenario and $58 under the worst-case scenario. The firm gave an “Equal-weight” rating on the database management company’s stock.

Oracle’s current low valuation at ~16.7x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” Morgan Stanley’s Weiss added.

“With management guiding to mid-single-digit CC revenue growth in a software sector filled with strong secular growth stories, and operating margins declining in FY22 due to heightened investment in Cloud, we remain Equal-weight while our price target moves up to $77.”

Several other analysts have also updated their stock outlook. Jefferies assumed coverage with hold rating and raised the target price to $80 from $75. JP Morgan lifted the target price to $77 from $73. Barclays increased the target price to $83 from $80. Piper Sandler increased the target price to $80 from $57.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Oracle, H&R Block, Lennar and Adobe in Focus

Earnings Calendar For The Week Of June 14

Monday (June 14)

Ticker Company EPS Forecast
PDCO Patterson Companies $0.51
EV Eaton Vance $0.92
MIK Michaels Companies $0.30

Tuesday (June 15)

IN THE SPOTLIGHT: ORACLE

ORACLE: The world’s largest database management company is expected to report its fiscal fourth-quarter earnings of $1.31 per share, which represents year-over-year growth of over 9% from $1.20 per share seen in same period a year ago.

The Austin, Texas-based computer technology corporation would post revenue growth of more than 6% to $11.07 billion. In the last four quarters, on average, Oracle has beaten earnings estimates about 6%.

Oracle’s current low valuation at ~14x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” noted Keith Weiss, equity analyst at Morgan Stanley.

“We see 16% EPS growth in FY21 and 6% in FY22, driven by an aggressive pace of share buybacks. However, cc revenue growth is ~2%, in a software sector filled with strong secular growth stories, and just 2% operating income growth points to Oracle potentially reaching peak margins, leaving us Equal-weight at our $73 PT.”

H&R Block: The largest tax provider in the U.S. in terms of offices and revenues is expected to report its fiscal fourth-quarter earnings of $5.07 per share, which represents year-over-year growth of over 68% from $3.01 per share seen in the same period a year ago.

The tax preparation company operating in Canada, the United States, and Australia would post revenue growth of over 32% to around $2.4 billion.

HRB’s core business of assisted tax prep has seen declining volumes over the last 8 years, which we expect to continue this year. We expect the assisted business to remain under pressure given the industry shift toward DIY offerings, with a modest offset from HRB’s own growing DIY business,” noted Jeffrey Goldstein, equity analyst at Morgan Stanley.

“Recent acquisition Wave Financial could be a driver of long-term upside but limited synergies and competitive market makes it hard to prove ROI. HRB generates a high degree of FCF with share buybacks driving double-digit-digit EPS growth in the out years of our model. The stock trades at an attractive normalized FCF yield which suggests the stock could re-rate significantly by improving volumes.”

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

Ticker Company EPS Forecast
ORCL Oracle $1.31
HRB H&R Block $5.07
AHT Ashtead Group £0.29
HDS HD Supply Holdings $0.34

Wednesday (June 16)

IN THE SPOTLIGHT: LENNAR

The Miami-based home construction company is expected to report its first-quarter earnings of $2.37 per share, which represents year-over-year growth of over 40% from $1.65 per share seen in same period a year ago.

The United States’ leading homebuilders would post revenue growth of about 17% to $6.16 billion.

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

Ticker Company EPS Forecast
LEN Lennar $2.37
KFY Korn Ferry International $0.98

Thursday (June 17)

IN THE SPOTLIGHT: ADOBE

The U.S. multinational computer software company is expected to report its fiscal second-quarter earnings of $2.81 per share, which represents year-over-year growth of about 15% from $2.45 per share seen in same period a year ago.

The San Jose, California-based software company would post year-over-year revenue growth of over 19% to $3.73 billion.

Adobe has leading market share in some of the most dynamic secular growth areas in software: creative design, dynamic media, and marketing automation. As such, we see the longer-term growth story for ADBE as better than most,” noted Keith Weiss, equity analyst at Morgan Stanley.

“With a large recurring rev base and operating margin improvements expected (as margin pressure from recent acquisitions comes to an end), we expect 20%+ EBIT CAGR from FY20-FY22 and believe this durable growth is not fully reflected in shares. Our $575 PT is based on 41x CY22e EPS of $13.96, which implies ~2.3x PEG on 16% EPS CAGR from FY20-FY22e.”

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

Ticker Company EPS Forecast
JBL Jabil Circuit $1.04
ADBE Adobe Systems $2.81
KR Kroger $0.98
CMC Commercial Metals $0.84

Friday (June 18)

There are no major earnings scheduled

Why Shares Of Oracle Are Down By 8% Today?

Oracle Video 11.03.21.

Oracle Stock Falls After The Release Of Quarterly Report

Shares of Oracle gained strong downside momentum and are down by 8% in today’s trading session after the company provided its quarterly report.

Oracle reported revenue of $10.1 billion and GAAP EPS of $1.68 per share, beating analyst estimates on both earnings and revenue. The company announced that it increased its quarterly dividend from $0.24 per share to $0.32 per share.

At current levels, the stock yields 2.13%. While this yield is not sufficient enough to attract yield-hunters, the 33.3% increase of the dividend was certainly good news for current shareholders.

In addition to raising the dividend, the company’s Board of Directors increased the share repurchase program by $20 billion.

Interestingly, solid results, higher dividend and the increase of share repurchase program failed to provide support to the stock which found itself under strong pressure after the release of the quarterly report.

What’s Next For Oracle?

Shares of Oracle rallied at the beginning of March on expectations of a strong quarterly report. The report brought good news, but it was not sufficient enough for investors who remained focused on finding high-growth companies.

The stock traded at all-time high levels before the release of the quarterly report, and it looks that the market expected more than a dividend increase and an expansion of the share buyback program.

At the same time, it should be noted that Oracle offers stable growth and reasonable valuation compared to many peers. The stock is trading at less than 15 forward P/E which may attract investors who are searching for cheaper plays in the tech sector.

While the market has generally favored higher-growth, expensive stocks in recent years, the situation may change if Treasury yields continue to move higher and traders start to pay more attention to valuations. In this scenario, shares of Oracle will likely get additional support.

For a look at all of today’s economic events, check out our economic calendar.

Oracle Shares Slump in After-Hours Trading as Cloud Revenue Misses Estimates

Oracle Corporation, the world’s largest database management company, reported a better-than-expected profit in the fiscal third quarter but missed analysts’ estimates for revenue from cloud services and licenses, sending its shares down over 5% in extended trading on Wednesday.

Austin, Texas-based computer technology corporation said its total quarterly revenues were up 3% year-over-year to $10.1 billion, slightly above the Wall Street consensus estimates of $10.07 billion. Non-GAAP net income was up 10% to $3.5 billion, and non-GAAP earnings per share was up 20% to $1.16 per share, beating analysts’ forecasts of $1.11 per share.

However, cloud services and license support revenues were up 5% to $7.25 billion, slightly missing the market expectations of $7.27 billion.

That pushed Oracle shares, which surged more than 20% in 2020, down over 5% to $68.3 in extended trading on Wednesday.

“Shares are down 7% upon results to $67 per share, which we believe is a correction for unfounded exuberance this past year. Despite the market’s reaction, fourth-quarter guidance was better than we expected, which has led us to improve top-line assumptions over the next five years. As a result, we are raising our fair value estimate to $58 per share from $53 per share for narrow-moat Oracle,” said Julie Bhusal Sharma, equity analyst at Morningstar.

Oracle increased the authorization for share repurchases by $20 billion. Oracle also announced that its Board of Directors declared a quarterly cash dividend of $0.32 per share of outstanding common stock, reflecting a 33% increase over the current quarterly dividend of $0.24.

Oracle Stock Price Forecast

Fourteen analysts who offered stock ratings for Oracle in the last three months forecast the average price in 12 months of $72.00 with a high forecast of $82.00 and a low forecast of $57.00.

The average price target represents a -0.17% decrease from the last price of $72.12. Of those 14 analysts, six rated “Buy”, seven rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $73 with a high of $90 under a bull scenario and $48 under the worst-case scenario. The firm gave an “Equal-weight” rating on the computer technology corporation’s stock.

“Strong cloud momentum in back-office applications and database tech still falls short of driving a meaningful acceleration in total revenues. While a low multiple, share repurchases, and a dividend increase keep the value story intact, investors looking for a rebound story are likely disappointed,” said Keith Weiss, equity analyst at Morgan Stanley.

Several other analysts have also updated their stock outlook. Oracle had its price target boosted by stock analysts at Cowen to $77 from $70. The firm presently has an “outperform” rating on the enterprise software provider’s stock. Cowen’s price objective would suggest a potential upside of 7.95% from the company’s previous close. Barclays raised shares to an “overweight” rating from an “equal weight” and lifted their price objective to $80 from $66.

Moreover, Bank of America issued a “neutral” rating and a $68 price objective. Citigroup issued a “neutral” rating and a $65 price objective for the company. Credit Suisse Group raised their target price to $75 from $67 and gave the stock an “outperform” rating.

Analyst Comments

Oracle’s current low valuation at 14x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” Morgan Stanley’s Weiss added.

“We see 16% EPS growth in FY21 and 6% in FY22, driven by an aggressive pace of share buybacks. However, cc revenue growth is 2%, in a software sector filled with strong secular growth stories, and just 2% operating income growth points to Oracle potentially reaching peak margins, leaving us ‘Equal-weight’ at our $73 price target.”

Upside and Downside Risks

Risks to Upside: Stronger adoption of Autonomous Database offering drives positive YoY growth in License revenues. Accelerated adoption of Fusion Apps -highlighted by Morgan Stanley.

Risks to Downside: Disruptive technologies in the data management market. Rapid migration towards the SaaS-based subscription application model hurts near-term optics due to ratable revenue recognition. Strong competition from other secular Cloud application vendors.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: MongoDB, Campbell Soup, JD.com and Oracle in Focus

Earnings Calendar For The Week Of March 8

Monday (March 8)

Ticker Company EPS Forecast
PSON Pearson £32.79
CASY Casey’s General Stores $0.95
YQ M17 Entertainment -$0.06
GOCO Gocompare.Com $0.47
DM Dominion Midstream Partners -$0.06
YALA Yalla $0.12

 

Tuesday (March 9)

IN THE SPOTLIGHT: MONGODB

MongoDB Inc, which provides an open-source database platform for automating, monitoring, and deployment backups, is expected to report a loss of $0.39 per share in the fourth quarter, which represents a year-over-year decline of 56% from -$0.25 per share seen in the same quarter a year ago. However, in the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 30%.

New York City-based company would post year-over-year revenue growth of over 27% to $156.97 million.

MongoDB has established itself as one of the most popular databases to support the development of modern net-new apps. Into CY21, we see the business at a crucial inflection point. First, it is poised to garner the majority of revs from its public cloud business – the segment where market growth and share gains are the strongest. Second, the acceleration in customer adds suggests that its go-to-market model has matured to scale a modern, cloud-first business,” said Sanjit Singh, equity analyst at Morgan Stanley.

“As a result, an equation for durable 30%+ growth emerges (20%+ customer base growth with near 120% net-expansion from the existing base) – a growth story that does not look overly demanding given the strategic nature of this asset.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 9

Ticker Company EPS Forecast
SLA Standard Life Aberdeen PLC £6.04
CMD Cantel Medical Corp $0.51
NAV Navistar International $0.01
DQ Daqo New Energy $1.12
THO Thor Industries $1.57
DKS Dick’s Sporting Goods $2.24
OSH Oak Street Health -$0.23
ABM ABM Industries $0.59
AVAV AeroVironment $0.00
MDB MongoDB Inc -$0.39
HRB H&R Block -$1.19
CLNE Clean Energy Fuels $0.00
ADOOY Adaro Energy ADR $0.05
ITV ITV £5.82

 

Wednesday (March 10)

IN THE SPOTLIGHT: CAMPBELL SOUP

CAMPBELL SOUP: Camden County, New Jersey-based processed food and snack company is expected to report a profit of $0.83 per share in the fiscal second quarter, which represents year-over-year growth of over 15% from $0.72 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 9%. One of the world’s top soup makers would post year-over-year revenue growth of over 6% to $2.3 billion.

“High exposure to secularly challenged soup category: Shelf-stable soup (26.5% of sales) faces headwinds given shifts in preferences toward better-for-you and fresh foods, competition from private label, and pricing pressure. Snacking brands are well-positioned, but face competitive pressures: Milano, Goldfish, Farmhouse, and Snyder’s-Lance have strong brand equity but face high competition from PEP and MDLZ,” said Pamela Kaufman, equity analyst at Morgan Stanley.

“Significant organizational changes over last two years refocused the company and show promise: Divesting non-core businesses and new leadership refreshes the company’s strategic plan, allowing the company to focus on its key segments and geographies.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 10

Ticker Company EPS Forecast
VERX Vertex Inc. Cl A $0.07
CPB Campbell Soup $0.83
AMC AMC Entertainment -$3.39
SUMO Sumo -$0.12
CLDR Cloudera Inc. $0.11
FNV Franco Nevada $0.70
VNET 21Vianet $0.05
BAK Braskem $1.05
SMTC Semtech $0.48

 

Thursday (March 11)

IN THE SPOTLIGHT: JD.COM, ORACLE

JD.COM: Chinese e-commerce platform JD.com is expected to report a profit of $0.22 in the fourth quarter, which represents year-over-year growth of over 177% from $0.08 per share seen in the same quarter a year ago.

The leading B2C e-commerce player in China, which accounts for over 20% of China’s total B2C online market and over 50% of the online direct sales market, would post year-over-year revenue growth of about 35% to $33.1 billion.

JD’s recent accelerated moves in Community Group Buying business could leverage its advantages in the e-commerce supply chain. Its fast-growing businesses could bring incremental growth momentum into 2021. Maintain Overweight,” said Eddy Wang, equity analyst at Morgan Stanley.

“We forecast that JD’s total revenue will grow 29% YoY in 4Q20, driven by strong demand for electronics and home appliance consumption during promotion season, as well as sustainable strong demand for online FMCG (i.e., JD’s GMV grew 33% YoY during the Double 11 promotion period). Meanwhile, we expect JD to increase its reinvestment to boost consumption in 4Q20, which could drag on its 4Q margin; as such, we forecast that JD’s 4Q20 non-GAAP net margin will reach 0.97% (vs. 0.5% in 4Q19 and 3.19% in 3Q20).”

ORACLE: Austin, Texas-based computer technology corporation is expected to report a profit of $1.11 in the fiscal third quarter, which represents year-over-year growth of over 14% from $0.97 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 5%. One of the largest vendors in the enterprise IT market would post $10.06 billion in sales for the current fiscal quarter, according to Zacks Investment Research. On average, analysts expect that Oracle will report full-year sales of $40.02 billion for the current year, with estimates ranging from $39.44 billion to $40.33 billion.

Oracle’s current low valuation at 13x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” Keith Weiss, equity analyst at Morgan Stanley.

“We see 15% EPS growth in FY21 and 6% in FY22, driven by an aggressive pace of share buybacks. However, cc revenue growth is 2%, in a software sector filled with strong secular growth stories, and just 2% operating income growth points to Oracle potentially reaching peak margins, leaving us Equal-weight at our $67 price target.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 11

Ticker Company EPS Forecast
JD JD.com $0.22
ULTA Ulta Salon Cosmetics Fragrance $2.18
MTN Vail Resorts $2.03
DOCU DocuSign Inc. $0.22
WPP WPP ADR $2.75
ORCL Oracle $1.11
CELH Celsius $0.03

 

Friday (March 12)

Ticker Company EPS Forecast
SHCAY Sharp ADR $0.08
EBR Centrais Eletricas Brasileiras $0.24