Wall Street Week Ahead: Lennar, FedEx, Dollar General, GameStop and Fed’s Policy in Focus

The Ukraine-Russia crisis continued to dominate market movements, causing extreme volatility in the financial market and pushing the oil prices to a decade high and depressing stocks.

The U.S. Federal Reserve is widely expected to hike by 25 basis points to 0.25%-0.5% on Wednesday. Still, analysts will closely monitor inflation and the economic growth outlook and how the central bank projects future rate increases. The fear of a vicious cycle of low growth and higher inflation could deter the Fed from raising rates faster than expected previously.

Last week, the S&P 500 dropped 2.9%. Stocks in the energy sector were the top performers, up nearly 1.9%. Energy stocks have rallied on concerns about tightening supplies that have driven up oil and gas prices. The rally would likely continue this week.

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

Earnings By Day

Earnings Calendar For The Week Of March 14

Monday (March 14)

TICKER COMPANY EPS FORECAST
CVGW Calavo Growers $-0.01
CORR CorEnergy Infrastructure Trust $0.37
MTN Vail Resorts $5.73

 

Tuesday (March 15)

TICKER COMPANY EPS FORECAST
CAL Caleres $0.46
CHMI Cherry Hill Mortgage Investment $0.28
IHS IHS Holding $0.04
KNDI Kandi Technologies Group $-0.07

 

Wednesday (March 16)

IN THE SPOTLIGHT: LENNAR

The home construction and real estate company Lennar is expected to report earnings per share of $2.80 in the fiscal first quarter, which represents year-over-year growth of over 37% from $2.04 per share seen in the same period a year ago.

The Miami, Florida-based company would post year-over-year revenue growth of more than 16% to around $6.2 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“2020-2021 proved to be strong years for the U.S. housing market despite the COVID-19 pandemic. We believe favourable demographics will support steady residential construction activity this decade, with annual housing starts averaging 1.6 million units. We expect first-time buyers will be a key driver of future housing demand, and Lennar is well-positioned to capture these potential buyers with its increased mix of entry-level homes,” noted Brian Bernard, Sector Director at Morningstar.

Lennar controls an ample land supply, which affords the company the ability to meet future demand while focusing on improving cash flows and maintaining a strong balance sheet. The company has shifted to a lighter land acquisition strategy, which seeks to reduce the amount of capital tied up in land by purchasing smaller land parcels and relying more on land options to acquire land on a just-in-time basis. We think this strategy should help the company realize better returns on invested capital and cash flows over the business cycle.”

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
GES Guess? $1.16
JBL Jabil $1.24
LE Lands’ End $0.33
SMTC Semtech $0.49

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

Thursday (March 17)

IN THE SPOTLIGHT: FEDEX, GAMESTOP, DOLLAR GENERAL

FEDEX: The Memphis, Tennessee-based multinational delivery services company FedEx is expected to report its fiscal third-quarter earnings of $4.47 per share, which represents year-over-year growth of over 28% from $3.47 per share seen in the same period a year ago.

The delivery firm would post revenue growth of over 9% to $23.58 billion. It is worth noting that the company has beaten earnings estimates only twice in the last four quarters.

“We are estimating adjusted EPS of $4.76, above the $4.69 consensus. FedEx (FDX) beat on the top and bottom lines last quarter as demand held in while costs remained manageable. We expect most strategic questions to be deferred to the June 28 /29 investor day,” noted Helane Becker, equity analyst at Cowen.

GAMESTOP: The world’s largest multichannel video game retailer GameStop is expected to report its fourth-quarter earnings of $1.06 per share, an improvement from a loss of -$1.39 per share seen in the third quarter. The Grapevine, Texas-based company is forecast to post year-over-year revenue growth of about 4% to around $2.2 billion.

DOLLAR GENERAL: The discount retailer is expected to report earnings per share of $2.59 in the fourth quarter of 2021, which represents a year-over-year decline of over 1.1% from $2.62 per share seen in the same period a year ago.

The Goodlettsville Tennessee-based company is expected to post a net income of $8.69 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. The ’22 investment setup is less favourable given decelerating momentum from recent initiatives, a tougher macro backdrop, and ramping expense pressures (particularly on labour). Street estimates look full/fair with less upside potential in our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

Dollar General’s (DG) valuation (~20x P/E multiple) is in-line with the market and screens relatively fair vs both relative and absolute history. Emerging initiatives (Popshelf, healthcare, produce) are longer-term drivers but likely won’t move the needle in ’22.”

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
ACN Accenture $2.36
DG Dollar General $2.59

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

Friday (March 18)

No major earnings are scheduled for release.

FedEx Is Well Worth Watching Ahead of Q3 Earnings

The Memphis, Tennessee-based multinational delivery services company FedEx is expected to report its fiscal third-quarter earnings of $4.47 per share, which represents year-over-year growth of over 28% from $3.47 per share seen in the same period a year ago.

The delivery firm would post revenue growth of over 9% to $23.58 billion. It is worth noting that the company has beaten earnings estimates only twice in the last four quarters.

“We are estimating adjusted EPS of $4.76, above the $4.69 consensus. FedEx (FDX) beat on the top and bottom lines last quarter as demand held in while costs remained manageable. We expect most strategic questions to be deferred to the June 28 /29 investor day,” noted Helane Becker, equity analyst at Cowen.

At the time of writing, FedEx stock traded 2.51% lower at $213.77 on Friday. The stock tumbled more than 17% so far this year after falling 0.4% in 2021.

Analyst Comments

“We expect a miss for F3Q22 as ongoing pandemic tailwinds are offset by headwinds from Omicron, weather and labour challenges. The sentiment is cautious and the stock has underperformed but the risk to numbers (esp. FY23/24) remains high and we will not have answers until the June analyst day,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“We see EBIT growth slightly down in FY22 as volume pandemic related tailwinds begin to fade and the company grapples with very difficult comps. We continue to see secular threats to Parcel and remain skeptical that these trends will be sustainable but believe that until there is evidence of a reversal in earnings momentum, the stock can trade at its historical multiple (14-15x PE) on current EPS.”

FedEx Stock Price Forecast

Sixteen analysts who offered stock ratings for FedEx in the last three months forecast the average price in 12 months of $309.63 with a high forecast of $345.00 and a low forecast of $260.00.

The average price target represents a 44.49% change from the last price of $214.29. Of those 16 analysts, 14 rated “Buy”, two rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $260 with a high of $375 under a bull scenario and $125 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the delivery firm’s stock.

Several analysts have also updated their stock outlook. JP Morgan cut the price objective to $297 from $312. BofA lowered the price target to $297 from $310. Bernstein raised the target price to $353 from $339. Cowen lifted the price target to $310 from $283.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

Rivian Shares Tumble As 2022 Production Outlook Disappoints

Shares of electric vehicles manufacturer Rivian fell over 8% on Friday after the company cut its production outlook in half as surging input costs and supply chain bottlenecks continue to bite.

Irvine, California-based EV start-up warned that supply-chain problems could halve its planned production this year to just 25,000 vehicles. Net loss for the fourth quarter was $2.46 billion, or $4.83 per share, compared with a loss of $353 million, or $3.50 per share, from the year-ago period, Reuters reported.

The company’s reported revenue of $54 million, fell far short of analysts’ expectations of $60 million. Cash and equivalents amounted to $18.4 billion in the last quarter.

At the time of writing, Rivian stock traded over 8.0% lower at $37.82 on Friday, way below their IPO price of $78. The stock fell more than 60% so far this year.

Analyst Comments

Rivian is a well-capitalized pure EV start-up OEM that can leverage its strategic relationship with Amazon to derive scale and build software and services competencies for its consumer business. We forecast Rivian to sell 1.5 million BEVs annually in 2030 (801k Consumer / 653k Commercial). We forecast Rivian’s total revenues to grow at a 34% CAGR from 2025 to 2030,” noted Adam Jonas, equity analyst at Morgan Stanley.

Rivian’s software services business can grow from $641 million revenues in 2025, $7 billion in 2030 and $36 billion in 2040, as the installed base grows in size exponentially. We value Rivian at $147, 1.3x 2030 EV/Sales, expensive vs Auto OEMs but not versus software/tech companies and in-line with EV startups such as Tesla and Lucid.”

Rivian Stock Price Forecast

Twelve analysts who offered stock ratings for Rivian in the last three months forecast the average price in 12 months of $85.00 with a high forecast of $147.00 and a low forecast of $35.00.

The average price target represents a 119.47% change from the last price of $38.73. Of those 12 analysts, eight rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $94 with a high of $200 under a bull scenario and $40 under the worst-case scenario. The investment bank gave an “Overweight” rating on the electric vehicles manufacturer’s stock.

Several analysts have also updated their stock outlook. Barclays cut the target price to $115 from $120. Deutsche Bank initiated with a buy rating and set the target price to $130. Mizuho initiated with a buy rating and set the target price at $145.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

What to Expect From Dollar General’s Q4 Earnings?

Discount retailer Dollar General is expected to report earnings per share of $2.59 in the fourth quarter of 2021, which represents a year-over-year decline of over 1.1% from $2.62 per share seen in the same period a year ago.

The Goodlettsville Tennessee-based company is expected to post a net income of $8.69 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

At the time of writing, Dollar General stock traded 1.26% lower at $204.60 on Thursday. The stock rose more than 12% so far this year after surging over 40% in 2021.

Analyst Comments

Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. The ’22 investment setup is less favourable given decelerating momentum from recent initiatives, a tougher macro backdrop, and ramping expense pressures (particularly on labour). Street estimates look full/fair with less upside potential in our view,”

Dollar General’s (DG) valuation (~20x P/E multiple) is in-line with the market and screens relatively fair vs both relative and absolute history. Emerging initiatives (Popshelf, healthcare, produce) are longer-term drivers but likely won’t move the needle in ’22.”

Dollar General Stock Price Forecast

Eight analysts who offered stock ratings for Dollar General in the last three months forecast the average price in 12 months of $235.13 with a high forecast of $265.00 and a low forecast of $220.00.

The average price target represents a 14.80% change from the last price of $204.82. Of those eight analysts, six rated “Buy”, two rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $225 with a high of $300 under a bull scenario and $170 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the discount retailer’s stock.

Several analysts have also updated their stock outlook. Deutsche Bank cut the price target to $230 from $251. Citigroup lowered the price objective to $258 from $260. Evercore ISI slashed the target price to $240 from $245.

“Reasons To Buy: Dollar General’s commitment toward better pricing, private label offering, inventory management, supply chain efficiencies and cost containment should drive sales and margins in the long run,” noted analysts at ZACKS Research.

“Reasons To Sell: Incremental investments in pay and benefits for team members, any supply chain disruptions, and increase in distribution and transportation costs may hurt margins.”

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

General Electric Shares Dip After Group Reaffirms Earnings Outlook

General Electric shares fell over 1.4% in pre-market trading on Thursday after the company reiterated its already-lowered earnings forecast for this year at its Investors Day as surging inputs costs and supply chain bottlenecks continue to bite.

The Boston Massachusetts-based company forecasts adjusted profit for the year in the range of $2.80-$3.50 per share. The company expects its profit margin will grow by 150 basis points that will generate $5.5 billion-$6.5 billion in free cash flow. General Electric also predicted an operating profit of nearly $10 billion and a free cash flow of around $7 billion for next year.

In the fourth-quarter results, which was released in late January, the company reported quarterly adjusted earnings of $0.92 ​ per share, beating the Wall Street consensus estimates of $0.83 per share. However, its revenue declined more than 7% to $20.3 billion from a year earlier. That missed analysts’ expectations of $21.5 billion.

General Electric stock fell 1.4% to $89.95 in pre-market trading on Thursday. The stock fell more than 3% so far this year after rising over 9% in 2021.

Analyst Comments

“Tail risks have been sufficiently managed over the past 4 years as to allow the particularly attractive Aviation and Healthcare franchises to be valued independently and pursue additional strategic optionality,” noted Joshua Pokrzywinski, equity analyst at Morgan Stanley.

“Power, pension, and Long-Term Care are no longer overarching drags on leverage, profitability, and cash. The catalyst path remains uneven, however, and deleveraging to unlock more equity value will ramp in earnest in mid-2022 through year-end 2023 as cash seasonality and Aviation aftermarket ramp. We see this as a good risk/reward framework today improving further as the year progresses.”

General Electric Stock Price Forecast

Fifteen analysts who offered stock ratings for General Electric in the last three months forecast the average price in 12 months of $112.33 with a high forecast of $132.00 and a low forecast of $55.00.

The average price target represents a 23.10% change from the last price of $91.25. Of those 15 analysts, 11 rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $120 with a high of $160 under a bull scenario and $70 under the worst-case scenario. The investment bank gave an “Overweight” rating on the company’s stock.

Several analysts have also updated their stock outlook. UBS cut the price objective to $132 from $143. Credit Suisse lowered the target price to $116 from $122. RBC raised the price target to $113 from $108. BofA Global Research lashed the price objective to $132 from $140.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

Campbell Soup Missed Expectations for Quarterly Revenue

The Camden County, New Jersey-based soups and snacks maker Campbell Soup reported lower-than-expected revenue in the fiscal second quarter as COVID-19 curbs eased and consumers went out to eat more, affecting processed food sales.

The Camden New Jersey-based reported quarterly adjusted earnings of 0.69 cents​​ per share, lower than the Wall Street consensus estimates of $0.78 per share. In addition, the company said its revenue fell more than 3% to $2.2 billion from a year earlier. That too missed the analysts’ expectations of $2.24 billion.

“Volumes more pressured than expected, but promos lifted in Snacks, driving pricing higher. FY’22 guide reiterated. H2 implied EPS of $1.17-1.27 vs. $1.15 consensus, with the delta driven by margin improvement; consensus close to sales forecast at the midpoint. Stock likely flat on the day given recent pullback,” noted Rob Dickerson, equity analyst at Jefferies.

The soups and snacks maker forecasts full-year adjusted earnings in the range of $2.75-$2.85 per share.

At the time of writing, Campbell Soup stock traded 1.6% higher at $42.98 on Wednesday. However, the stock fell 0.20% so far this year after slumping over 10% in 2021.

Analyst Comments

“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,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

“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. Significant organizational changes over the 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.”

Campbell Soup Stock Price Forecast

Seven analysts who offered stock ratings for Campbell Soup in the last three months forecast the average price in 12 months of $46.00 with a high forecast of $50.00 and a low forecast of $43.00.

The average price target represents an 8.75% change from the last price of $42.30. Of those seven analysts, one rated “Buy”, six rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $45 with a high of $61 under a bull scenario and $22 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the packaged food company’s stock.

Several analysts have also updated their stock outlook. Deutsche Bank raised the target price to $46 from $45. JPMorgan cut the target price to $44 from $45. Piper Sandler lifted the price objective to $45 from $43. Credit Suisse upped the target price to $43 from $41.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

Bumble Shares Jump Over 20% on Strong Revenue Outlook

Shares of online dating company Bumble surged over 20% in pre-market trading on Wednesday after the company exceeded profit estimates in the holiday quarter and forecasts solid growth for this year.

On Tuesday, the Austin, Texas-based company reported quarterly adjusted earnings of $0.13 per share, beating market expectations for breakeven results. The company said its revenue jumped over 25% to $208.2 million from a year earlier. However, that missed the consensus of $209.5 million. The diluted loss per share came in at $0.08, worse compared to a loss per share of $0.01 seen a year ago.

The company forecasts total revenue in the range of $207-$210 million in the first quarter of this year and adjusted EBITDA in the range of $47-$49 million. For the full year, it expects total revenue between $934-$944 million and an adjusted EBITDA margin of 26.5%-27%.

“We believe the biggest positive surprise was FY22 Bumble App revenue guidance of 34-36% growth. With the stock down 52% YTD and trading at a 30% discount to MTCH, we believe the recent pullback offers a more attractive opportunity. Buy, $36 PT,” noted Brent Thill, equity analyst at Jefferies.

Bumble stock rose over 21% to $20.1 in pre-market trading on Wednesday. However, the stock slumped over 50% so far this year.

Analyst Comments

Bumble (BMBL) reported in-line rev, with EBITDA 2% above cons., driven by better gross margins. 1Q/FY22 rev guide were above our estimates, with Bumble app seeing strong growth, especially in international markets; BMBL also expects a $20MM rev impact in ’22 from the Ukraine conflict. Stock is +19% AH, while still down sharply YTD. We tweaked ’22-’27 est. & our Price Target goes to $38 vs. $36 prior; maintain Outperform,” noted John Blackledge, equity analyst at Cowen.

Bumble Stock Price Forecast

Eleven analysts who offered stock ratings for Bumble in the last three months forecast the average price in 12 months of $41.09 with a high forecast of $55.00 and a low forecast of $21.00.

The average price target represents a 146.64% change from the last price of $16.66. Of those 11 analysts, seven rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $49 with a high of $85 under a bull scenario and $24 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the online dating company’s stock.

Bumble (BMBL) has become a formidable #2 global online dating player in early innings of international expansion. While we remain bullish on online dating, we are EW given 1) valuation, 2) our preference for a portfolio vs. single brand approach, and 3) less confidence in the ‘global brand’ bull case. BMBL EBITDA margin is likely capped at 33-34% long-term vs. our expectation that MTCH can achieve high-40s,” noted Lauren Schenk, equity analyst at Morgan Stanley.

Several analysts have also updated their stock outlook. Raymond James lowered the price objective to $29 from $48. Cowen and company lifted the price target to $38 from $36. JPMorgan cut the target price to $41 from $50. RBC lowered the target price to $35 from $55.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong selling opportunity.

Check out FX Empire’s earnings calendar

Will Soaring Crude Oil Prices Help Fuel Devon Stock?

Devon Energy shares, which nearly tripled last year, is expected to remain well supported, thanks to soaring energy prices and a recovery in demand, but it is yet to reach the highs recorded in 2008.

Last month, the Oklahoma City Oklahoma-based company reported quarterly adjusted earnings of $1.39​​ per share for the last quarter of 2021, beating the Wall Street consensus estimates of $1.24 per share.

The company said its revenue jumped over 233% to $4.27 billion from a year earlier. That too topped market expectations of $3.76 billion.

CNBC’s Jim Cramer said Friday, March 4, that investors looking for a stock to protect against global uncertainty should consider Devon Energy.

The international benchmark Brent crude oil briefly surged past $139 a barrel, its highest level since 2008, after the United States said it is willing to ban Russian oil imports, scaring investors who fear inflation and slow economic growth, Reuters reported.

At the time of writing, Devon Energy stock traded 3.12% higher at $61.80 on Tuesday. The stock rose over 35% so far this year after surging more than 190% in 2021.

Analyst Comments

“Peer-leading cash returns. Since the merger with WPX, Devon Energy (DVN) has outperformed peers as the well-structured deal added meaningful scale, asset diversification and accelerated cash returns. In-line valuation. Devon Energy (DVN) is trading at 4.5x 2022 EV/EBITDAX (vs. oil-weighted median of 4.3x) and offers a 15% FCF yield (vs. an oil-weighted median of 17%),” noted Devin McDermott, Equity Analyst And Commodities Strategist, equity analyst at Morgan Stanley.

“Balanced risk-reward. DVN remains well-positioned given its diversified oil-weighted asset base, financial strength, and differentiated shareholder return framework.”

Devon Energy Stock Price Forecast

Eighteen analysts who offered stock ratings for Devon Energy in the last three months forecast the average price in 12 months of $59.47 with a high forecast of $70.00 and a low forecast of $51.00.

The average price target represents a -3.11% change from the last price of $61.38. Of those 18 analysts, 13 rated “Buy”, five rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $54 with a high of $65 under a bull scenario and $32 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the independent energy company’s stock.

Several analysts have also updated their stock outlook. Scotiabank raised the target price to $65 from $62. BMO lifted the price target to $70 from $60. Piper Sandler upped the price objective to $67 from $62. Raymond James upped the target price to $70 from $65.

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

Check out FX Empire’s earnings calendar

Shares of Hair Products Maker Olaplex Soar on Earnings Beat

Hair products maker Olaplex shares jumped over 10% in pre-market trading on Tuesday after the company reported better-than-expected revenue in the holiday quarter and lifted its annual sales outlook.

Santa Barbara, California-based company said its net sales climbed over 78% to $166.5 million in the fourth quarter ended December 31, 2021; Net sales increased 95.4% in the United States and 61.4% internationally. That beat the Wall Street consensus estimates of $9.44 million.

The company reported adjusted diluted EPS of $0.10 in the fourth quarter, in line with market consensus. For the fiscal year 2022, the company forecasts net sales in the range of $796 million-$826 million and adjusted net income of $363 million-$379 million.

Following this, Olaplex Holdings’ stock rose over 10% to $15.48 in pre-market trading on Tuesday. However, the stock slumped more than 50% so far this year.

“We’re satisfied with steady outperformance and upward direction to model but expect stock volatility to persist,” noted Stephanie Wissink, equity analyst at Jefferies.

Analyst Comments

“We expect a significant positive stock reaction and relief rally in the stock after market induced weakness in the stock recently given the fundamental outlook clearly remains strong,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

‘We view Olaplex as a unique strong topline growth story, with balanced onmi-channel growth in professional/e-commerce/retail channels, and continued expansion potential beyond its professional heritage, with strong near-term visibility.”

Olaplex Stock Price Forecast

Three analysts who offered stock ratings for Olaplex in the last three months forecast the average price in 12 months of $37.00 with a high forecast of $50.00 and a low forecast of $25.00.

The average price target represents a 163.16% change from the last price of $14.06. All of those three analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price to $34 with a high of $77 under a bull scenario and $10 under the worst-case scenario. The investment bank gave an “Overweight” rating on the hair products maker’s stock.

Several analysts have also updated their stock outlook. Piper Sandler raised the price target to $36 from $34. BofA initiated coverage with a buy rating and a $37 price objective. Truist Securities started coverage with a buy rating and target price of $35. Raymond James initiated coverage with a strong buy rating and a $37 price target.

Check out FX Empire’s earnings calendar

Honeywell Raises Long-Term Growth Target to 4-7% – What That Means For Its Stock?

Honeywell International, which manufactures parts for planes made by Boeing and Airbus SE, outlined aggressive plans for long-term growth and increased profit margins at its investor day on Thursday.

The Charlotte North Carolina-based company lifted its organic sales growth target to 4% to 7%, up from the previous projections of 3%-5%. The company also aims to increase operating profit margins by 0.4%-0.6% every year, compared to its previous target of 0.3%-0.5%.

“Key growth drivers will be Breakthrough Initiatives such as Quantinuum and Sustainable Technology Solutions, as well as accelerating transformation efforts. In terms of runway, SPS is expected to grow at a HSD rate, with both HBT and PMT expanding MSD-HSDs with Aero expanding at a MSD growth rate. Focus areas include new products introductions which is targeted to be 33% of sales in 2023 (vs. 31% in 2021),” noted Sheila Kahyaoglu, equity analyst at Jefferies.

Jefferies gave a price target of $198 with a “Hold” rating.

At the time of writing, Honeywell stock traded 0.24% lower at $186.98 on Monday. The stock slumped more than 10% so far this year after falling nearly 2% in 2021.

Analyst Comments

Honeywell (HON) expanded its long-term targets, which were underpinned by growth drivers across the portfolio. Through a thematic lens, HON offers reasonable valuation vs. other megatrend names but with so much diversity that disclosure and tracking will be necessary,” noted Joshua Pokrzywinski, equity analyst at Morgan Stanley.

Honeywell’s (HON) long-cycle businesses should start to recover more substantially later in 2021 with Aero’s trajectory less certain. We expect Aero to remain weak through 2021 as flight hours see sharp declines and maintenance gets deferred until 2022. The company’s software offerings should be very attractive to customers as digital transformation accelerates post-COVID and we believe this can partially offset the delayed recovery related to the longer cycle core businesses. We see HON’s balance sheet capacity and repatriation potential as attractive, especially given management’s discipline in M&A to appropriately balance growth, value, and disruption.”

Honeywell Stock Price Forecast

Fifteen analysts who offered stock ratings for Honeywell in the last three months forecast the average price in 12 months of $226.93 with a high forecast of $248.00 and a low forecast of $209.00.

The average price target represents a 21.85% change from the last price of $186.23. Of those 15 analysts, seven rated “Buy”, eight rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $212 with a high of $238 under a bull scenario and $156 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the worldwide technology and manufacturing company’s stock.

Several analysts have also updated their stock outlook. Deutsche Bank raised the target price to $243 from $237. Cowen and company lowered the price objective to $230 from $250. Jefferies slashed the price target to $198 from $230.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong selling opportunity.

Check out FX Empire’s earnings calendar

Preview: What To Expect From CrowdStrike’s Q4 Earnings

The cloud-based security software company CrowdStrike is expected to deliver a loss of $16 cents per share in the fourth quarter, worse compared to a loss of $8 cents per share registered in the same period a year ago.

However, the Sunnyvale, California-based technology firm would post revenue growth of over 55% to $412.3 million. The company forecasts revenues in the range of $406.5 million-$412.3 million for the period ended January 31, 2022. The company has beaten earnings estimates only once in the last four quarters.

“We believe CrowdStrike remains strongly positioned to take advantage of the shift toward cloud-based security solutions from legacy vendors, a heightened threat environment requiring professional assistance, the adoption of zero-trust architecture, and organizations looking for platform-based security solutions,” noted Mark Cash, Senior Equity Analyst at Morningstar.

CrowdStrike stock closed 6.3% lower at $179.01 on Friday. The stock plunged more than 12% so far this year after falling over 3% in 2021.

Analyst Comments

“Arising overall security demand has driven higher expectations for CrowdStrike (CRWD). However, we see risk to investor expectations in Q4 as growth in customer adds is unlikely to outpace a declining average deal size by wide enough margin, resulting in more limited upside to consensus ARR forecasts,” noted Hamza Fodderwala, equity analyst at Morgan Stanley.

CrowdStrike has quickly risen to market leadership as a next-gen SaaS security platform with rapid share gains driving 95% revenue CAGR over the last 3 years. However, growing signs of increased competitive & pricing pressure is likely to make share gains more difficult going forward as topline growth decelerates on tough compares into 2022. Given this dynamic, we see an unfavourable risk-reward.”

CrowdStrike Stock Price Forecast

Sixteen analysts who offered stock ratings for CrowdStrike in the last three months forecast the average price in 12 months of $258.69 with a high forecast of $340.00 and a low forecast of $180.00.

The average price target represents a 44.50% change from the last price of $179.03. Of those 16 analysts, 15 rated “Buy”, none rated “Hold”, while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $180 with a high of $249 under a bull scenario and $123 under the worst-case scenario. The investment bank gave an “Underweight” rating on the cybersecurity technology company’s stock.

Several analysts have also updated their stock outlook. Stifel cut the price objective to $250 from $285. RBC lowered the target price to $250 from $275. Mizuho slashed the target price to $270 from $310. Truist Securities lowered the target price to $275 from $300.

“Fundamentals & a robust environment should drive both prints. CRWD should exceed F4Q cons ARR growth of 60% (Jeff 61%), & we believe low 60s%+ is the true bogey,” noted Brent Thill, equity analyst at Jefferies.

SentinelOne (S) should exceed cons in its 3rd Q as a public company sustaining at least 120%+ ARR growth vs cons. 116% yoy. While both warrant premium valuation, we view CRWD as more attractive given its scale & 28% discount to S (S does screen better on a growth adjusted basis but is not yet profitable).”

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong selling opportunity.

Check out FX Empire’s earnings calendar

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

 

Dick’s Sporting on Track to Beat Earnings Estimates Again

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.

“Reasons To Buy: DICK’S Sporting’s fiscal third-quarter results gained from the solid online show and favourable customer demand. Management also raised fiscal 2021 view,” noted analysts at ZACKS Research. The company anticipates sales of $12,120-$12,190 million in the fiscal year 2021, same-store sales of 24-25% and adjusted earnings of $14.6-$14.

At the time of writing, Dick’s stock traded 2.4% lower at $109.69 on Friday. The stock fell nearly 3% so far this year after surging over 113% in 2021.

Analyst Comments

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.”

Dick’s Sporting Goods Stock Price Forecast

Thirteen analysts who offered stock ratings for Dick’s in the last three months forecast the average price in 12 months of $150.50 with a high forecast of $180.00 and a low forecast of $120.00.

The average price target represents a 37.08% change from the last price of $109.79. Of those 13 analysts, nine rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $145 with a high of $230 under a bull scenario and $75 under the worst-case scenario. The investment bank gave an “Overweight” rating on the sporting goods retail company’s stock.

Several analysts have also updated their stock outlook. Cowen and company lifted the target price to $161 from $154. Citigroup lowered the price target to $161 from $170. UBS slashed the price objective to $120 from $148.

However, technical analysis suggests it is good to hold for now as 100-day Moving Average and 100-200-day MACD Oscillator gives mixed signals.

Check out FX Empire’s earnings calendar

Gap Shares Soar After Earnings Blow Past Estimates

The San Francisco, California-based apparel retailer Gap reported better-than-expected earnings and revenue in the fourth quarter, sending its shares up over 12% on Friday.

The U.S. specialty apparel retailer reported a quarterly adjusted loss of 2 cents per share, better than the Wall Street consensus estimates for a loss of 18 cents per share. The company’s revenue rose more than 2% to $4.5 billion from a year earlier. That too topped the market expectations of $4.49 billion.

The company expects adjusted earnings per share to range from $1.85 to $2.05 in fiscal 2022, compared with last year’s $1.44 and analysts’ expectations of $1.86. Gap forecasts net sales to decline in the mid-and high-digits, compared with estimates of a 3.8% decline, Reuters reported.

At the time of writing, Gap stock traded 12% higher at $16.12 on Friday. The stock fell more than 19% so far this year after falling over 12% in 2021.

Analyst Comments

“No-moat Gap met our forecast of a small operating profit in2021’s fourth quarter despite a gross margin of just 33.7%, down 400 basis points from last year. The firm, as previously warned, chose to use expensive air freight to overcome shipping problems and meet holiday demand, but it was able to offset some of the incremental cost by controlling other expenses,” noted David Swartz, Equity Analyst at Morningstar.

“Looking ahead, Gap’s 2022 guidance for low-single-digit sales growth, an adjusted operating margin of 6%-6.5%, and adjusted EPS of $1.85-$2.05 is in line with our forecast despite shipping issues continuing in the first half of the year and input inflation. We expect to lift our $26.50 per share fair value estimate by about 5% given this outlook and rescission of our prior expectation of a higher U.S. corporate tax rate, leaving Gap’s shares as very undervalued.”

Gap Stock Price Forecast

Eleven analysts who offered stock ratings for Gap in the last three months forecast the average price in 12 months of $19.45 with a high forecast of $26.00 and a low forecast of $14.00.

The average price target represents a 23.49% change from the last price of $15.75. Of those 11 analysts, three rated “Buy”, six rated “Hold”, while two rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $14 with a high of $34 under a bull scenario and $5 under the worst-case scenario. The investment bank gave an “Underweight” rating on the apparel retail company’s stock.

“The 4Q beat & above-consensus ’22 outlook lifted shares +9% AMC. But ’22 guidance appears optimistic against ON mis-execution, ongoing freight headwinds, operating cost inflation, & y/y merch margin giveback risk. As such, we model ’22 EPS ~70% below the mid-point of guidance. Stay UW with $14 PT,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

GPS is in need of significant transformation. The separation work & Covid were the catalysts it needed to downsize, as reflected by plans outlined at the ’20 Investor Day. We like new mgmt’s commitment to fleet & corporate downsizing, but are less confident in their ability to execute following 3Q21’s mis-execution. We worry about both the SG&A & GM trajectory post-2021. GM gains likely reverse, & it is unclear if higher marketing spend will yield sales re-acceleration. Our fundamental concerns remain: falling store traffic, eComm disintermediation, declining brand health, apparel price deflation, falling margins. A portion of GPS’ portfolio is less competitive (Gap & BR).”

Several analysts have also updated their stock outlook. BMO cut the price objective to $16 from $19. Credit Suisse lowered the target price to $16 from $20. JPMorgan raised the price target to $20 from $17. Jefferies slashed the price target to $18 from $23.

However, technical analysis suggests it is good to sell for now as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong selling opportunity.

Check out FX Empire’s earnings calendar

Anaplan Shares Soar As Analysts Boost Price Targets After Earnings; Target Price $63

Shares of software maker Anaplan jumped nearly 8% on Thursday after the company reported better-than-expected revenue in the fourth quarter, prompting several analysts to raise their one-year price targets.

The San Francisco California-based company reported a quarterly adjusted loss of $0.11 per share, better than the Wall Street consensus estimates for a loss of $-0.36 per share. The company’s revenue surged 32.8% to $162.7 million from a year earlier. That topped market expectations of $154.7 million.

Anaplan, a web-based enterprise platform for business planning, also lifted its fiscal 2023 revenue projection to $745 million, up from previous forecasts of $730 million.

That has prompted several analysts to update their price targets. BMO raised the target price to $55 from $49. Mizuho lifted the price objective to $65 from $60. Barclays upped the price target to $59 from $58.

At the time of writing, Anaplan stock traded 7.7% higher at $50.27 on Thursday. The stock rose more than 8% so far this year after falling over 36% in 2021.

Analyst Comments

“As planning moves from an annual process run by the finance department to an ongoing collaborative effort across the entire organization, we see Anaplan as a key beneficiary of this trend. The company’s core Connected Planning platform enables collaborative planning across all areas of an organization, including finance, sales, supply chain, marketing, human resources, and operations,” noted Stan Zlotsky, equity analyst at Morgan Stanley.

“With a large addressable market, we see a somewhat competitive landscape. We expect a 19% revenue CAGR over the next 15 years. Near-term, we think a favourable operating environment can yield a return to consistent ~25% growth for Anaplan.”

Anaplan Stock Price Forecast

Eleven analysts who offered stock ratings for Anaplan in the last three months forecast the average price in 12 months of $63.40 with a high forecast of $87.00 and a low forecast of $48.00.

The average price target represents a 27.08% change from the last price of $49.89. Of those 11 analysts, seven rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley raises the base target price to $52 from $48 with a high of $78 under a bull scenario and $31 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the software company’s stock.

However, technical analysis suggests it is good to hold for now as 100-day Moving Average and 100-200-day MACD Oscillator gives mixed signals.

Check out FX Empire’s earnings calendar

Best Buy Shares Jump Despite Disappointing Q4 Show

Best Buy shares rose nearly 6% in pre-market trading on Thursday despite the Richfield, Minnesota consumer electronics retailer reporting lower-than-expected earnings in the holiday quarter and expecting disappointing revenue for the year.

The top U.S. electronics retailer reported quarterly adjusted earnings of $2.73​​ per share, missing the Wall Street consensus estimates of $2.81 per share. The company’s revenue declined over 3% to $16.37 billion from a year earlier. That was also missed analysts’ expectations of $16.59 billion.

For fiscal 2023, earnings per share were forecast to be between $8.85 and $9.15, below analysts’ estimates for $9.16. Comparable sales decreased 2.3% in the fourth quarter, bigger than analysts’ expectations for a 0.2% decline, Reuters reported.

Best Buy anticipates fiscal 2025 revenue of $53.5 billion to $56.5 billion, a substantial increase over the estimate of $53.51 billion. Revenue for fiscal 2021 was $51.76 billion.

Best Buy stock rose 5.85% higher at $106.74 in pre-market trading on Thursday. The stock fell nearly 1% so far this year after gaining about 2% in 2021.

Executives Comments

“The year has clearly started out much stronger than we originally expected. The sales momentum is continuing into Q2 and we are raising our annual comparable sales growth outlook. As we think about the back half of this year, we expect shopping behaviour will evolve as customers are able to spend more time on activities like eating out, travelling and other events,” Best Buy CFO Matt Bilunas said in the press release.

“It is difficult to know exactly how that impacts our business, especially as we lap particularly strong sales in the back half of last year. Therefore, at this time, we are leaving our original FY22 back-half sales assumptions unchanged.”

Analyst Comments

Best Buy (BBY) is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. Best Buy’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labour management, supply chain and omni-channel underpin our view,”

“We think Best Buy (BBY) can sustain >5% EBIT margins after pulling forward its margin target by 5 years during the COVID-19 pandemic. This is reliant on generating SG&A efficiencies, which we believe are possible given Best Buy’s (BBY) strong track record in this arena.”

Best Buy Stock Price Forecast

Ten analysts who offered stock ratings for Best Buy in the last three months forecast the average price in 12 months of $116.40 with a high forecast of $147.00 and a low forecast of $87.00.

The average price target represents a 15.43% change from the last price of $100.84. Of those ten analysts, five rated “Buy”, four rated “Hold”, while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $110 with a high of $140 under a bull scenario and $70 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the consumer electronics retailer’s stock.

Several analysts have also updated their stock outlook. BofA Global Research lowered the price objective to $147 from $175. Raymond James cut the target price to $105 from $135. Citigroup slashed the price target to $87 from $90.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong selling opportunity.

Check out FX Empire’s earnings calendar

Should You Buy Broadcom Ahead of Earnings?

Chipmaker Broadcom is expected to report higher earnings and revenue in the fiscal first quarter, which could help the stock recover its recent losses.

With the global shortage of chips, the price hike and the continued strength in markets such as electric vehicles and mobile devices, the semiconductor industry has gained strength.

The semiconductor manufacturer is expected to report earnings per share of $6.59 in the fiscal first quarter, which represents year-over-year growth of over 14% from $5.78 per share seen in the same period a year ago.

The San Jose, California-based semiconductor manufacturer would post revenue growth of nearly 14% to $7.6 billion from $6.6 billion a year earlier. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

At the time of writing, Broadcom stock traded 2.88% higher at $586.68 on Wednesday. The stock fell nearly 12% so far this year after surging more than 51% in 2021.

Analyst Comments

Broadcom (AVGO) is a compelling franchise in semis with diversified end-market exposure, product cycle momentum in wireless and networking, and market leadership. Furthermore, we take a more constructive view than investors on the company’s software strategy, particularly its purchase of Symantec,” noted Joseph Moore, equity analyst at Morgan Stanley.

“While sentiment has gradually improved, AVGO is still trading below the SOX on a P/E basis despite superior margins and FCF. We see an increase in 5G $ content, a rebound in an enterprise, and reacceleration of cloud as tailwinds through 2021; and with the company’s net leverage reduced meaningfully it should be in the position to continue to execute on tuck-in deals in software.”

Broadcom Stock Price Forecast

Twenty-three analysts who offered stock ratings for Broadcom in the last three months forecast the average price in 12 months of $689.18 with a high forecast of $750.00 and a low forecast of $615.00.

The average price target represents an 18.92% change from the last price of $579.51. Of those 23 analysts, 20 rated “Buy”, three rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $723 with a high of $937 under a bull scenario and $577 under the worst-case scenario. The investment bank gave an “Overweight” rating on the semiconductor manufacturer’s stock.

Several analysts have also updated their stock outlook. Barclays raised the target price to $700 from $650. Piper Sandler lifted the price objective to $750 from $680. Baird upped the price target to $690 from $550.

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

Check out FX Empire’s earnings calendar

Citigroup Shares Fall After Company Releases New Financial Targets

Citigroup shares fell over 2% on Wednesday after the New York City-based investment bank at its first Investor Day forecasts that it will yield a medium-term return on tangible common equity of 11% to 12%, disappointing several analysts who had predicted slightly higher targets.

Citigroup’s expense growth has raised concerns among analysts. It is estimated that expenses will increase by 5% to 6% this year, excluding costs associated with divesting non-U.S. businesses.

Citi’s outlook calls for med.-term (3-5 year) ROTCE of 11%-12%, which is a big ramp from adj. ~8.5% core in ’21. Goals include 4%-5% rev. CAGR, <60% effic. ratio, and an 11.5%-12% CET1 ratio. The ’22 outlook ex-divest. incl. LSD rev. growth, driven by higher rates, modest loan growth, and better fees, offset by 5%-6% cost growth, with transformation/invest. the big drivers. Losses are expected to normalize higher, with a MT targeted NCOs of ~1%,” noted Ken Usdin, equity analyst at Jefferies.

At the time of writing, Citigroup stock traded over 2% to $57.17 on Wednesday.

Analyst Comments

Citi guiding to higher 2022 expenses of $51B (high end of their range), above our $47.5B estimate which is -$1.36 to EPS. This is 85% offset by higher revenues of $1.16, netting to 20c lower EPS for 2022. Will take time to redo our model for the new segments, but the trajectory near term is lower. 3-5 year out ROTCE guide of 11-12% is above our 10% 2025 estimate. Need much faster revenue growth to get there,” noted Betsy Graseck, equity analyst at Morgan Stanley.

“While the stock is cheap at 0.6x NTM BVPS, and new CEO is taking strong, proactive strategic action to boost returns closer to peers, we believe these actions will take time to play out. Citi is exiting 14 consumer businesses in Asia, EMEA and Mexico, and focusing on higher growth areas of US consumer, Asia WM, International wholesale and consumer payments. These actions could drive ROTCE higher than the 9% we are modelling for 2024, but we expect the stock will only start to fully reflect this once revenues begins to accelerate.”

Citigroup Stock Price Forecast

Seventeen analysts who offered stock ratings for Citigroup in the last three months forecast the average price in 12 months of $76.66 with a high forecast of $107.00 and a low forecast of $68.00.

The average price target represents a 35.27% change from the last price of $56.67. Of those 17 analysts, 10 rated “Buy”, seven rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $75 with a high of $107 under a bull scenario and $47 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the investment bank’s stock.

Several analysts have also updated their stock outlook. Wells Fargo lowered the target price to $80 from $85. Oppenheimer cut the price objective to $107 from $114. Credit Suisse slashed the target price to $72 from $76.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong selling opportunity.

Check out FX Empire’s earnings calendar

Preview: Will Dollar Tree Beat Estimates Again?

Dollar Tree, a leading operator of discount variety stores, is expected to deliver a year-over-year decline in earnings on Wednesday when it reports results for the holiday quarter ended January 2022.

The Chesapeake, Virginia-based company is expected to report earnings of $1.78 per share in the fourth quarter, down over 16% from $2.13 per share seen in the same period a year ago.

But the discount variety stores that sells items for $1 or less would post revenue growth of more than 5% to $7.13 billion. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

“While no-moat Dollar Tree should benefit from a price increase at its namesake banner (to $1.25 from $1), with potential additional opportunity from activist investor Mantle Ridge’s involvement, we are unenthusiastic about the stock at its current trading price (around 20% above our revised $111 per share valuation, which is up from $106 mostly to reflect the time value of money),” noted Zain Akbari, Equity Analyst at Morningstar.

“Instead, investors looking to capitalize on discount retailers’ appeal in an inflationary economy should look to off-price chains.”

Dollar Tree stock traded over 1% higher at $143.91 on Tuesday. The stock rose nearly 2% so far this year after surging more than 30% in 2021.

Analyst Comments

“While supply chain disruptions and associated costs are top of mind given the unexpected magnitude of these costs in 2Q and ongoing impact in 3Q, we believe that Dollar Tree’s price-increase initiative will likely be a focal point for investors,” noted Randal J. Konik, equity analyst at Jefferies.

“More specifically, we think investors will look to better understand customer receptivity to these price increases, the degree to which these price increases can mitigate the aforementioned supply chain costs, and to what extent the company is utilizing higher price point items to diversify merchandising and sourcing.”

Dollar Tree Stock Price Forecast

Eleven analysts who offered stock ratings for Dollar Tree in the last three months forecast the average price in 12 months of $167.10 with a high forecast of $181.00 and a low forecast of $147.00.

The average price target represents a 16.85% change from the last price of $143.00. Of those 11 analysts, nine rated “Buy”, two rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $150 with a high of $220 under a bull scenario and $90 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the discount store operator’s stock.

“We are EW with a balanced (and uncertain) R/R skew. Earnings power looks relatively intact amidst COVID-19 disruption, with sales accelerations (especially at FDO) partially offset by incremental expenses and margin headwinds. Inconsistent results (especially at FDO) and limited EPS visibility keep us on the sidelines. Underlying Dollar Tree (DLTR) results should be steady while FDO sales can improve, driven by “H2” renovations,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“Cost headwinds (freight, wages, shrink, and tariffs) may continue to weigh on profitability. Favourable skew of macro-outcomes: Dollar Tree (DLTR) benefits in a recession while gaining share in a low-growth environment. Store growth potential remains, but likely slower than prior history.”

Several analysts have also updated their stock outlook. UBS raised the target price to $175 from $170. Deutsche Bank lifted the price objective to $176 from $171. Telsey Advisory Group upped the target price to $180 from $175.

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

Check out FX Empire’s earnings calendar

Target Shares Soar After Q4 Earnings Blow Past Estimates

Target Corp. shares soared over 12% on Tuesday after the Minneapolis, Minnesota-based company reported better-than-expected earnings in the holiday quarter and forecast solid sales this year despite ongoing supply chain disruption.

The company, which is one of the largest North American retailers offering customers both everyday essentials and fashionables, reported quarterly adjusted earnings of $3.19​​ per share, beating the Wall Street consensus estimates of $2.85 per share.

The retailer said its revenue climbed over 9.0% to $31 billion in the fiscal fourth quarter ended Jan from a year earlier. That missed the market expectations of $31.39 billion. Target’s total comparable sales grew 8.9% in the fourth quarter, reflecting comparable stores sales growth of 8.9% and digital sales growth of 9.2%.

“Our strong fourth-quarter performance capped off a year of record growth in 2021, reinforcing the durability of our business model and our confidence in long-term profitable growth,” said Brian Cornell, chairman and CEO of Target.

For the fiscal year 2022, Target forecasts low- to mid-single-digit revenue growth, an operating margin rate of 8% or higher, low-single-digit growth in operating margin dollars, and high-single-digit growth in Adjusted Earnings per Share.

The company expects quarterly, year-over-year profit performance will be variable during the year and generally improve as the year progresses. The company expects its first-quarter 2022 operating margin rate will be favourable in relation to historical performance, but well below its first-quarter 2021 rate of 9.8%.

On Tuesday, Target stock surged over 12% to $227.10. The stock fell over 4% so far this year after surging more than 30% in 2021.

Analyst Comments

Target beat 4Q21 consensus estimates with better-than-expected margins. But, the highlight of the release is the 2022 guidance, where Target is endorsing a continuation of 8% or higher operating margins. Many expected an outlook that included more of a give-back relative to the 8%+ outlook for 2021 (this yr ended up being 8.4%),” noted Michael Baker, Senior Research Analyst at D.A. Davidson.

“In the five years prior to the pandemic, operating margins averaged 6.3% and ranged from 5.9%-7.1%. The pre-pandemic all-time high was 7.8% in 2010. This shows that the operational improvements, which were taking hold prior to the pandemic, along with the share gains over the last 2 yrs, are proving to be sustainable.”

Target Stock Price Forecast

Thirteen analysts who offered stock ratings for Target in the last three months forecast the average price in 12 months of $266.17 with a high forecast of $305.00 and a low forecast of $230.00.

The average price target represents a 19.66% change from the last price of $222.44. Of those 13 analysts, eight rated “Buy”, five rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $255 with a high of $315 under a bull scenario and $165 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the big-box retailer’s stock.

“Estimates going higher as business expected to compound post-COVID-19. Guide much better than feared. Traffic driven comps impressive, an anomaly across Retail. 8% EBIT margin now the new water level,” noted Simeon Gutman, equity analyst at Morgan Stanley.

Target (TGT) has firmly established itself as a winner in Retail and deserves a premium multiple vs. historical valuations. Target (TGT) is gaining market share on top of 2020’s wallet share gains, we think Target (TGT) is one of the more attractive ways to play the upside to GDP. We see a positive risk/reward skew in the N-T but results could moderate and the stock path may be uneven, keeping us Equal-weight.”

Several analysts have also updated their stock outlook. Deutsche Bank lowered the target price to $305 from $312. Cowen and company cut the target price to $265 from $300. Goldman Sachs slashed the price target to $271 from $310.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong selling opportunity.

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