G7 Leaders Agreed to Keep the Money Taps Open – Source

The backing for more stimulus was shared by all leaders including Angela Merkel of Germany which has traditionally opposed heavy borrowing to spur growth, a position it has relaxed in the face of the COVID-19 crisis.

The administration of U.S. President Joe Biden has been pushing its allies to keep on spending with Treasury Secretary Janet Yellen urging her G7 colleagues in February to “go big”.

“There was broad consensus across the table on continued support for fiscal expansion at this stage,” the source said, adding that Biden, British Prime Minister Boris Johnson and Italy’s Mario Draghi expressed particular support.

The International Monetary Fund has repeatedly urged Group of Seven countries and others to continue fiscal support measures.

The source said the G7 leaders believed there should be long-term policies for ensuring the health of public finances in the future, echoing the position of their finance ministers who met earlier this month in London.

Draghi, president of the European Central Bank from 2011 to 2019, said the rich major Western economies needed some sort of “long-term fiscal anchor” to reassure investors and avoid a rise in market interest rates that could hurt the recovery, the source said.

The leaders believed a post-lockdown rise in inflation in many countries would prove temporary, the source said.

“There was a bit of discussion on inflation but the feeling was that it was temporary,” the source said.

G7 leaders stressed the importance of taking action to reduce unemployment such as retraining and offering support for younger workers, a proposal supported by Canada’s Justin Trudeau, the source said.

At the opening of the meeting, Johnson said the leaders needed to be careful not to “repeat the mistakes of the last great crisis, the last big economic recession of 2008 when the recovery was not uniform across all part of society.”

(Reporting by Guy Faulconbridge; Writing by William Schomberg; Editing by Daniel Wallis)

Morgan Stanley Lifts Parsons’ Base Price Target to $40, Bull Case Forecast to $51

Morgan Stanley raised their base stock price forecast on Parsons to $40 from $38 and a bull case scenario projection of $51.

Last month, the Centreville, Virginia-based company said quarterly earnings came in at $0.34 per share, beating consensus estimates of $0.28 per share. But Parsons’ revenues fell to $874.7 million, down from $970.99 million seen in that same quarter a year ago.

Parsons has signed an deal to acquire digital security firm BlackHorse Solutions in an ‘accretive deal’ worth $203 million.

“Incorporation of 1Q FY21 earnings and consideration of updated guidance in our forecast. We are modeling revenue of ~$3.95bn (~$3.96bn prior and $3.85 – 4.05bn guidance), ~$368mn adjusted EBITDA ($366mn prior and $350 – 375mn guidance), and cash flow from operations of ~$296mn ($300mn prior and $280 – 310mn guidance). We have not factored in the acquisition of BlackHorse Solutions,” noted Matthew Sharpe, equity analyst at Morgan Stanley.

“We are raising our PT to $40 (from $38) on a ~12.5x CY21 EV/EBITDA multiple (from ~11.25x) and ~$348mn of adjusted EBITDA (from ~$346mn).”

Parsons shares rose over 9% so far this year.

Fifteen analysts who offered stock ratings for Parsons in the last three months forecast the average price in 12 months at $188.93 with a high forecast of $225.00 and a low forecast of $163.00.

The average price target represents a -2.94% from the last price of $194.65. Of those 15 equity analysts, six rated “Buy”, seven rated “Hold” while two rated “Sell”, according to Tipranks.

“We see a number of offsetting aspects to the PSN narrative leading us to an EW stance. The strategy to pivot toward the FS business is compelling, on robust topline growth from acquisition synergies. Additionally, we believe PSN will be a healthy cash generator which should allow for an acceleration in the pivot through M&A,” Morgan Stanley’s Sharpe added.

“However, offsetting this are a management team that somewhat lacks a public track record and a Critical Infrastructure segment that will experience headwinds as it winds down some lesser attractive businesses.”

Other equity analysts also recently updated their stock outlook. Jefferies raised the target price to $49 from $46. Truist Securities lifted the target price to $48 from $44.

Stifel increased the target price to $70 from $45. Cowen and company lowered the target price to $33 from $40.

Morgan Stanley Lifts First Republic Bank’s Price Target to $180, 2021 EPS Estimates to $7.33

Morgan Stanley raised their stock price forecast on First Republic Bank to $180 from $175 and raised its earnings per share estimates to $7.33 on stronger deposit growth and faster security purchases.

In April, the bank’s first-quarter earnings came in at $1.79 per share, beating the Wall Street consensus estimates of $1.55 per share. The First Republic Bank posted revenues of $1.13 billion, up from $916.18 million seen in the same period a year ago.

First Republic appears on track to continue its 20% annual loan growth and pristine credit quality for years to come. Raising our EPS estimates on stronger deposit growth and faster security purchases. We remain Equal-weight, however, given its lofty valuation multiple of 23.9x our 2022e EPS,” noted Ken Zerbe, equity analyst at Morgan Stanley.

“We are increasing our EPS estimates for First Republic by 1.9% in 2021 (from $7.19 to $7.33) and by 2.5% in 2022 (from $7.96 to $8.16). The main driver is stronger-than-expected other earning asset growth. Management noted that deposit growth remains quite strong in 2Q21, which could imply growth in excess of the $4.7 bil of loan growth that we expect in the quarter. For reference, core deposits were up $13 bil last quarter.”

First Republic Bank shares rose over 30% so far this year.

Fifteen analysts who offered stock ratings for First Republic Bank in the last three months forecast the average price in 12 months at $188.93 with a high forecast of $225.00 and a low forecast of $163.00.

The average price target represents a -2.94% from the last price of $194.65. Of those 15 equity analysts, six rated “Buy”, seven rated “Hold” while two rated “Sell”, according to Tipranks.

Morgan Stanley gave the bull-case scenario target price of $215 and the worst-case scenario forecast of $136.

“We expect mid-to-high teens loan growth at FRC, given its niche focus on high-net worth clients, and for it to deliver this strong growth while maintaining pristine credit quality, given its peer-leading through-the-cycle average NCO ratio of just one basis point,” Morgan Stanley’s Zerbe added.

“Its wealth management growth paired with significant investments in digital offerings to target “next gen” clients for long-term growth, could result in a stable if not slightly increasing efficiency ratio, which pressures profitability. While FRC deserves to trade at a premium valuation, we believe the shares are fully valued and see limited upside. We would wait for a relative pullback before getting more positive on the shares.”

Other equity analysts also recently updated their stock outlook. Compass point raised the target price to $223 from $215. First Republic Bank had its target price boosted by JPMorgan Chase & Co. to $225 from $210. The brokerage currently has an overweight rating on the bank’s stock.

Jefferies Financial Group reiterated an underperform rating and set a $163 price objective. Maxim Group lifted their price objective to $210 from $200 and gave the stock a buy rating.

Check out FX Empire’s earnings calendar

Campbell Soup Shares Slump After Q3 Earnings Miss, Weak Outlook

Campbell Soup shares slumped as much as 9% on Wednesday after the Camden County, New Jersey-based soups and snacks maker reported lower-than-expected earnings and revenue in the fiscal third quarter.

The processed food and snack company reported earnings per share (EPS) of $0.57 on revenue of $1.98 billion, missing the Wall Street consensus estimates of $0.66 per share on revenue of $2 billion. Net sales declined 11% as a result of lapping the demand surge at the onset of the pandemic in the prior year.

For the full year 2021, Campbell Soup slashed its net sales forecasts to -3.5% to -3.0% decline from the previous projection of -3.5% to -2.5%. Adjusted EPS is predicted to be between $2.90 to $2.93 per share, down from the previous forecasts of $3.03 to $3.11.

The company expects continued margin pressure related to its transition out of the COVID-19 environment, and more pronounced inflation while pricing actions take hold in the beginning of fiscal 2022.

Campbell Soup shares slumped as much as 9% to $44.73 on Wednesday. The stock plunged over 3% so far this year.

Analyst Comments

“We are Equal-weight Campbell Soup (CPB) we are cautious on CPB’s long-term growth prospects due to its exposure to structurally challenged categories, partly offset by stronger LT growth in Snacks,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

CPB reported 3Q21 EPS of $0.57, below consensus $0.67, driven by a topline miss and operating deleverage. CPB reduced FY21 guidance due to the Q3 miss, the post-COVID environment, and rising inflation. CPB expects sustained margin pressure driven by a return to a normalizing post COVID environment and higher inflation. Guidance also reflects the impact from the Plum baby food divestiture in May 2021. CPB announced a $250 MM share repurchase program (1.7% of its market cap).”

Campbell Soup Stock Price Forecast

Five analysts who offered stock ratings for Campbell Soup in the last three months forecast the average price in 12 months of $54.00 with a high forecast of $59.00 and a low forecast of $50.00.

The average price target represents 16.78% from the last price of $46.24. Of those five analysts, two rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $50 with a high of $71 under a bull scenario and $31 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged food company’s stock.

Several other analysts have also updated their stock outlook. Credit Suisse Group decreased their target price to $49 from $55 and set a “neutral” rating. Jefferies Financial Group decreased their price objective to $54 from $58 and set a “buy” rating. Deutsche Bank decreased their price objective to $50 from $52 and set a “hold” rating.

“While CPB’s Q3 results were only 1% light vs. cons. on the top line, EBIT missed by~12%, driven by GM pressure off rising inflation and supply-chain headwinds, combined with delayed pricing until FY’22,” noted Rob Dickerson, equity analyst at Jefferies.

“While FY’21 net sales guidance was bumped by 50 bps on the low end, EBIT and EPS growth was lowered by 4.5% and 5%, respectively, mainly driven by the delta b/t costs, pricing, and other offset.”

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USD/INR: Rupee Falls for Second Straight Day

The Indian rupee slipped against the U.S. dollar for the second straight day on Wednesday amid weakness in domestic equity markets, which fell from record highs due to losses in energy and financial stocks.

The USD/INR rose to an intraday high of 73.0150 against the U.S. currency from Tuesday’s close of 72.95. The dollar index, a measurement of the dollar’s value relative to six foreign currencies, fell 0.09% to 89.99.

The Indian equity markets erased their early morning gains and settled lower on Wednesday, largely due to losses in Financial and Auto sector stocks. The benchmark BSE Sensex index fell 333.93 points or 0.64% to 51,941.64, while the Nifty-50 dipped 104.70 points 0.67% to 15,635.40.

On the other hand, the global oil benchmark Brent futures rose 0.51% to $72.59 per barrel. Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,422.71 crore, as per exchange data.

Indian Rupee is expected to trade with negative bias on risk aversion in the domestic markets, strong dollar and surge in crude oil prices. Additionally, Reserve Bank of India kept its interest rates unchanged for the sixth consecutive monetary policies meet and downgraded its outlook on economy. Further, traders will remain cautious ahead of macroeconomic data, inflation data from US and outcome of Major Central Banks monetary policies around the globe,” noted analysts at Sharekhan.

“However, sharp downside in Rupee may be prevented as number of COVID-19 cases in India continued to decline. India reported daily new COVID-19 cases below 1 lakh. In India number of COVID-19 cases exceeded 2.9Cr and deaths more than 3.51L. USDINR spot expected to trade in a range between 72.75 on lower side to 73.25 on higher side with upward trend.”

The Indian rupee was one of Asia’s best performers, having risen 2.3% in May, but lost ground last week, its biggest decline in six weeks. The USD/INR is expected to rise about 2% to INR 74.00 against the U.S. dollar rate over the coming year, up from INR 72.00 seen on Monday.

Coupa Software Post Deeper Loss in Q1, Shares Slump

Coupa Software shares slumped as much as 9% on Tuesday after the San Mateo, California-based company’s first-quarter earnings declined from a year ago, prompting several analysts to lower their one-year price targets.

The company, which provides a cloud-based expense management platform, said its total revenues were $166.9 million in the first fiscal quarter ended April 30, 2021, an increase of 40% compared to the same period last year. Subscription revenues were $140.1 million, an increase of 33% compared to the same period last year.

The software maker said its GAAP operating loss was $73.9 million, compared to a GAAP operating loss of $5.6 million for the same period last year. Second-quarter of fiscal 2022, total revenues are expected to be $162.0 to $163.0 million and between $681.0 to $684.0 million for full-year fiscal 2022.

Coupa Software shares slumped as much as 9% to $215.31 on Tuesday. The stock plunged about 34% so far this year.

Analyst Comments

Coupa’s Q1 billings came in well ahead of guidance. However, organic growth disappointed due to the weaker base of renewal billings from pandemic-impacted 1Q21. We are highly encouraged by the pace of total bookings and Coupa Pay traction, keeping OW. But as we trim gross margins we take price target to $381,” noted Stan Zlotsky, equity analyst at Morgan Stanley.

“In an uncertain macro environment, we expect relative outperformance in COUP due to  1) defensive nature of Coupa’s core business spend management (BSM) offering, 2) expanding TAM from entry into B2B payments (Coupa Pay) and 3) rapidly improving profitability – all of which drive durable LT growth, in our view. Our $381 price target is based on combining our $226 base case value for the core BSM business and our conservative Coupa Pay estimates, which imply $155 of incremental value. Our PT implies 30X CY22 EV/Sales and 0.79x growth adjusted vs. SaaS peers at 0.57x, a premium we think is appropriate given model conservatism, higher contribution margins from Coupa Pay and sustainability of LT growth.”

Coupa Software Stock Price Forecast

Eighteen analysts who offered stock ratings for Coupa Software in the last three months forecast the average price in 12 months of $301.50 with a high forecast of $413.00 and a low forecast of $250.00.

The average price target represents a 34.57% increase from the last price of $224.04. Of those 18 analysts, 13 rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley slashed the stock price forecast to $381 from $395 with a high of $521 under a bull scenario and $162 under the worst-case scenario. The firm gave an “Overweight” rating on the software company’s stock.

Several other analysts have also updated their stock outlook. Wells Fargo lowered the price target to $255 from $305. Canaccord Genuity cut the target price to $325 from $375. Truist Securities slashed the target price to $326 from $386. Raymond James lowered the price target to $300 from $365. Mizuho cut the target price to $250 from $320.

Citigroup cut the price target to $254 from $272. Needham lowered the target price to $280 from $385. Oppenheimer slashed the target price to $260 from $320. Barclays cut the target price to $250 from $292. Piper Sandler lowered the target price to $300 from $315. Raymond James cut the target price to $300 from $365.

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Biogen Shares Soar to All-Time High On Alzheimer’s Drug Approval

Biogen shares soared as much as 64% to a record high on the news that the Cambridge, Massachusetts-based biotechnology company receives approval from the U.S. Food and Drug Administration for Alzheimer’s treatment ADUHELM (Aducanumab).

The U.S. Food and Drug Administration’s decision to approve this treatment will be the first in almost two decades. The food and drugs regulator press release did not talk about any major safety issues, which could help grant ADUHELM a clean label in the future.

Biogen shares surged as much as 64% on the news and finished the day up 38% at a new record high of $395.85 on Monday.

Analyst Comments

“We update our model for Aduhelm approval. We see the investor debate moving to launch speed (including how payers will respond), availability of infusion sites, and post-approval regulatory requirements. Given the limited competition and broad patient need, we expect a robust launch with limited access issues,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“Price target to $455 on approval: We now reflect 100% of our expected revenues (versus 65% prior). We have slightly lowered our penetration as we assume more abandonment/payer pushback given the higher-than-expected price. The lower penetration is more than offset by increasing our assumed net price from $20,000 to $35,000 (the wholesale price is $56,000). We await further details from mgt. on their call tomorrow morning.”

Biogen Stock Price Forecast

Twenty-two analysts who offered stock ratings for Biogen in the last three months forecast the average price in 12 months of $359.06 with a high forecast of $458.00 and a low forecast of $244.00.

The average price target represents a -9.29% decrease from the last price of $395.85. Of those 22 analysts, 11 rated “Buy”, 11 rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast to $455 from $343 with a high of $694 under a bull scenario and $196 under the worst-case scenario. The firm gave an “Overweight” rating on the biotechnology company’s stock.

Several other analysts have also updated their stock outlook. Jefferies raised the target price to $500 from $450. Piper Sandler lifted the target price to $384 from $260. Oppenheimer upped the target price to $450 from $325.

“Today we are upgrading shares to Outperform, and increasing our price target from $225 to $450,” noted Phil Nadeau, equity analyst at Cowen.

“We assume penetration of the 1.5MM mild Alzheimer’s patients will grow to 8% by 2025, yielding $7B in revenue. Our 2025 Non-GAAP EPS estimate has increased from $21.40 to $37.05. We expect revenue to grow to $7B by 2025. We expect Aduhelm’s launch to drive a 13% revenue CAGR for Biogen for the period of 2021-25, among the highest in large-cap biotech.”

Check out FX Empire’s earnings calendar

USD/INR Outlook: No Relief for Battered Rupee, Likely to Weaken Against Dollar

There will be no respite for the battered Indian rupee over the coming year as surging COVID-19 cases amid timid economic recovery and deteriorating external position will pose downside risks.

The Indian rupee was one of Asia’s best performers, having risen 2.3% in May, but lost ground last week, its biggest decline in six weeks. The USD/INR is expected to rise about 2% to INR 74.00 against the U.S. dollar rate over the coming year, up from INR 72.00 seen on Monday.

“Various factors have aligned against the rupee. Not only a steep rise in COVID-19 case numbers, but seasonal weakness and a worsening external position have also come to the fore. Downside risks have risen to our conservative GDP growth forecast of 10% in FY22 (ending March 2022),” noted Daniel Been, head of FX and G3 research at ANZ.

“While a national lockdown has been averted so far, various local lockdowns are in place in many states till early May, with a high possibility of extensions. In addition, the solid set of external data is behind us. The trade deficit has materially risen in the past two to three months on higher oil and gold imports, and the current account registered a small deficit in the December quarter.”

With the resurgence of COVID-19 cases posing the biggest risk to the nascent economic recovery, several economists have downgraded their outlook for Asia’s third largest’s GDP growth for the ongoing fiscal year.

But the recent rise in the country’s imports and a jump in dollar interest rates could hurt the rupee. Additionally, sluggish economic recovery and surge in dollar demand due to a rise in inflation expectations and bond yields could also push the rupee lower.

“Looking forward, we believe the currency outlook is poised to remain
stable with a slight appreciation bias against the US dollar, but risks to this
view remain strongly tilted to the downside,” noted Olivia Alvarez Mendez, FX Market Analyst at Monex Europe.

Last week, the Reserve Bank of India maintained a dovish stance, and governor Shaktikanta Das said that the central bank would keep the view unchanged to revive growth.

That would keep the Indian rupee weighed down against the mighty dollar at least throughout this year.

Morgan Stanley Lifts Dick’s Sporting Goods Price Target to $115

Morgan Stanley raised their stock price forecast on Dick’s Sporting Goods to $115 from $93 and said that it is driven entirely by a 30% increase in ’22 EPS estimate of $7.60.

Late last month, Dick’s said its fiscal first-quarter net income rose to $361.8 million, or $3.41 per share, from a loss of $143.4 million, or $1.71 per share, a year earlier. The company said its adjusted earnings per share (EPS) of $3.79 per share, beating the Wall Street consensus estimates of $1.12 per share.

The Coraopolis, Pennsylvania-based company said its revenue surged 119% to $2.92 billion, beating estimates for $2.18 billion. On a two-year basis, sales were up 52%.

“We are ‘Overweight’ rated. We see Dick’s Sporting Goods (DKS) as a structurally higher-margin business with faster growth post-COVID-19. This warrants a mid to high-teens multiple in our view. Raising price target to $115,” noted Simeon Gutman, equity analyst at Morgan Stanley.

Dick’s Sporting Goods shares rose over 70% so far this year.

Twenty analysts who offered stock ratings for Dick’s Sporting Goods in the last three months forecast the average price in 12 months at $103.22 with a high forecast of $142.00 and a low forecast of $78.00.

The average price target represents a 5.90% increase from the last price of $97.47. Of those 20 equity analysts, 11 rated “Buy”, eight rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the bull-case scenario target price of $150 and the worst-case scenario forecast of $60.

Dick’s Sporting Goods (DKS) is in a favorable 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,” Morgan Stanley’s Gutman added.

“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.”

Other equity analysts also recently updated their stock outlook. Stephens raised the target price to $95 from $74. CFRA lifted the price target by $30 to $110. UBS upped the price target to $107 from $90.

Telsey Advisory Group increased the price target to $113 from $98. Wedbush lifted the target price to $110 from $97. Stifel lifted the target price to $98 from $71. Citigroup raised the price target to $128 from $90.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Vail Resorts, GameStop, Restoration Hardware and Chewy in Focus

Earnings Calendar For The Week Of June 7

Monday (June 7)

IN THE SPOTLIGHT: VAIL RESORTS

Vail Resorts, which owns and operates several premier mountain resorts in Colorado and California, is expected to report its fiscal third-quarter earnings of $6.54 per share, which represents year-over-year growth of about 75% from $3.74 per share seen in the same period a year ago.

The premier mountain resort company would post revenue growth of 27% to $880.8 million. In the last four quarters, on average, Vail has beaten earnings estimates over 21%.

“Shares of Vail Resorts have outperformed the industry in the past three months. Notably, the company has been benefiting from its offerings such as Epic Pass, Epic Local Pass, Epic Day Pass and Epic Coverage products. This along with focus on digital marketing and media advertising bode well. Going forward, the company expects the season pass program to be a key growth driver as it relates to the growing number of people associated with the program,” noted analysts at ZACKS Research.

“Meanwhile, the company continues to reinvest in its resorts to boost customer traffic. Also, it is focussing on technological enhancements to support its data driven approach, guest experience and corporate infrastructure. Nonetheless, earnings estimates for 2021 have moved up over the past 60 days, depicting analysts optimism regarding the stock growth potential.”

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

Ticker Company EPS Forecast
MTN Vail Resorts $6.54
MRVL Marvell Technology $0.27

Tuesday (June 8)

Ticker Company EPS Forecast
NAV Navistar International $0.50
THO Thor Industries $2.28
ASO Avesoro Resources $0.83
CASY Casey’s General Stores $0.86
ABM ABM Industries $0.71
MIK Michaels Companies $0.30

Wednesday (June 9)

IN THE SPOTLIGHT: GAMESTOP, RESTORATION HARDWARE

GAMESTOP: The world’s largest multichannel video game retailer is expected to report its first-quarter loss of -$0.68 per share, an improvement from a loss of -$1.61 per share seen in the same period a year ago.

“Shares of GameStop have risen and outpaced the industry over the past three months. The company has been undertaking prudent efforts to fast-track growth. It is particularly focusing on expanding in the digital arena. To accelerate transformation, the company has resorted to board restructuring. It has also undertaken capital restructuring to support growth. In this context, it has completed the redemption of $216.4 million worth senior notes,” noted analysts at ZACKS Research.

“Also, it has completed selling 3.5 million shares, thereby aiding it to cash-in on the massive price surge witnessed since January, due to potential short-squeeze events. Apart from this, GameStop issued encouraging preliminary sales numbers for the nine-weeks ended Apr 3, 2021, wherein total global sales grew 11%. The company has been able to achieve sales growth despite challenges related to the pandemic.”

RESTORATION HARDWARE: The Corte Madera, California-based home-furnishings company is expected to report its first-quarter earnings of $3.99 per share, which represents year-over-year growth of over 214% from $1.27 per share seen in the same period a year ago.

A retailer in the home furnishings marketplace would post revenue growth of 56% to $752.1 million. In the last four quarters, on average, Restoration has beaten earnings estimates over 60%.

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

Ticker Company EPS Forecast
GME GameStop -$0.68
RH Restoration Hardware $3.99
VRNT Verint Systems $0.36
GEF Greif $1.03
CPB Campbell Soup $0.66
UNFI United Natural Foods $0.88

Thursday (June 10)

IN THE SPOTLIGHT: CHEWY

The Dania Beach, Florida-based online pet store is expected to report its first-quarter earnings of $0.03 per share, which represents year-over-year growth of over 125%.

The retailer would post year-over-year revenue growth of over 30% to $2.12 billion.

“We see CHWY as one of the best-positioned Internet SMID-cap names given 1) the “staple-like” ~$100B US pet products and services industry CHWY addresses and secular pet ownership growth, 2) its leading online position and expected further brick & mortar share losses, and 3) ability to reach profitability due to strong marketing efficiency,” noted Lauren Schenk, equity analyst at Morgan Stanley.

“However, with the COVID-19 acceleration and long-term opportunity of the model well understood by the market, incremental data points from here could be less bullish. Thus, tactically, we see a more balanced risk-reward near term; however, long term we continue to be bullish and could look to re-upgrade the stock on a pullback.”

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

Ticker Company EPS Forecast
SIG Signet Jewelers $1.23
HLMA Halma £30.51
CMD Cantel Medical Corp $0.63

Friday (June 11)

There are no major earnings scheduled

Lululemon Tops Q1 Earnings and Revenue Estimates; Target Price $396

The Vancouver-based retailer healthy lifestyle-inspired athletic retailer Lululemon reported better-than-expected earnings and revenue in the first quarter of the fiscal year 2021 and expects full-year net revenue and profit higher than the analysts’ expectations.

The apparel retailer’s net revenue jumped 88% year on year to $1.23 billion, beating the Wall Street consensus estimates of $1.13 billion. Excluding items, Lululemon’s earnings per share came in at $1.16, higher than the market expectations of $0.91 per share.

Lululemon forecasts net revenue in the range of $1.300 billion to $1.330 billion for the second quarter of 2021. Diluted earnings per share are expected to be in the range of $1.05 to $1.10 for the quarter and adjusted diluted earnings per share are expected to be in the range of $1.10 to $1.15.

For full-year 2021, Lululemon forecasts net revenue in the range of $5.825 billion to $5.905 billion. Diluted earnings per share are expected to be in the range of $6.52 to $6.65 for the year and adjusted diluted earnings per share are expected to be in the range of $6.73 to $6.86.

Lululemon shares fell 1.07% to $317.36 on Thursday. The stock slumped about 9% so far this year.

Analyst Comments

“1Q results up big against easy compares. Stores are open again, int’l up >100% and ecom up 50%. These are great trends and should continue. However, we believe the strength in results is baked into valuation at this point,” noted Randal J. Konik, equity analyst at Jefferies.

“Moreover, we continue to believe Mirror and ’22 footwear launch will be dilutive to the P&L which could present issues if the core apparel biz slows. As a result, we believe LULU shares will stay flat, and prefer to buy NKE and UAA shares.”

Lululemon Stock Price Forecast

Fifteen analysts who offered stock ratings for Lululemon in the last three months forecast the average price in 12 months of $396.67 with a high forecast of $465.00 and a low forecast of $330.00.

The average price target represents a 24.99% increase from the last price of $317.36. Of those 15 analysts, 12 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $278 with a high of $476 under a bull scenario and $138 under the worst-case scenario. The firm gave an “Equal-weight” rating on the athletic apparel company’s stock.

Lululemon (LULU) delivered another quarter of revenue & EPS results above Street expectations, with some items accelerating from pre-COVID-19 levels. We view raised guidance as conservative, but suspect Street estimates only climb to the high end of the new EPS range. Leave 1Q21 positive; estimates under review,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

Several other analysts have also updated their stock outlook. B. Riley slashed the target price to $370 from $374. Cowen raised the target price to $405 from $392. JP Morgan cut the target price to $80 from $90.

“Expanded eComm capabilities, improved supply chain, better inventory management, & product initiatives led to enviable ’18-’19 performance & a robust return to pre-COVID-19 performance levels in 2H20, making high-teens-low-20s % comps seem normal. Still, current valuation appears extreme & positive EPS revisions appear minimal, so we stay EW,” Morgan Stanley’s Greenberger added.

“Compelling LT & post-COVID-19 growth opportunity driven by three factors: 1) international expansion, 2) digital growth, & 3) product innovation. LULU dominates the NA athletic yoga apparel category due to its unique brand positioning & fashionable products, & its athleisure focus is further advantaged in a COVID-impacted world.”

Check out FX Empire’s earnings calendar

Chipmaker Broadcom Tops Q1 Earnings Estimates; Target Price $525

Chipmaker and software infrastructure supplier Broadcom reported better-than-expected earnings and revenue in the fiscal second quarter and expects revenue above analysts’ expectations for the current quarter.

The semiconductor manufacturer said its revenue climbed to $6.61 billion during the quarter ended May 2, 2021, up from $5.74 billion seen in the same period a year ago. That was above the Wall Street consensus estimates of $6.51 billion.

On an adjusted basis, the global semiconductor leader earned $6.62 per share, higher than the market expectations of $6.43 per share.

Broadcom forecasts its third quarter of the fiscal year 2021, ending August 1, 2021, revenue at nearly $6.75 billion and adjusted EBITDA at about 60%. That was higher than the Wall Street consensus estimates of $6.6 billion.

But the upbeat results did not help stocks, which fell about 2% to $464.8 on Thursday. The stock rose over 6% so far this year.

Analyst Comments

“Upside on broadband and wireless drove a beat in the quarter. Broadcom expects strength in semiconductors to continue into the July quarter, led by strength in broadband, hyperscale and an improvement in enterprise. Remain Overweight and increase price target to $555,” noted Craig Hettenbach, equity analyst at Morgan Stanley.

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. While sentiment has gradually improved, AVGO is still trading 7X turns below the SOX on a P/E basis despite superior margins and FCF. We see an increase in 5G $ content, a rebound in enterprise, and reacceleration of cloud as tailwinds heading into 2021. And with the company’s net leverage reduced meaningfully it should be in the position to execute on tuck-in deals in software.”

Broadcom Stock Price Forecast

Seventeen analysts who offered stock ratings for Broadcom in the last three months forecast the average price in 12 months of $525.75 with a high forecast of $575.00 and a low forecast of $440.00.

The average price target represents a 13.11% increase from the last price of $464.80. Of those 17 analysts, 15 rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast to $555 from $538 with a high of $657 under a bull scenario and $404 under the worst-case scenario. The firm gave an “Overweight” rating on the semiconductor manufacturer’s stock.

Several other analysts have also updated their stock outlook. JP Morgan raised the target price to $585 from $570. Cowen lifted the target price to $478 from $470. Piper Sandler increased the target price to $525 from $500. UBS upped the target price to $530 from $510. Citigroup raised the price target to $500 from $470.

“A very clean F2Q beat on broad-based robust demand with an above consensus F3Q outlook on continuation of existing trends. Cloud/networking spending remains resilient with surprisingly resurgent Broadband trends offsetting continued soft but set to improve Enterprise spending,” noted Matthew D. Ramsay, equity analyst at Cowen.

“As expected, Wireless was down on seasonally with consistent contributions via Software. PT to $478, reit Market Perform,”

Check out FX Empire’s earnings calendar

Ramping Sales of Medical Cannabis Critical for Long-Term Growth of Khiron, Says ATB Capital

ATB Capital said in its latest report that Khiron’s strategy of vertical integration supports sales growth at attractive margins and as medical cannabis revenue increases, they expect Khiron’s sales growth and gross margin expansion to be meaningful over the long term, supporting a constructive outlook.

Last week, the vertically integrated cannabis leader with core operations in Latin America and Europe recorded revenues of $2.8 million in Q1 2021, a 49% increase from the prior year and 13% increase from Q4 2020. The company said its medical cannabis sales reach 20% of revenues, contributing over 45% of gross profits.

“We reduce our revenue estimates due to depreciating domestic currency and impact of COVID-19 on CPG sales. However, we increased our gross margin estimates to factor the increasing medical cannabis sales. Our target price remains unchanged as lower revenue estimates are offset by higher margin estimates,” noted David M. Kideckel, PhD Analyst, Managing Director at ATB Capital.

“Maintain Speculative Buy with an Unchanged Price Target of $1.00: Our price target is based on our DCF projected through 2030e using a 17% discount rate and a 3% terminal growth rate, both unchanged. The terminal value accounts for 39% of our fair value estimate. Our rating reflects the regulatory uncertainty for cannabis use across LATAM.”

The U.S.-listed Khiron Life Sciences shares rose over 24% so far this year.

ATB Capital has performed a scenario analysis and gave revenue estimates for end-2021 of $11.8 million in the bear case scenario, $15.2 million under a base case scenario and $28.2 million in a bull case scenario.

Bear Case: We assume lower sales throughout 2021e due to the impact of the COVID-19 pandemic on Khiron’s medical cannabis and health services sales.

Base Case: We expect sales to ramp up in 2021e as Khiron increases sales from medical cannabis products in Colombia, with moderate impact from COVID-19. We assume Khiron starts generating meaningful medical cannabis sales from international markets (e.g. UK, Peru, Brazil) from H2/21e onwards. We also assume that Khiron’s revenue from the CPG segment may restart once COVID-19 eases in 2022e.

Bull Case: We assume COVID-19 will not materially impact Khiron’s sales, and that the Company will be able to rapidly ramp up medical cannabis sales in Colombia, export to European markets, and expand its clinic model across LATAM.

Cannabis is an emerging industry and is subject to regulatory headwinds. Although the industry is still emerging, legal cannabis has gone through multiple iterations. The business started as a flower-based market aimed at catering to the needs of stoners and thereafter, blossomed to a more retail-centric market that experimented with multiple edibles, beverages and concentrates.

Most recently, the cannabis industry has further widened its reach to target a broad base of the audience whose main aim is not to get intoxicated but rather to be cured of some form of the disease.

While over half of the population is in favor of new legalization, only a few states have thus far legalized cannabis for recreational use and the product remains illegal at the federal level. Much work and changes are still required to occur for this industry to realize its full potential.

FedEx Could Hit New All-Time High on Strong Q4 Earnings

The Memphis, Tennessee-based multinational delivery services company FedEx is expected to report its fiscal fourth-quarter earnings of $4.91 per share, which represents year-over-year growth of about 95% from $2.53 per share seen in the same period a year ago.

The delivery firm would post revenue growth of over 20% to $21.47 billion. In the last four quarters, on average, FedEx has beaten earnings estimates over 41%.

The company’s next earnings report is expected to be released on June 24, 2021. FedEx shares rose over 18% so far this year. The stock fell about 1.4% on Wednesday.

Analyst Comments

“We expect a beat for F4Q21 as many of the LTM trends we have seen will continue. However, more than ever, 4Q results are likely not as important as the FY22 guide, which will be the critical test of how much of the pandemic tailwinds mgmt. believes are sustainable (and deserves to be priced in),” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We see EBIT growth through YE of FY21 driven by both margin improvement and vol. driven rev. growth which is helped by limited Airfreight capacity and an eCommerce surge, though yields are mixed. 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

Eighteen analysts who offered stock ratings for FedEx in the last three months forecast the average price in 12 months of $336.80 with a high forecast of $383.00 and a low forecast of $250.00.

The average price target represents a 9.86% increase from the last price of $306.57. Of those 18 analysts, 15 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast to $265 from $250 with a high of $400 under a bull scenario and $100 under the worst-case scenario. The firm gave an “Equal-weigh” rating on the health care company’s stock.

Several other analysts have also updated their stock outlook. FedEx has been assigned a $350 price objective by analysts at Berenberg Bank. The firm presently has a “buy” rating on the shipping service provider’s stock. Robert W. Baird reaffirmed a “buy” rating on shares.

Credit Suisse Group slashed their price target to $350 from $368 and set an “outperform” rating. KeyCorp raised their price target to $370 from $350 and gave the stock an “overweight” rating. JPMorgan raised the target price to $366 from $340.

Check out FX Empire’s earnings calendar

Advance Auto Parts Earnings to More Than Double in Q1; Target Price $221

The leading automotive aftermarket parts retailer Advance Auto Parts is expected to report its first-quarter earnings of $3.05 per share, which represents year-over-year growth of over 235% from $0.91 per share seen in the same period a year ago.

The company would post quarterly revenue of $3.31 billion, up from $2.70 billion seen in the same period a year ago. The company forecasts full-year 2021 net sales in the range of $10.1-$10.3 billion.

The Raleigh, North Carolina-based company is scheduled to issue its quarterly earnings results before the market opens on Wednesday, June 2. Advance Auto Parts shares traded 2.4% higher at $194.26 on Tuesday. The stock rose over 20% so far this year.

Analyst Comments

Advance Auto Parts (AAP) operates in a defensive (recession-resistant) category and has one of the largest long-term EBIT margin expansion opportunities in our coverage (we estimate 300-400 bps over time). COVID-19 slowed parts of AAP’s transformation but gross and EBIT margin upside from internal initiatives is still expected beginning in 2021,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“Significant and improving FCF generation plus share repurchases likely to enhance EPS growth. We think the combination of a defensive category, AAP’s progress generating stable top-line growth, and significant margin upside all make for a positive risk/reward skew.”

Advance Auto Parts Stock Price Forecast

Fifteen analysts who offered stock ratings for Advance Auto Parts in the last three months forecast the average price in 12 months of $221.38 with a high forecast of $235.00 and a low forecast of $200.00.

The average price target represents a 14.04% increase from the last price of $194.12. Of those 15 analysts, 12 rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast to $215 with a high of $275 under a bull scenario and $145 under the worst-case scenario. The firm gave an “Overweight” rating on the health care company’s stock.

Several other analysts have also updated their stock outlook. BTIG Research raised shares from a neutral rating to a buy rating and set a $140 price objective. SVB Leerink raised their price target to $128 from $115 and gave the stock a market perform rating. Raymond James raised their price target to $130 from $126 and gave the stock an outperform rating.

Check out FX Empire’s earnings calendar

Abbott Shares Slump About 8% After It Slashed 2021 Profit Outlook

The Illinois-based medical devices and health care company Abbott Laboratories’ shares slumped about 8% on Tuesday after the company slashed its full-year 2021 profit outlook due to significantly lower recent and projected COVID-19 diagnostic testing demand.

The U.S. health care company forecasts 2021 diluted earnings per share from continuing operations under GAAP of $2.75 to $2.95. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $4.30 to $4.50 for full-year 2021.

“We’ve recently seen a rapid decline in COVID-19 testing demand and anticipate this trend will continue, which led us to adjust our full-year guidance,” said Robert B. Ford, president and chief executive officer, Abbott.

“At the same time, excluding COVID-19 tests, our organic base business growth is accelerating, we continue to see improving end-markets and our new product pipeline continues to be highly productive.”

Abbott Lab shares slimed about 8% to $107.47 on Tuesday. The stock fell about 2% so far this year.

Analyst Comments

“Before market open Tuesday, Abbott updated its FY21EPS outlook due to significantly lower diagnostic revenue expectations. This was driven by materially lower rapid testing demand due to more individuals becoming fully vaccinated in developed markets, global rollouts, and guidance on testing for fully vaccinated people. As a reminder, despite missing our Q1 Diagnostic revenue projection, on its Q1 earnings call management reiterated its COVID testing revenue guidance of $6.5-$7.0B for 2021,” noted Marie Thibault, equity analyst at BTIG.

“While this morning’s press release did not offer an update on revenue, ABT lowered its FY21 adjusted EPS from $5.00 to $4.30-$4.50 (we modeled $5.14) and GAAP EPS of at least $3.74 to $2.75-$2.95 (we modeled $3.91). ABT also provided Q2 adjusted EPS guidance of at least $1.00 (we modeled $1.20) and GAAP EPS guidance of at least $0.39 (we modeled $0.89). We expect to hear more detail on the company’s revenue outlook for Diagnostic testing, the uptake of at-home self-tests, and whether double-digit EPS growth for 2022 remains possible. Our rating and price target are under review until we get more detail from the company.”

Abbott Laboratories Stock Price Forecast

Ten analysts who offered stock ratings for Abbott Laboratories in the last three months forecast the average price in 12 months of $135.89 with a high forecast of $150.00 and a low forecast of $120.00.

The average price target represents a 25.80% increase from the last price of $108.02. Of those 10 analysts, eight rated “Buy”, one rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast to $140 with a high of $162 under a bull scenario and $108 under the worst-case scenario. The firm gave an “Overweight” rating on the health care company’s stock.

Abbott delivers double-digit underlying organic growth in 2021 and sees >$6bn in COVID-19 Dx Revenues, with Device growth driven by key products (e.g. Libre, Mitraclip). Abbott has high exposure to emerging markets and consumer-directed businesses, driving the potential for sustainable double-digit earnings growth but also subjecting the company to EM currency exposure that is the highest among our Device coverage,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“Leverage opportunities are visible across multiple business segments including Nutrition, Diagnostics, and EPD, where peer margins demonstrate the potential for improvement.”

Several other analysts have also updated their stock outlook. BTIG Research raised shares from a neutral rating to a buy rating and set a $140 price objective. SVB Leerink raised their price target to $128 from $115 and gave the stock a market perform rating. Raymond James raised their price target to $130 from $126 and gave the stock an outperform rating.

Check out FX Empire’s earnings calendar

Ulta Beauty Tops Earnings Forecast, Boosts Outlook; Target Price $452 in Best Case

The Bolingbrook, Illinois-based makeup & cosmetic products retailer Ulta Beauty reported better-than-expected earnings in the first quarter and lifted its full-year 2021 outlook, sending its shares up over 5% on Friday.

The largest U.S. beauty retailer said its net sales increased 65.2% to $1.9 billion compared to $1.2 billion in the first quarter of fiscal 2020. The net sales increase during the first quarter of fiscal 2021 was primarily due to the favorable impact in the U.S. from improving consumer confidence, government stimulus payments and the easing of COVID-19 restrictions.

Ulta Beauty reported diluted earnings per share of $4.10, including a $0.03 benefit due to income tax accounting for share-based compensation, compared to diluted loss per share of $1.39 in the first quarter of fiscal 2020. Adjusted diluted loss per share for the first quarter of fiscal 2020 was $1.13.

That was way higher than the Wall Street consensus estimates of $1.99 per share.

For the fiscal year 2021, the company raised its net sales forecasts to $7.7 billion to $7.8 billion, up from the previous forecast of $7.2 billion to $7.3 billion. The diluted earnings per share projection were lifted in the range of $11.50 to $11.95, up compared to $8.85 to $9.30.

Ulta Beauty shares closed 5.17% higher at $345.36 on Friday. The stock rose over 20% so far this year.

Analyst Comments

“We are EW rated on Ulta Beauty (ULTA). We have been watching from the sidelines because we thought market expectations were far ahead of consensus, and to see meaningful upside to the stock required a peak multiple on what may be peak earnings. We were wrong; after Q1’21’s beat and raise, estimates are likely going higher, and we could see more upward revisions throughout the year. We think bulls are looking for $14.50/$16 in ’21/’22 EPS, which could mean a $400 stock or 16% upside from here (assuming a 25x multiple),” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We struggle to underwrite bull case earnings because the comps required (40%/8.5% in ‘21/’22) assume: 1) all lost dollars from 2020 comeback, 2) core demographic-driven demand is stronger than usual, and 3) there is excess excitement/reopening-driven purchasing that resembles a stock-up behavior. Even if ULTA can achieve a 40% comp/$14.50 in EPS in ’21, at least some of the incremental growth above the guide is likely pulled out of ’22, making getting to $16 difficult. This keeps us EW rated.”

Ulta Beauty Stock Price Forecast

Twenty-five analysts who offered stock ratings for Ulta Beauty in the last three months forecast the average price in 12 months of $367.55 with a high forecast of $452.00 and a low forecast of $310.00.

The average price target represents a 6.43% increase from the last price of $345.36. Of those 25 analysts, 16 rated “Buy”, nine rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast to $350 from $330 with a high of $400 under a bull scenario and $225 under the worst-case scenario. The firm gave an “Equal-weight” rating on the beauty stores company’s stock.

Several other analysts have also updated their stock outlook. UBS raised the stock price forecast to $395 from $380. Stifel lifted the target price to $330 from $285. Telsey Advisory Group increased the price target to $400 from $375. Deutsche Bank upped the target price to $410 from $365. Citigroup raised the price target to $360 from $320.

Barclays lifted the target price to $452 from $361. Credit Suisse upped the target price to $390 from $350. JP Morgan raised the price target to $379 from $357. D.A. Davidson upped the target price to $376 from $361. Oppenheimer lifted the target price to $385 from $360. Piper Sandler increased the target price to $386 from $361.

“Like many others in the consumer cyclical sector, narrow-moat Ulta Beauty crushed all sales and earnings expectations in 2021’s first quarter as pent-up demand and government stimulus encouraged strong spending. However, we anticipate some of these factors will fade as the year progresses, and Ulta’s full-year guidance suggests as much, as its implied sales for the next three quarters are in line with our prior view,” noted David Swartz, equity analyst at Morningstar.

“Regardless, we expect to raise our per share fair value estimate of $228 by a high-single-digit percentage on the first-quarter outperformance, though we view Ulta’s shares (trading at about 30 times projected 2021 EPS of just under $12) as overvalued.”

Check out FX Empire’s earnings calendar

What to Expect From Lululemon’s Q1 Earnings Report on Thursday

The Vancouver-based retailer healthy lifestyle-inspired athletic retailer Lululemon is expected to report its fiscal first-quarter earnings of $0.90 per share, which represents year-over-year growth of over 309% from $0.22 per share seen in the same period a year ago.

The apparel retailer would post year-over-year revenue growth of over 70% to $1.12 billion. In the last four quarters, on average, Lululemon has beaten earnings estimates by over 13%.

The company is expected to report earnings after market close on Thursday, June 3. Lululemon shares fell over 7% so far this year.

Analyst Comments

“Revenue & GM upside could yield a 16c 1Q21 EPS beat vs. the Street. While 1Q21 beats & raises haven’t been enough to send most Softline retailers’ shares higher, Lululemon (LULU) may be an exception as investors move up the quality curve. Trim PT to $377 on an updated WACC; raise 1Q21 EPS on better sales,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“We raise our 1Q21 EPS expectation to 92c from 90c prior on an improved revenue forecast, slightly offset by higher SG&A expense. But we see room for revenue & GM-driven upside, which could push 1Q21 EPS to $1.06. We raise our 1Q21 revenue estimate above the high end of guidance on better-than-expected, more durable 1Q21 eCommerce revenue strength exhibited by LULU’s specialty retail counterparts. However, we still see room for upside, as our revenue forecast assumes a 21% 2Y CAGR vs. 4Q20 +24% y/y & 3Q20 +22% y/y. If we were to assume revenue remains at the 24% 2Y CAGR level delivered in 4Q20, 1Q21 topline could be as high as $1.2B. This would add 4c to our EPS estimate, resulting in 96c EPS.”

Lululemon Stock Price Forecast

Fifteen analysts who offered stock ratings for Lululemon in the last three months forecast the average price in 12 months of $397.33 with a high forecast of $465.00 and a low forecast of $330.00.

The average price target represents a 22.96% increase from the last price of $323.13. Of those 15 analysts, 12 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley slashed the stock price forecast to $377 from $394 with a high of $476 under a bull scenario and $138 under the worst-case scenario. The firm gave an “Equal-weight” rating on the athletic apparel company’s stock.

Several other analysts have also updated their stock outlook. Piper Sandler decreased their target price to $478 from $490 and set an “overweight” rating. TheStreet downgraded from a “b” rating to a “c+” rating.

Cowen reduced their price objective to $389 from $409 and set an “outperform” rating. Robert W. Baird reduced their price objective to $395 from $425and set an “outperform” rating.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Zoom, Advance Auto Parts, Lululemon and Cooper Companies in Focus

Earnings Calendar For The Week Of May 31

Monday (May 31)

There are no major earnings scheduled

Tuesday (June 1)

IN THE SPOTLIGHT: ZOOM

The San Jose, California-based communications technology company Zoom is expected to report its first-quarter earnings of $0.99 per share, which represents year-over-year growth of about 395% from $0.20 per share seen in the same period a year ago.

The company, which provides videotelephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of 175.8% to $905.24 million.

For first-quarter fiscal 2022, Zoom forecasts revenues in the range of $900 million and $905 million. Non-GAAP income from operations is expected in the range of $295 million and $300 million. Moreover, non-GAAP earnings are expected in the 95-97 cents-per-share range.

The cloud video communications provider forecasts revenues in the range of $3.760 billion and $3.780 billion for the full fiscal year.

“Sentiment improving, but still leans negative heading into FQ1. Commentary around 2H churn / Phone still likely more incremental to move vs. 1Q print / 2Q guide. Profitability potential meaningful LT, but balanced in NT by churn concerns, keeping us EW into print,” noted Meta A Marshall, an equity analyst at Morgan Stanley.

Zoom has established its position as the newly emerged leader in video conferencing, now a growth market, largely credible to the company itself given an introduction of a solution that employees actually use. The company has a meaningful competitive moat built on more than just architecture, but a rapid uptick in video usage has attracted significant investment efforts from competitors. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins encouraging. Environment post-COVID and large-scale WFH, and timing to reach, less certain.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JUNE 1

Ticker Company EPS Forecast
BNS Scotiabank $1.45
HPE Hewlett Packard $0.42
AMBA Ambarella $0.17
MDLA Medallia, Inc. -$0.07
ZM Zoom Video Communications $0.99

Wednesday (June 2)

IN THE SPOTLIGHT: ADVANCE AUTO PARTS

The leading automotive aftermarket parts retailer is expected to report its first-quarter earnings of $3.05 per share, which represents year-over-year growth of over 235% from $0.91 per share seen in the same period a year ago. The company would post revenues of $3.31 billion.

AAP operates in a defensive (recession-resistant) category and has one of the largest long-term EBIT margin expansion opportunities in our coverage (we estimate 300-400 bps over time). COVID-19 slowed parts of AAP’s transformation but gross and EBIT margin upside from internal initiatives is still expected beginning in 2021,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“Significant and improving FCF generation plus share repurchases likely to enhance EPS growth. We think the combination of a defensive category, AAP’s progress generating stable top-line growth, and significant margin upside all make for a positive risk/reward skew.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JUNE 2

Ticker Company EPS Forecast
DCI Donaldson $0.58
AAP Advance Auto Parts $3.05
NTAP NetApp $1.12
PVH PVH $0.83
CLDR Cloudera Inc. $0.08
SPLK Splunk -$0.70
GWRE Guidewire Software -$0.24
AI Arlington Asset Investment -$0.25
SMAR Smartsheet Inc. -$0.14
SMTC Semtech $0.52
OMVJF OMV $0.97

Thursday (June 3)

IN THE SPOTLIGHT: LULULEMON ATHLETICA, COOPER COMPANIES

LULULEMON ATHLETICA: The Vancouver-based retailer healthy lifestyle-inspired athletic retailer is expected to report its fiscal first-quarter earnings of $0.90 per share, which represents year-over-year growth of over 309% from $0.22 per share seen in the same period a year ago.

The apparel retailer would post year-over-year revenue growth of over 70% to $1.12 billion.

“Revenue & GM upside could yield a 16c 1Q21 EPS beat vs. the Street. While 1Q21 beats & raises haven’t been enough to send most Softline retailers’ shares higher, LULU may be an exception as investors move up the quality curve. Trim PT to $377 on an updated WACC; raise 1Q21 EPS on better sales,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

COOPER COMPANIES: The global medical device company is expected to report its fiscal first-quarter earnings of $3.09 per share, which represents year-over-year growth of over 104% from $1.51 per share seen in the same period a year ago.

The San Ramon, California-based company would post revenue growth of 31% to $690.73 million.

“Shares of Cooper Companies outperformed the industry in the past six months. The company exited the fiscal first quarter on a strong note, wherein both earnings and revenues beat their respective consensus mark,” noted analysts at ZACKS Research.

“The company witnessed solid performance across its core CVI and CSI units during the quarter under review. Expansion in both gross and operating margins is a positive. Management at Cooper Companies remains optimistic about the Clarity, MyDay and Biofinity suite of products and the portfolio of daily silicone hydrogel lenses, which makes it one of the leaders in the soft contact lens market.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JUNE 3

Ticker Company EPS Forecast
SJM J.M. Smucker $1.66
CIEN Ciena $0.48
TTC Toro $1.18
LULU Lululemon Athletica $0.90
WORK Slack Technologies -$0.01
MDB MongoDB Inc -$0.35
SAIC Science Applications International $1.53
DOCU DocuSign Inc. $0.28
AVGO Avago Technologies $6.43
FIVE Five Below $0.65
PD PagerDuty Inc. -$0.09
COO Cooper Companies $3.09
CRWD CrowdStrike Holdings Inc. Cl A $0.06
PLUG Plug Power -$0.08
JOBS 51job $0.43
TOELY Tokyo Electron Ltd PK $1.25
ASEKY Aisin Seiki Co $0.88
AUOTY AU Optronics $0.45

Friday (June 4)

There are no major earnings scheduled

Veeva Systems Shares Surge 14% After Q1 Earnings Beat; Target Price $329

Veeva Systems shares surged as much as 14% on Friday, a day after the cloud-computing company reported better-than-expected earnings in the first quarter and lifted its annual revenue outlook to $1,815 million-$1,825 million.

The cloud-computing company said its total revenue rose 29% year over year to $433.6 million. That beat the Wall Street consensus estimates of around $410.1 billion. Subscription services revenues for the first quarter were $341.1 million, up from $270.2 million one year ago, an increase of 26% year over year.

For the quarter ended April 30, 2021, fully diluted net income per share was $0.71, compared to $0.54 one year ago, while non-GAAP fully diluted net income per share was $0.91, compared to $0.66 one year ago. That was higher than the market expectations of $0.78.

Veeva Systems shares rose as much as 14% to $302 on Friday, a day after the quarterly earnings report. The stock rose over 8% so far this year.

Analyst Comments

Veeva delivered in typical fashion a healthy beat, starting off FY22 on strong footing. With strength across both Commercial Cloud and Vault, and revenue flowing through to drive margins and FCF, elegance of the model is undeniable. As our estimates move up, we remain Overweight and increase price target to $350,” noted Stan Zlotsky, equity analyst at Morgan Stanley.

Veeva’s core products provide SaaS solutions for the Life Sciences industry, targeting $10B+ of spend today with potential overtime to address more of the $44B Life Sciences spend on IT, leveraging the company’s strong brand recognition and expanding its TAM into other regulated industries and use cases. As Veeva penetrates this large TAM, we see a sustainable 17% revenue CAGR over the next 5 years. Our Price Target is based on 2.4x EV/CY25 FCF/Growth adjusted, a premium to large-cap peers, but justified given the long term FCF durability and large market opportunity.”

Veeva Systems Stock Price Forecast

Seventeen analysts who offered stock ratings for Veeva Systems in the last three months forecast the average price in 12 months of $329.82 with a high forecast of $360.00 and a low forecast of $270.00.

The average price target represents an 11.80% increase from the last price of $295.00. Of those 17 analysts, 12 rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast of $350 from $340 with a high of $558 under a bull scenario and $204 under the worst-case scenario. The firm gave an “Overweight” rating on the cloud-computing company’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to $270 from $250. Stifel lifted the target price to $345 from $325. Cowen and company increased the target price to $70 from $65. Citigroup raised the price target to $340 from $335. Piper Sandler lifted the target price to $360 from $350. JPMorgan slashed the target price to $309 from $313.

Check out FX Empire’s earnings calendar