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

Earnings Calendar For The Week Of June 14

Monday (June 14)

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

Tuesday (June 15)

IN THE SPOTLIGHT: ORACLE

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

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

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

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

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

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

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

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

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

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

Wednesday (June 16)

IN THE SPOTLIGHT: LENNAR

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

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

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

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

Thursday (June 17)

IN THE SPOTLIGHT: ADOBE

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

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

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

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

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

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

Friday (June 18)

There are no major earnings scheduled

Homebuilder Stocks Rally as Housing Prices Climb Higher

The Case-Shiller 20-city Composite Index, representing home prices in U.S. urban markets, increased 13.3% year-over-year. Home prices rose the most across Phoenix, Ariz., San Diego, Calif., and Seattle, Wash.

As U.S. home prices continue to climb higher, housing stocks are benefiting, including Toll Brothers, D.R. Horton and Lennar, all of which are trading decidedly in the green today. According to Allianz chief economic adviser Mohamed El-Erian, “the latest data came in hotter than expected.”

Source: Twitter

The latest economic indicator comes on the heels of the recently released housing starts and building permits data, which according to Stansberry Investor shows that demand is outpacing supply in the housing market. This isn’t apparent at first glance, since both sets of results fell short of expectations. But if you dig deeper, you see that housing starts returned to 2006 highs, suggesting that construction is underway, a bet that buyers are probably in the pipeline.

Homebuilder stocks are off their peak levels of the month, which could represent a buying opportunity. Evercore ISI analyst Stephen Kim is feeling good about Lennar (LEN), D.R. Horton (DHI) and Toll Brothers (TOL), saying that the current supply/demand dynamics are “15 years in the making and [are] impervious to rapid change.”

Lennar Lift

Lennar is up 2.6% today to USD 97.65, inching closer to its 52-week high of USD 110. The stock trades at about eight-times this year’s consensus earnings estimate, as per ISI’s Kim, who has a USD 121 price target on LEN.

Steep Toll

Toll Brothers is up 2.5% at last check. The stock trades at approximately 11 times its projected 2021 earnings, according to Kim, who has a USD 85 price target on TOL.

D.R. Horton

D.R. Horton stock is up nearly 3% today. The stock trades at eight times its 2021 estimated earnings. Kim has a price target of USD 123 attached to DHI.

Housing Mood

The mood in the housing market is upbeat, and the sector appears to be only getting stronger as the economic recovery continues to unfold. While there is no telling how long it can last, as long as the fundamentals remain sound and momentum continues, chances are good that homebuilder stocks have more runway for gains and any pullback should be viewed as a buying opportunity.

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

Best ETFs For June 2021

A portfolio of outlier stocks can become chock full of monster gains for years to come, if chosen wisely.

But wouldn’t it be great if there was already a collection of outliers we could buy without even having to think about it?

Well maybe there is a way to do just that… through outlier ETFs.

So, here I’m going to give you the best ETFs that big money is getting involved in this month.

First thing’s first: to find them, I looked at all the ETFs making Big Money signals. I did that by heading over to MAPsignals.com and then looked at the Big Money ETF Buys and Sells chart. I looked at days with the biggest buying, circled here:

Once I had all the ETFs, I wanted to know which were the best potential opportunities. ETFs are baskets of stocks. And because MAPsignals scores over 6,000 stocks every day, as long as I know which stocks make up the ETFs, I can rank them all.

Here are the 5 best ETFs with scores: The Composite score, Technical score, and Fundamental score. These were computed by accounting for each components stock’s score and its associated weighting in the ETF. (keep in mind that weightings will change from time to time)

Below we see each ETF, their recent Big Money activity, and their scores. XLF, ITB, and XLC are top ranked ETFs. That makes sense because financials, home builders, and communications stocks have been leading the market much of this year so far.

IGV and ARKG, however, rank low on our list of ETFs. But there is opportunity here because the low scores are due to weak technicals. Big Money has been selling these ETFs, largely because they are heavily concentrated in growth stocks. But these stocks have excellent fundamentals: growing sales and earnings and big profits. These weak ETFs represent great potential bargains.

Let’s quickly look at the year-to-date performance of these 5 ETFs:

  • XLF +29.3%
  • ITB +29.2%
  • XLC +13.5%
  • IGV -4.0%
  • ARKG -18.1%

Now let’s quickly look at Big Money buying in the ETFs. Each chart below has many green bars which represents unusually large buying. The few red bars represent unusually large selling. What jumps out is the huge buying in all the ETFs.

Only with IGV and ARKG, there was recent selling too. But again, selling on ETFs and stocks with great fundamentals represents a value opportunity.

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Here’s why I like these ETFs: they are highly concentrated with fundamentally superior stocks. Below we see a table of three stocks in each ETF. They are some of the highest weightings in each.

Notice their fundamental scores are very strong on a scale from 0-100. This means strong growing sales, earnings, and profits over one and three years. This is how MAPsignals boils down all its fundamental research into one elegant score.

Now with XLF, ITB, and XLC – we see the stocks also have strong technical scores. That means Big Money has been pouring into them, lifting them to new highs. They are buoyant with Big Money support. But in IGV and AKG, we see weak technical scores. This means Big Money has been exiting the stocks.

But before you get spooked, let’s keep the recent environment in mind: Growth has fallen out of favor while value and reopen stocks have become all the rage. But it’s essential to remember these growth companies create phenomenal products and services enhancing our lives. I don’t foresee that stopping in the future. The recent selling is temporary and thematic.

What really drives this home is looking at how long-term Big Money buying can lead to monstrous gains. Below are charts showing all the instances these stocks were Top stocks in our research since 2015: our weekly report of outliers. We don’t need to go into details on each chart.

I’d like you to notice a few things:

  • When Big Money buying pours in, stocks go up
  • Repeated outliers, especially for years often means outsized gains

Owning outlier stocks is the way I try to beat markets. Easy exposure to many stocks can be achieved by buying ETFs. But just like anything, you must be in the 1% if you want to be in the 1%.

We can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when we catalog the components and find outlier stocks underneath… that’s the winning recipe.

So, there you have it: the 5 best ETFs that Big Money has been trafficking in recently. Outlier ETFs hold outlier stocks. Finding them is the key to finding potentially outlier gains.

Now let’s look at what those look like:

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

The Bottom Line

XLF, ITB, XLC, IGV, & ARKG represent top ETFs for June 2021. Financials, homebuilders, & Communications stocks have performed well lately, which should continue. Software and Genomics companies have reached interesting levels, too. Paying attention to the fundamental quality of ETF constituents is paramount.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions GOOGL, CRM, & REGN in managed accounts, but no positions in XLF, ITB, XLC, IGV, ARKG, BLK, SCHW, SPGI, DHI, LEN, LOW, FB, ATVI, ADBE, MSFT, TDOC, & VRTX at the time of publication.

Investment Research Disclaimer

Homebuilder Lennar Tops Earnings Estimates, Target Price $109 in Best Case

Miami-based home construction company Lennar reported better-than-expected earnings in the first quarter, largely driven by rising housing demand due to record low mortgage rates amid the COVID-19 pandemic, sending its shares up about 2% in extended trading on Tuesday.

The first-quarter net earnings attributable to Lennar in 2021 were $1.0 billion, or $3.20 per diluted share, compared to first-quarter net earnings attributable to Lennar in 2020 of $398.5 million, or $1.27 per diluted share. Adjusted earnings per share rose over 60% year-on-year to $2.04 per share, beating Wall Street consensus estimates of $1.71 per share.

The United States’ leading homebuilders said its revenues from home sales increased 18% in the first quarter of 2021 to $4.9 billion from $4.1 billion in the first quarter of 2020. Revenues were higher primarily due to a 19% increase in the number of home deliveries, excluding unconsolidated entities.

For the second quarter of 2021, the company forecasts new orders in the range of 16,500-16,700 and deliveries between 14,200-14,400 with an average sales price of $405,000 and a gross margin on home sales of 25%. For the fiscal year 2021, Lennar forecasts deliveries between 62,000-64,000 with an average sales price of $400,000 and gross margin on home sales of 25%

Lennar shares, which surged over 35% in 2020, rose over 16% so far this year. The shares were 1.6% higher at $90.1 in extended trading on Tuesday.

Analyst Comments

“This was yet another excellent quarter, with progress made on the company’s strategic initiatives as well as robust operational performance. We expect shares to perform well tomorrow. We plan to update our estimates and outlook after the conference call on 3/17/21 at 11 AM ET,” noted Carl E. Reichardt, equity analyst at BTIG.

“Key questions: (1) How did the poor weather in Texas impact orders and closings in 1Q21, and what will be the spillover impact in 2Q21? (2) With the drop in community count higher than we expected, what is the strategy and timing around new openings? (3) What has the impact of higher interest rates been on recent weeks’ traffic and orders? (4) Can LEN speak to the magnitude and timing of the monetization of additional technology investments, and offer more color on how internal technology investment is helping to lower costs?”

Lennar Stock Price Forecast

Eleven analysts who offered stock ratings for Lennar in the last three months forecast the average price in 12 months of $97.40 with a high forecast of $109.00 and a low forecast of $90.00.

The average price target represents a 9.80% increase from the last price of $88.71. Of those 11 analysts, eight rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Several other analysts have also updated their stock outlook. Wedbush raised the price target to $102 from $88. UBS increased the price target to $83 from $77. BTIG Research raised their price target on shares to $104 from $99 and gave the stock a “buy” rating. Bank of America lifted their target price to $97 from $87. Argus lifted their target price to $100 from $88 and gave the stock a “buy” rating. ZACKS Research set the target price at $96 and gave a neutral rating on the stock.

“Shares of Lennar have outperformed the industry in the past six months. The company is benefiting from effective cost control and focus on making its homebuilding platform more efficient, which in turn resulted in higher operating leverage. Higher demand for new homes backed by declining mortgage rates and low inventory levels bodes well. Focus on the lighter land strategy to boost free cash flow will bolster the balance sheet and thereby drive returns,” said equity analysts at ZACKS Research.

“Moreover, solid first quarter 2021 guidance indicates margin expansion and deliveries to increase significantly. Also, earnings estimates for 2021 have increased over the past 30 days. However, higher land, labour and material costs are concerning. This may exert pressure on the company’s upcoming quarters as well.”

We think it is good to buy at the current level and target $109 in the long-term as 150-day Moving Average and 100-200-day MACD Oscillator signals a buying opportunity.

Check out FX Empire’s earnings calendar

Lennar to Beat Earnings Estimates; Stock Has Over 20% Upside Potential

Lennar Corp, a home construction and real estate company, is expected to report a profit of $1.71 per share in the fiscal first quarter, which represents year-over-year growth of about 35% from $1.27 per share seen in the same quarter a year ago.

Miami, Florida-based company would post year-over-year revenue growth of about 14% to around $5.1 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 35%.

According to ZACKS research, on average equity analysts forecast that the real estate company will report full-year earnings of $9.14 per share for this fiscal year, with EPS estimates ranging from $7.97 to $9.60. For the next year, analysts forecast that the company will report earnings of $9.51 per share, with EPS estimates ranging from $8.39 to $10.35.

Lennar shares, which surged over 35% in 2020, rose about 15% so far this year. At the time of writing, the stock traded 0.6% lower at $87.46 on Monday.

Analyst Comments

“Shares of Lennar have outperformed the industry in the past six months. The company is benefiting from effective cost control and focus on making its homebuilding platform more efficient, which in turn resulted in higher operating leverage. Higher demand for new homes backed by declining mortgage rates and low inventory levels bodes well. Focus on the lighter land strategy to boost free cash flow will bolster the balance sheet and thereby drive returns,” said equity analysts at ZACKS Research.

“Moreover, solid first quarter 2021 guidance indicates margin expansion and deliveries to increase significantly. Also, earnings estimates for 2021 have increased over the past 30 days. However, higher land, labour and material costs are concerning. This may exert pressure on the company’s upcoming quarters as well.”

Lennar Stock Price Forecast

Ten analysts who offered stock ratings for Lennar in the last three months forecast the average price in 12 months of $97.40 with a high forecast of $109.00 and a low forecast of $90.00.

The average price target represents an 11.15% increase from the last price of $87.63. Of those ten analysts, seven rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Several other analysts have also updated their stock outlook. Wedbush raised the price target to $102 from $88. UBS increased the price target to $83 from $77. BTIG Research raised their price target on shares to $104 from $99 and gave the stock a “buy” rating. Bank of America lifted their target price to $97 from $87. Argus lifted their target price to $100 from $88 and gave the stock a “buy” rating.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Lennar, Five Below, Dollar General, FedEx and Nike in Focus

Earnings Calendar For The Week Of March 15

Monday (March 15)

Ticker Company EPS Forecast
YALA Yalla $0.12
FCEL Fuelcell Energy -$0.04
YY YY $7.54
HQY Healthequity Inc $0.40
CBPO China Biologic $0.69
NGHC National General $0.73
MNTA Momenta Pharmaceuticals -$0.50
KHOLY Koc Holdings AS $0.55
PKX Posco $1.52
PE Parsley Energy $0.25
WPX WPX Energy $0.04
BEAT BioTelemetry $0.48
JOBS 51job $6.40
BKRKY Bank Rakyat $0.13

Tuesday (March 16)

IN THE SPOTLIGHT: LENNAR

Lennar Corp, a home construction and real estate company, is expected to report a profit of $1.71 per share in the first quarter, which represents year-over-year growth of about 35% from $1.27 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 35%.

Miami, Florida-based company would post year-over-year revenue growth of about 14% to around $5.1 billion.

“Shares of Lennar have outperformed the industry in the past six months. The company is benefiting from effective cost control and focus on making its homebuilding platform more efficient, which in turn resulted in higher operating leverage. Higher demand for new homes backed by declining mortgage rates and low inventory levels bodes well. Focus on the lighter land strategy to boost free cash flow will bolster the balance sheet and thereby drive returns,” said equity analysts at ZACKS Research.

“Moreover, solid first quarter 2021 guidance indicates margin expansion and deliveries to increase significantly. Also, earnings estimates for 2021 have increased over the past 30 days. However, higher land, labour and material costs are concerning. This may exert pressure on the company’s upcoming quarters as well.”

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

Ticker Company EPS Forecast
UTG Unite Group £45.10
GRG Greggs -£10.80
FERGY Ferguson ADR $0.22
JBL Jabil Circuit $0.94
CRWD CrowdStrike Holdings Inc. Cl A $0.09
SMAR Smartsheet Inc. -$0.13
LEN Lennar $1.71
WF Woori Bank $0.75
HTHT China Lodging $2.51
ANTO Antofagasta £0.42
HDS HD Supply Holdings $0.39
WG John Wood Group £0.14

 

Wednesday (March 17)

IN THE SPOTLIGHT: FIVE BELOW

Five Below, a discount retailer that sells products that cost up to $5, is expected to report a profit of $2.11 per share in the fourth quarter, which represents year-over-year growth of over 7% from $1.96 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 44%.

The Philadelphia, Pennsylvania-based company would post year-over-year revenue growth of about 25% to around $857.1 million.

FIVE reported strong Holiday sales results in Jan, and 4Q guidance was better than expected. With 4Q largely preannounced, we believe investor focus will turn to the expansion of partnerships (with Bugha here and Andrea Pippins here), Five Beyond progress, and potential guidance. For 4Q, we are estimating EPS to be $2.12, at the high end of mgmt’s guidance of $2.08-2.12 and ahead of cons. of $2.11,” noted Randal J. Konik, equity analyst at Jefferies.

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

Ticker Company EPS Forecast
KC Kutcho Copper -$0.84
CTAS Cintas $2.19
WSM Williams Sonoma $3.36
FIVE Five Below $2.11
PD PagerDuty Inc. -$0.11
SMTC Semtech $0.48
TCEHY Tencent $0.50
ILD Iliad €0.75
EGFEY Eurobank Ergasias S.A. ADR $0.01
MLHR Herman Miller $0.58

 

Thursday (March 18)

IN THE SPOTLIGHT: DOLLAR GENERAL, FEDEX, NIKE

DOLLAR GENERAL: The U.S. largest discount retailer by number of stores is expected to report a profit of $2.72 in the fourth quarter, which represents year-over-year growth of over 29% from $2.10 per share seen in the same quarter a year ago.

The company, which offers merchandise including consumables, seasonal, home products and apparel at everyday low prices, would post year-over-year revenue growth of over 15% to around $8 billion.

“We believe cons. ests. for 4Q and next year are likely conservative. We est.4Q EPS of $2.75 vs. cons. of $2.72 and EPS in ’21 of $10.68 vs cons. of $10.04. When DLTR reported 4Q, FD comps were better than expected (+8.1%, ahead of cons. of+6.7%, and above 3Q levels). Note, however, that DG’s comp has outperformed that of FD by ~400bps over the last 11 quarters, on average, and DG’s comp has outperformed that of FD by >600bps through the first three quarters of 2020, on average. Thus, we believe DG’s 4Q comp could be ~12% (or perhaps even higher), given the company exited 3Q with a comp of +14%, discussed,” Jefferies’ Konik added.

FEDEX: Memphis, Tennessee-based multinational delivery services company is expected to report a profit of $3.35 in the fiscal third quarter, which represents year-over-year growth of over 137% from $1.41 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 36%.

The package delivery company would post year-over-year revenue growth of over 13% to around $20 billion.

“We expect a modest beat for F3Q21 as peak-season momentum exiting 2020 should help offset a few cost headwinds. However, both numbers and expectations face tough comps and receding momentum in FY22, which will be challenging to overcome. Remain Equal-weight,” Ravi Shanker, 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 (14x PE) on current EPS.”

NIKE: The world’s largest athletic footwear and apparel seller is expected to report a profit of $0.76 in the fiscal third quarter, which represents a year-over-year decline of over 2% from $0.78 per share seen in the same quarter a year ago.

The Beaverton, Oregon-based company would post year-over-year revenue growth of over 8% to around $11 billion.

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

Ticker Company EPS Forecast
UTZ Utz Brands $0.10
DG Dollar General $2.72
CMC Commercial Metals $0.51
WB Weibo $0.71
ACN Accenture $1.89
SIG Signet Jewelers $3.59
WOOF VCA $0.12
OLLI Ollies Bargain Outlet Holdings Inc $0.85
FDX FedEx $3.35
NKE Nike $0.76
TOELY Tokyo Electron Ltd PK $0.80
GOL Gol Linhas Aereas Inteligentes -$0.36
AUOTY AU Optronics $0.31

 

Friday (March 19)

Ticker Company EPS Forecast
ERJ Embraer -$0.31
CHL China Mobile $2.01

 

Homebuilder Lennar’s Shares Rise on Earnings Beat; Target Price $89

Miami-based home construction company Lennar reported better-than-expected earnings in the fourth quarter, largely driven by rising housing demand due to record low mortgage rates amid the COVID-19 pandemic, sending its shares up about 4% in extended trading on Wednesday.

The largest home construction company in the United States said its net earnings in 2020 were $882.8 million in the fourth quarter ended November 30, 2020, or $2.82 per diluted share, compared to $674.3 million, or $2.13 per diluted share in the fourth quarter of 2019. That was higher than the market expectations of $2.35 per share.

Revenue dipped to $6.83 billion, from $6.97 billion a year earlier, better than the Wall Street consensus estimate of $6.65 billion.

Lennar forecasts financial services operating earnings between $110 million – $115 million in the first quarter of 2021 and $400 million – $425 million in the fiscal year 2021.

Following this release, Lennar’s shares surged about 4% to $77.09 in extended trading on Wednesday after closing 0.56% higher at $74.29. The homebuilder’s stock is up over 30% so far this year.

Analyst Comments

“4Q20 results are encouraging as Lennar (LEN) is achieving a sales pace above guidance as well as realizing pricing power, leading to expanded margin. Lennar ramped upstarts in the quarter, increasing +28% YoY in an effort to make up for production lost earlier in the year due to the pandemic, and to feed still-significant incoming demand,” said Carl E. Reichard, equity analyst at BTIG.

“FY21 guidance looks especially good; the midpoint of LEN’s delivery range is +8% above our estimate and GM is 80 bps ahead of what we modelled. The 1Q21 guidance has orders 18% above our estimate and GM 210 bps ahead, although closings are a little light (2% below our estimate). All in, this was a notably strong quarter, with an exceptionally robust outlook, and we expect shares to perform well tomorrow,” E. Reichard added.

Lennar Stock Price Forecast

Six equity analysts forecast the average price in 12 months at $89.60 with a high forecast of $94.00 and a low forecast of $77.00. The average price target represents a 20.61% increase from the last price of $74.29. From those six analysts, three rated “Buy”, three rated “Hold” and none “Sell”, according to Tipranks.

Lennar had its price target upped by Wedbush from $81.00 to $86.00. They currently have an outperform rating on the construction company’s stock. UBS initiated with a “Neutral” rating and target price of $77. Truist Securities raised the price target to $93 from $62. Bank of America boosted their price objective to $90 from $80 and gave the company a neutral rating. Zacks Investment Research upgraded to a buy rating from hold and set a $81 price objective.

We think it is good to buy at the current level and target $89 in the long-term as 150-day Moving Average and 100-200-day MACD Oscillator signals a buying opportunity.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Lennar, FedEx, Darden Restaurants and Nike in Focus

Earnings Calendar For The Week Of December 14

Monday (December 14)

No major earnings scheduled for release.

However, it is worth noting HEXO Corp, a Canada-based company that creates and distributes products to serve the Canadian cannabis market, will release its financial results for the fiscal first quarter 2021 on Monday before the stock market opens.

Hexo earnings will provide a direction for the emerging cannabis industry. Failing to grow on earnings and revenue after consolidation, will lead to a worse stock dilution scenario for the company. Hexo’s statement will test market sentiments on Monday for the higher-risk, higher-reward cannabis sector.

Tuesday (December 15)

Ticker Company EPS Forecast
SHB Shaftesbury -£1.52
NDSN Nordson $1.53
HOCPY Hoya Corp $0.74

 

Wednesday (December 16)

IN THE SPOTLIGHT: LENNAR

LENNAR: Lennar, a home construction and real estate company, is expected to report a profit of $2.35 in the fourth quarter, up from $2.13 per share seen in the same quarter a year ago, which would indicate a positive year-over-year growth rate of more than 11%.

According to Zacks Research, equity strategists forecasts full-year earnings of $7.46 per share for the current financial year, with EPS estimates between $7.39 to $7.53. For the next financial year, strategists expect the company will post earnings of $7.97 per share, with EPS estimates between $6.30 to $9.42.

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

Ticker Company EPS Forecast
TTC Toro $0.49
ABM ABM Industries $0.70
MLHR Herman Miller $0.57
MU Micron Technology $0.70
AUOTY AU Optronics $0.09

 

Thursday (December 17)

IN THE SPOTLIGHT: FEDEX

FedEx, the world’s leading express delivery company, is expected to report a profit of $3.93 in the second quarter, down from the previous $4.87. The company has a decent earnings history as its bottom line outshined the consensus mark in two of the trailing four quarters and missed the same in the remaining two. The average beat is 37.7%, according to Zacks Investment Research.

The continued surge in e-commerce demand during the current coronavirus-ravaged times is likely to have boosted revenues in the to-be-reported quarter. With the pandemic largely restricting people to their homes, the need for door-to-door delivery of essentials during this unprecedented crisis is rising, according to Zacks Investment Research.

“E-commerce trends remain robust, which should support results, but the bar is much higher too. All eyes will be on two major areas: (1) more evidence of the breaking wave that could set up a challenging F2H21/2022 and (2) what is peak season going to look like as we have even less visibility than usual,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“We expect a beat for F2Q21 vs. current consensus. We are modelling EPS of $4.09 (adj for TNT integration costs), 10% above cons. of $3.73. Our FY21 EPS of $17.80 is slightly below our prior est. of $18.08 but is 12% above cons. of $15.89 (all adj. for TNT integration costs for comparability). The main drivers of the beat are a continued strong pricing environment in Express International esp. in Freight as well as more a more spread out peak season in Ground as retailers attempt to avoid service breakdowns and surcharges. This will benefit volume and F2Q results at the cost of pricing and F3Q results, in our view,” Shanker added.

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

Ticker Company EPS Forecast
WB Weibo $0.62
ACN Accenture $2.05
GIS General Mills $0.97
JBL Jabil Circuit $1.27
SAFM Sanderson Farms -$0.03
WOR Worthington Industries $0.69
RLAY Relay Therapeutics Inc. -$0.32
ASEKY Aisin Seiki Co $0.42

 

Friday (December 18)

IN THE SPOTLIGHT: DARDEN RESTAURANTS

Darden, which operates full-service restaurants in the United States and Canada, is expected to report a profit of $0.71 in the second quarter, up from the previous $0.56. The Orlando-based multi-brand restaurant operator has set its Q2 2021 pre-market guidance at 0.65-0.75 EPS.

“Darden will report 2Q21 (November) results on December 18th, before market open. We model adjusted EPS of $0.68, below the midpoint of $0.65 to $0.75 guidance and$0.73 consensus, though our below-consensus positioning is not purposeful. Compared to consensus, we model lower restaurant-level margins of 18.9% vs 19.4% Consensus Metrix, which is partially offset by our lower G&A estimate,” said Andrew M. Charles, equity analyst at Cowen and Company.

“We model a revenue decline of 17.5%, which compares to the guidance of -18% total revenue and Consensus Metrix -17.1% and contemplates Olive Garden and Longhorn same-store sales -15% and -10% vs Consensus Metrix -16% and -11%, respectively. At the time of the1Q21 earnings release, Darden indicated that the company was running modestly ahead of-18% guidance and the guidance contemplated 100 bps of headwind from the Thanksgiving calendar shift. We believe what looked like conservative sales guidance when issued in September now looks fair. Indeed, we point to the stability of sales suggested by industry data from September through November, commentary from Mr. Manocha around dining rooms restrictions helping to transfer sales to off-premise channels, and Darden’s lack of third-party delivery availability amid November’s rise in COVID-19 cases/dining room capacity restrictions,” M. Charles added.

IN THE SPOTLIGHT: NIKE

Nike, the largest seller of athletic footwear and apparel in the world, is expected to report a profit of $0.62 in the second quarter, down from the previous $0.95.

“A faster North America wholesale restart, transitory GM benefits, SG&A control, & lean inventory suggest 2Q upside. Valuation nears highs, but Nike’s more promising revenue and margin outlook post-COVID-19 should continue to drive the stock higher. Lift price target to $165,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“Further, despite Nike’s valuation nearing the upper end of its historical range (37x 2022e consensus P/E vs. 19-38x historical range) as well as its impressive YTD stock run (+35% vs. S&P 500 +14% as of 12/4), we see room for additional share price appreciation on 1) positive EPS revisions on potential upside surprise to the upcoming quarter as well as against management’s seemingly conservative full year (May-21 year) guidance (as outlined in our four key points below), 2) Nike’s relevant exposure to activewear, one of the fastest-growing footwear & apparel categories, a trend which has only been accelerated by COVID-19, and should remain an ongoing tailwind, and 3) Nike’s accelerated shift to its DTC channel, and in particular eCommerce, which should enhance its long-term revenue, margin, and EPS growth,” Greenberger added.

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

Ticker Company EPS Forecast
DRI Darden Restaurants $0.71
NKE Nike $0.62
CUK Carnival -$1.88
CCL Carnival -$1.88
CCL Carnival -£1.43

 

Lennar Beats Earnings Expectations – Shares Slide

Lennar Corporation (LEN) shares plunged 4.24% in extended-hours trading Monday despite the nation’s largest homebuilder surpassing Wall Street’s quarterly earnings estimates.

The Miami-based home construction company disclosed a third quarter (Q3) adjusted profit of $2.12 per share, hammering past analysts estimate of $1.51 a share. Moreover, the bottom line grew 33% from a year ago and has surpassed analyst EPS forecasts for five consecutive quarters. Meanwhile, sales of $5.87 billion topped the consensus forecast by 10.10% and came in slightly ahead of the $5.86 billion figure reported a year earlier.

As of Sept. 15, 2020, Lennar stock has a market capitalization of $24 billion, issues a modest 0.65% dividend yield, and is up 33.54% over the last three months. Year to date (YTD), the shares trade over 40% higher.

Home Construction Boom

The homebuilder’s executive chairman Stuart Miller credited the better-than-expected results on record low interest rates and tight supply in the housing market. What’s more, Miller sees these macro trends continuing. “Given strong demand and limited new and existing home inventory, we expect home sales to remain strong for the foreseeable future,” he said in a statement accompanying the earnings call, per Barron’s.

Management expects new orders for the current quarter of 13,800 to 14,300 and deliveries of between 15,500 to 16,000. This compares to 13,054 new orders and 16,391 deliveries in the same quarter last year.

Wall Street View

Analysts remain overwhelmingly bullish on Lennar based on favorable industry tailwinds such as low borrowing costs and changing lifestyle trends brought about by the pandemic. The stock receives 9 ‘Buy’ ratings, 1 ‘Overweight’ rating, and 10 ‘Hold’ ratings. Currently, no research firms recommend selling the shares. Price targets range from as high as $95 to as low as $62, with the average target pegged at $79.97. This implies a slight 1.2% premium to Monday’s $79 close.

Technical Outlook and Trading Tactics

Since the 50-day simple moving average (SMA) crossed above the 200-day SMA in early July to indicate a new uptrend, the stock has continued rising. Therefore, active traders should view any profit taking as a buying opportunity. Look for entries at the $71 level, where the price has flipped previous resistance into support. Those who take a position should protect capital with an initial stop-loss order placed somewhere beneath this month’s low at $71.34 and trail it under each successive higher swing low.