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.

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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.

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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.”

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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

Costco Wholesale Sales Growth Stands Solid; Target Price $445 in Best Case

Costco Wholesale Corporation, which operates a chain of membership-only big-box retail stores, reported a high-than-expected profit in the fiscal third quarter, prompting several analysts to raise their one-year price targets.

The leading warehouse club said its net sales for the quarter jumped 21.7% to $44.38 billion, from $36.45 billion last year. Net sales for the first 36 weeks increased 17.7% to $130.61 billion, from $110.94 billion last year.

Costco’s net income attributable climbed to $1.22 billion, or $2.75 per share, up from $838 million, or $1.89 per share a year ago. That was higher than the Wall Street consensus estimates of $2.31 per share. The company’s total revenue jumped 21.5% to $45.28 billion, beating the market expectations of $43.64 billion.

Costco Wholesale shares rose over 3% so far this year. The stock closed 0.5% higher at $387.5 on Thursday.

Analyst Comments

“We plan to lift our $332 per share valuation of wide-moat Costco by a mid-single-digit percentage after it posted strong third-quarter (ended May 9) earnings. Its 21% revenue growth impressed considering the chain lapped the early days of the pandemic (which included significant customer stock-up activity), but we mostly attribute the results to transitory factors,” noted Zain Akbari, equity analyst at Morningstar.

“So, our long-term forecast still calls for mid-single-digit percentage sales growth and 3%-4% adjusted operating margins. We suggest investors seek a more attractive entry price, particularly considering elevated uncertainty as the customer habits normalize,”

Costco Wholesale Stock Price Forecast

Twenty-two analysts who offered stock ratings for Costco Wholesale in the last three months forecast the average price in 12 months of $400.60 with a high forecast of $445.00 and a low forecast of $325.00.

The average price target represents a 3.38% increase from the last price of $387.50. Of those 22 analysts, 17 rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $410 with a high of $520 under a bull scenario and $270 under the worst-case scenario. The firm gave an “Overweight” rating on the apparel retail company’s stock.

COST’s results have consistently been among the best in Retail. Over the past decade, COST has delivered ~6% comps and ~10% EBIT growth on average. It is rare to find a business with COST’s solid comp/membership growth, while relative e-commerce insulation differentiates its value proposition from other retailers,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We are Overweight even as the stock trades at an elevated valuation given COST’s scarcity value, safety, and scale. In the near-term, we expect incremental sales uplifts from COVID-19 disruption, and earnings power looks stronger despite COVID-19 expenses.”

Several other analysts have also updated their stock outlook. Cowen and company raised the target price to $440 from $410. RBC lifted the target price to $453 from $425. CFRA upped the target price by $55 to $375. Raymond James increased the target price to $415 from $410. JPMorgan raised the target price to $420 from $410.

Check out FX Empire’s earnings calendar

Zoom Q1 Earnings to Climb Nearly Fourfold; Target Price $415

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.

The earnings report is expected to be released on June 1, 2021. 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. Zoom stock fell about 4% so far this year.

Zoom Video is benefiting coronavirus-induced remote working trend. Its efforts to eradicate security and privacy flaws are expected to aid it to expand its user base,” noted analysts at ZACKS Research.

Analyst Comments

“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 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.”

Zoom Stock Price Forecast

Nineteen analysts who offered stock ratings for Zoom Video Communications in the last three months forecast the average price in 12 months of $415.06 with a high forecast of $550.00 and a low forecast of $250.00.

The average price target represents a 27.33% increase from the last price of $325.97. Of those 19 analysts, six rated “Buy”, 11 rated “Hold” while two rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $360 with a high of $480 under a bull scenario and $240 under the worst-case scenario. The firm gave an “Equal-weight” rating on the communications software company’s stock.

Several other analysts have also updated their stock outlook. UBS initiated with neutral rating; price target $325. Citigroup lowered the target price to $362 from $501. Baird slashed the target price to $400 from $550. Mizuho cut the target price to $400 from $550.

Check out FX Empire’s earnings calendar

Best Buy Shares Rise After Q1 Earnings Top Estimates; Target Price $150 in Best Case

Best Buy shares rose about 3% in pre-market trading on Thursday after the Richfield, Minnesota consumer electronics retailer reported better-than-expected earnings and lifted its annual sales forecast.

The company said domestic revenue increased 37.0% to $10.84 billion, largely driven by comparable sales growth of 37.9%, which was partially offset by the loss of revenue from permanent store closures in the past year. The was higher than the Wall Street consensus estimates of about $10.44 billion.

The U.S. retailer reported earnings per share of $2.23 per share, beating the market expectations of $1.34 per share.

Best Buy forecasts comparable sales growth of 3% to 6%, which compares to the prior outlook of -2%) to 1%. In the second quarter, comparable sales growth is expected to grow by nearly 17%.

Following this, Best Buy shares rose about 3% to $120.41 on Thursday. The stock rose over 17% so far this year.

Best Buy Stock Price Forecast

Eight analysts who offered stock ratings for Best Buy in the last three months forecast the average price in 12 months of $123.63 with a high forecast of $150.00 and a low forecast of $86.00.

The average price target represents a 2.37% increase from the last price of $120.77. Of those eight analysts, three rated “Buy”, four rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $115 with a high of $145 under a bull scenario and $82 under the worst-case scenario. The firm gave an “Equal-weight” rating on the consumer electronics retailer’s stock.

Several other analysts have also updated their stock outlook. JP Morgan raised the target price to $118 from $113. Raymond James upped the target price to $130 from $120. UBS lifted the target price to $130 from $120.

Analyst Comments

BBY is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. BBY’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labor management, supply chain and omnichannel underpin our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

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

Check out FX Empire’s earnings calendar

NVIDIA Shares Ease After Topping Earnings Forecasts

NVIDIA Corporation (NVDA) shares slipped in Wednesday’s extended-hours trading session despite the chipmaker surpassing Wall Street’s top and bottom-line expectations.

The Santa Clara-based company posted a first-quarter profit of $3.66 per share, easily exceeding analysts’ expectations of $3.28 a share. Meanwhile, revenue for the period came in at $5.66 billion, with the figure coming in comfortably ahead of the $5.41 billion consensus mark and growing 84% from a year earlier on the back of a surge in demand for graphics chips driven by pandemic gaming. Moreover, the company said it expects sales in the current quarter to increase 62% from a year ago.

However, news that supply issues look like continuing for the foreseeable future spooked investors. “We expect to remain supply-constrained into the second half of the year,” chief financial officer Kress said, per MarketWatch. The company said it planned to manage the shortage by adding software to deter cryptocurrency miners from using its gaming chips. During the quarter, processing chips designed specifically for digital currency generated $155 million in revenues.

Through Wednesday’s close, the NVIDIA share price has a market capitalization of $391 billion, offers a tiny 0.10% dividend yield, and trades 20.26% higher on the year. By comparison, the tech-heavy Nasdaq index has gained 6.59% over the same period. From a valuation standpoint, the stock trades 24% above its five-year average forward earnings multiple of 36.69 times.

Wall Street View

Susquehanna’s Christopher Rolland reiterated his ‘Positive’ rating and $700 price target after Nvidia’s quarterly report. Rolland told investors that demand for the chipmaker’s GPUs remains robust, but he sees sales slowing in the second half of the year as reopenings and physical activities resume across the United States.

Broker coverage remains firmly in the bull camp elsewhere on Wall Street also. The stock receives 29 ‘Buy’ ratings, 5 ‘Overweight’ ratings, 4 ‘Hold’ ratings, 1 ‘Underweight’ rating, and 1 ‘Sell’ rating. Twelve-month price targets range from a Street-high $800 to $380 low, with the median pegged at $675.

Technical Outlook and Trading Tactics

NVIDIA shares have traded within a $175-point range since early September, with the bulls nor the bears able the take control of price action.

Given Wednesday’s after-hours weakness, active traders should consider opening a short position near the trading range’s upper trendline resistance area at $645, while looking to cover near the range’s lower trendline at $470. Protect capital by exiting the trade if the stock breaks out to a new all-time high on above-average volume.

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

Nordstrom Post Deeper Loss in Q1, Shares Fall

Seattle-based luxury department store chain Nordstrom reported a deeper-than-expected loss in the first quarter and said its net sales fell 13% over the first quarter of 2019, sending its shares down over 5% on Wednesday.

The company said net sales increased 44% from the same period in fiscal 2020 and decreased 13% from the same period in fiscal 2019, representing a sequential improvement of 720 basis points relative to the fourth quarter of fiscal 2020.

Nordstrom reported a loss of $166 million, or $1.05 per share, worse than the Wall Street consensus estimates for a loss of $0.57 per share, compared to a loss of $521 million, or $3.33 a share, a year ago. But the company said its total revenue rose to $3.01 billion, beating the market expectations of $2.90 billion.

Nordstrom shares slumped over 5% to $34.63 on Wednesday. The stock rose over 10% so far this year.

Analyst Comments

“1Q EPS miss and management’s conservative outlook drove the stock -7% AMC. This suggests investors expected stronger results on the back of significant retailer beat & raise quarters. We flag conservative guidance appears beat-able, but the good news seems largely priced in. Staying EW on $36 price target,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“Despite the weaker 1Q results relative to peers, we would expect JWN sales & earnings recovery to accelerate through the year. Overall, JWN’s 2021 guidance appears conservative and beatable, which will be necessary to support the shares at this price. All in, we are constructive Nordstrom revenue and margin growth potential for 2021 and into 2022, as it benefits from lagged re-opening tailwinds. But the good news appears priced in.”

Nordstrom Stock Price Forecast

Seven analysts who offered stock ratings for Nordstrom in the last three months forecast the average price in 12 months of $38.57 with a high forecast of $48.00 and a low forecast of $20.00.

The average price target represents an 11.28% increase from the last price of $34.66. Of those seven analysts, two rated “Buy”, four rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast of $36 from $34 with a high of $53 under a bull scenario and $21 under the worst-case scenario. The firm gave an “Equal-weight” rating on the specialty retailer’s stock.

Several other analysts have also updated their stock outlook. Telsey Advisory Group lowered the target price to $36 from $44. Deutsche Bank cut the target price to $40 from $42. JPMorgan slashed the price target to $39 from $42. Barclays raised the target price to $20 from $19.

Check out FX Empire’s earnings calendar

Lordstown Motors Crashes 10% Amid Trimmed Production Forecasts

Shares in electric vehicle truck startup Lordstown Motors Corp. (RIDE) slumped 10.55% in extended-hours trade Monday after the company slashed its full-year production guidance and told investors it needed to raise additional capital.

The company said it now plans to produce half the Endurance electric pickups this year than it had previously anticipated. “Expected Endurance production in 2021 will be limited and would at best be 50% of our prior expectations,” read a company statement accompanying the EV maker’s first quarter (Q1) results, per MarketWatch. During the company’s Q4 earnings call, management flagged a production capacity of 60,000 trucks. Lordstown also told investors it required additional cash to continue funding its business plans and is in the process of securing an Advanced Technology Vehicle Manufacturing loan.

On the earnings front, the company said it made a loss of 72 cents per share in the quarter, much wider than the 28 cents a share figure Wall Street had expected. The bottom line loss also ballooned out from the 16 cents a share loss reported in the year-ago quarter.

Through Monday’s close, Lordstown Motors stock has a market value of $1.6 billion and trades 51.79% lower since the start of the year. However, the shares have gained around 15% over the past week.

Wall Street View

Earlier this month, Wolfe Research analyst Rod Lache downgraded Lordstown shares to ‘Underperform’ and lowered his price target to $1. Lache thinks the company will have difficulty competing in the commercial electric vehicle pickup space, specifically matching Ford’s price levels for its recently revealed F-150 Lightning electric pickup truck.

Elsewhere, the stock receives 1 ‘Buy’ ratings, 2 ‘Hold’ ratings, and 2 ‘Sell’ ratings. Twelve-month price targets range between $1 and $40, with the median pegged at $12 – 39% above Monday’s extended-hours closing quote of $8.65.

Technical Outlook and Trading Tactics

Despite analysts’ downbeat outlook for Lordstown shares, price action tells another story. The price recently broke above a multi-month downtrend line on above-average volume, indicating bullish conviction behind the move. Moreover, the MACD indicator crossed back above its trigger line last week to generate a buy signal.

Therefore, active traders should view news-driven selling pressure as a buying opportunity, providing the stock holds above this month’s low at $6.69. Look to book profits on a retest of key overhead resistance near the green horizontal trendline at $17.

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

Lordstown Motors Slump Over 10% After Electric Truck Maker Slashed Production Outlook

Lordstown Motors shares slumped over 10% in extended trading on Monday after the Ohio-based company reported a deeper-than-expected loss in the first quarter and said it expected Endurance truck production would at best be 50% of previous expectations.

The U.S. electric vehicle automaker reported a quarterly adjusted loss of $0.72 per share, worse than the Wall Street consensus estimates for a loss of $0.28 per share. The company reported a first-quarter 2021 net loss of $125 million, capex of $53 million and cash of $587 million on March 31, 2021.

Lordstown Motors said it expected Endurance truck production in 2021 will be limited and would at best be 50% of our prior expectations. Expected capital expenditures of between $250 and $275 million and year-end 2021 liquidity of between $50 and 75 million in cash and cash equivalents after giving effect to certain cost reductions and delayed investments.

The company blamed COVID-19-related and industry-wide related issues that led to significantly higher-than-expected expenditures for parts/equipment, expedited shipping costs, and expenses associated with third-party engineering resources.

Following this, Lordstown Motors’ shares slumped over 10.5% to $8.85 in extended trading on Monday. The stock plunged over 50% so far this year.

Lordstown Motors Stock Price Forecast

Five analysts who offered stock ratings for Lordstown Motors in the last three months forecast the average price in 12 months of $15.20 with a high forecast of $40.00 and a low forecast of $1.00.

The average price target represents a 57.19% increase from the last price of $9.67. Of those five analysts, one rated “Buy”, two rated “Hold” and two rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $12 with a high of $35 under a bull scenario and $2 under the worst-case scenario. The firm gave an “Underweight” rating on the cloud-based software company’s stock.

Several other analysts have also updated their stock outlook. Goldman Sachs lowered the target price to $10 from $21. Wolfe Research raised to a peer perform rating from an underperform and lifted their price target to $27 from $14. R. F. Lafferty issued a buy rating and a $35.00 target price.

Analyst Comments

Lordstown is launching an EV pickup truck aimed at US commercial fleet customers. The segment is attractive and they benefit from a large plant that they acquired from GM. However, we see a high volume of competition from extremely well-capitalized startups, legacy OEMs and Tesla,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We also believe the use of hub-motor propulsion technology (licensed from 3rd party) which has never before been used in a series-production vehicle carries extraordinary execution risk.”

Check out FX Empire’s earnings calendar

Salesforce Q1 Earnings and Revenue to Rise Over 20%; Target Price $272

The San Francisco, California-based software company Salesforce is expected to report its first-quarter 2022 earnings of $0.88 per share, which represents year-over-year growth of over 25% from $0.70 per share seen in the same period a year ago.

The leading provider of enterprise cloud computing solutions would post revenue growth of about 21% to $5.9 billion. In the last four quarters, on average, the company has beaten earnings estimates over 18%.

The company was founded in 1999 on the concept of delivering CRM applications via the Internet reported record sales in 2020, with revenue up more than 23% to $21.3 billion, to hit $20 billion for the first time ever.

According to Zacks Research estimates, Salesforce will post fiscal 2022 revenue growth of 21% to $25.7 billion, with FY23 projected to climb 19% higher to come in at $30.5 billion. Meanwhile, its adjusted FY22 earnings are projected to fall 30% to $3.44 a share, with FY23 then set to bounce 18% above our current-year estimate.

Salesforce shares traded about 2% higher at $226.50 on Monday, ahead of its fiscal first-quarter 2022 earnings to be released on Thursday, May 27.

Analyst Comments

“Our survey points to a strong qtr w/ 83% of partners meeting/beating targets, the best quarterly performance we’ve seen since the pandemic. Checks indicate project investments are coming back online & the avg CY21 growth outlook increased to 32% vs. 21% last qtr,” noted J. Derrick Wood, equity analyst at Cowen.

“We think good margin upside is likely too. With weak sentiment, we see an attractive set-up into the print.”

Salesforce Stock Price Forecast

Twenty-two analysts who offered stock ratings for Salesforce in the last three months forecast the average price in 12 months of $272.19 with a high forecast of $315.00 and a low forecast of $230.00.

The average price target represents a 20.18% increase from the last price of $226.49. Of those 22 analysts, 18 rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $270 with a high of $381 under a bull scenario and $186 under the worst-case scenario. The firm gave an “Overweight” rating on the cloud-based software company’s stock.

“Well positioned for ramping digital transformation demand and more constructive margin commentary from management tilts the risk/reward significantly more favorably, particularly given the 25% relative under-performance in Salesforce (CRM) post the Slack announcement. Upgrading to Overweight with a $270 price target,” noted Keith Weiss, equity analyst at Morgan Stanley.

Several other analysts have also updated their stock outlook. The Goldman Sachs Group set a $315 price target. The firm currently has a buy rating on the CRM provider’s stock. Sanford C. Bernstein set a $233 price target and gave the stock a neutral rating. Jefferies cut the target price to $300 from $320. Mizuho slashed the price objective to $270 from $290.

Check out FX Empire’s earnings calendar

VMware 1Q22 Earnings to Rise Nearly 4%, Revenue to Jump 7%

The California-based tech giant VMware is expected to report its fiscal first-quarter of 2022 earnings of $1.58 per share, which represents year-over-year growth of about 4% from $1.52 per share seen in the same period a year ago.

The California-based cloud computing and software company would post revenue growth of nearly 7% to $2.9 billion. In the last four quarters, on average, the company has beaten earnings estimates over 18%.

On May 12, VMware’s board of directors announced Raghu Raghuram as its new CEO effective June 1, 2021.

“We are maintaining our $202 fair value estimate for narrow-moat VMware after the company announced that current COO Raghu Raghuram will become CEO and also released strong first-quarter preliminary results,” noted Mark Cash, senior equity analyst at Morningstar.

“Our expectation was for one of VMware’s two current COOs to become CEO, and we positively view the company tapping its leadership bench, given the moving pieces in the organization. VMware has various sizable franchises pivoting their offerings, is shifting toward subscriptions amid tight integration with cloud partners and is being spun off from Dell toward the end of 2021.”

VMware shares rose over 15% so far this year.

Analyst Comments

“With overhangs around the CEO transition and Dell ownership behind us, focus shifts to durability of growth. Our channel work speaks to improving, but not yet fully recovered fundamentals. While a positive indicator, investors likely await data on Cloud traction and margin durability,” noted Keith Weiss, equity analyst at Morgan Stanley.

“Investors are likely looking for revenue, margins, and EPS in-line with pre-announced numbers and through of the Q1 outperformance into an updated FY22 guidance. Within Q1 results, however, we also think the mix of license / Subscription & SaaS revenue will be important, as investors try to understand the pace of subscription transition and implications on topline and margins going forward.”

VMware Stock Price Forecast

Fifteen analysts who offered stock ratings for VMware in the last three months forecast the average price in 12 months of $170.08 with a high forecast of $180.00 and a low forecast of $150.00.

The average price target represents a 5.39% increase from the last price of $161.38. Of those 15 analysts, seven rated “Buy”, eight rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $156 with a high of $193 under a bull scenario and $94 under the worst-case scenario. The firm gave an “Equal-weight” rating on the technology company’s stock.

Several other analysts have also updated their stock outlook. VMware had its target price upped by Piper Sandler from $158 to $180. They currently have an overweight rating on the virtualization software provider’s stock. BMO Capital Markets lowered VMware from an outperform rating to a market perform rating and cut their price target for the stock to $148 from $157.

UBS Group cut their price target to $145 from $152 and set a neutral rating on the stock. Bank of America reaffirmed a neutral rating and set a $175 price target.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: AutoZone, Nvidia, Medtronic and Costco Wholesale in Focus

Earnings Calendar For The Week Of May 24

Monday (May 24)

Ticker Company EPS Forecast
NDSN Nordson $1.64

Tuesday (May 25)

IN THE SPOTLIGHT: AUTOZONE

The Memphis, Tennessee-based auto parts retailer is expected to report its fiscal third-quarter earnings of $20.02 per share, which represents year-over-year growth of about 39% from $14.39 per share seen in the same period a year ago.

The United States’ leading retailer and a leading distributor of automotive replacement parts and accessories would post revenue growth of 17% to $3.26 billion. In the last four quarters, on average, the company has beaten earnings estimates over 12%.

AutoZone (AZO) could comp ~30% in F’Q3 with a boost from the stimulus, and a flat comp is possible in F’Q4 on a tougher compare. However, these beats may not fully flow through to F’22. Risk/reward looks positive but less favorable after the stock’s recent run. Stay ‘Overweight’ with a $1,640 price target,” noted Simeon Gutman, equity analyst at Morgan Stanley.

AZO is our top pick in DIY Auto. We see it as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (~80% of sales). In addition, its DIFM growth was accelerating pre-COVID and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 25

Ticker Company EPS Forecast
SHB Shaftesbury £0.64
VSAT Viasat $0.22
CBRL Cracker Barrel Old Country Store $0.27
AZO AutoZone $20.02
HTHT Huazhu Group Limited -$1.61
DY Dycom Industries $0.06
URBN Urban Outfitters $0.17
HEI Heico $0.48
TOL Toll Brothers $0.79
A Agilent $0.83
INTU Intuit $6.52
JWN Nordstrom -$0.58
VNET 21Vianet -$0.43
BYG Big Yellow £22.76

Wednesday (May 26)

IN THE SPOTLIGHT: NVIDIA

The Santa Clara, California- based multinational technology company is expected to report its first-quarter earnings of $3.28 per share, which represents year-over-year growth of over 80% from $1.80 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 10%. The company, which designs graphics processing units for the gaming and professional markets, as well as system on a chip unit for the mobile computing and automotive market would post year-over-year revenue growth of over 70% to $5.4 billion.

“For the first quarter of fiscal 2022, NVIDIA anticipates revenues of $5.3 billion (+/-2%). Non-GAAP gross margin is projected at 66% (+/-50 bps). Non-GAAP operating expenses are estimated to be $1.20 billion. Capital expenditures are expected to be approximately $300-$325 million,” noted equity analysts at ZACKS Research.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 26

Ticker Company EPS Forecast
VAR Varian Medical Systems $1.10
NVDA Nvidia $3.28
BMO Bank Of Montreal USA $2.17
CPRI Capri Holdings Ltd $0.01
ANF Abercrombie & Fitch -$0.41
DKS Dick’s Sporting Goods $1.16
UHAL Amerco $5.07
WDAY Workday $0.73
SNOW Intrawest Resorts -$0.16
AEO American Eagle Outfitters $0.47
DXC DXC Technology Co $0.70
LI Li Auto -$0.14
WSM Williams Sonoma $1.72

Thursday (May 27)

IN THE SPOTLIGHT: MEDTRONIC, COSTCO WHOLESALE

MEDTRONIC: An American Irish-domiciled medical device company is expected to report its fiscal fourth-quarter earnings of $1.42 per share, which represents year-over-year growth of over 140% from $0.58 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 44%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 35% to $8.14 billion.

“Peer results and commentary suggest ~33-34% organic growth (the upper end of mgmt guidance) is achievable, and we expect FY22 guidance in-line with Cns with room for raises. We continue to see valuation as attractive and Risk/Reward positive into FY22 recovery,” noted Cecilia Furlong, equity analyst at Morgan Stanley.

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions. CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results, and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

COSTCO WHOLESALE: The world’s fifth-largest retailer is expected to report its fiscal third-quarter earnings of $2.31 per share, which represents year-over-year growth of over 20% from $1.89 per share seen in the same period a year ago.

The Fridley, Minnesota-based medical company would post revenue of $43.6 billion.

COST’s results have consistently been among the best in Retail. Over the past decade, COST has delivered ~6% comps and ~10% EBIT growth on average. It is rare to find a business with COST’s solid comp/membership growth, while relative e-commerce insulation differentiates its value proposition from other retailers,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We are Overweight even as the stock trades at an elevated valuation given COST’s scarcity value, safety, and scale. In the near-term, we expect incremental sales uplifts from COVID-19 disruption, and earnings power looks stronger despite COVID-19 expenses.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 27

Ticker Company EPS Forecast
EGFEY Eurobank Ergasias S.A. ADR $0.01
SAFM Sanderson Farms $2.44
DG Dollar General $2.13
ADSK Autodesk $0.94
CM Canadian Imperial Bank Of Commerce USA $2.49
DLTR Dollar Tree $1.39
TD Toronto-Dominion Bank $1.39
RY Royal Bank Of Canada $2.06
MDT Medtronic $1.42
BBY Best Buy $1.34
BURL Burlington Stores $0.80
ULTA Ulta Salon Cosmetics Fragrance $1.93
CRM Salesforce.com $0.88
VMW VMware $1.58
HPQ HP $0.88
BOX BOX $0.17
PLAN Progressive Planet -$0.09
VEEV Veeva Systems $0.78
GPS Gap -$0.06
COST Costco Wholesale $2.31
ASND Ascendant Resources -$1.83
YY YY -$0.06

Friday (May 28)

Ticker Company EPS Forecast
BIG Big Lots $1.67
For a look at all of today’s economic events, check out our economic calendar.

Deere Shares Gain on Q1 Earnings Beat, Guidance Hike

Deere & Company shares jumped about 2% in pre-market trading on Friday after the world’s largest maker of farm equipment reported better-than-expected earnings in the fiscal second quarter and lifted its full-year guidance.

Agricultural, construction and forestry equipment manufacturer reported net income of $1.790 billion for the second quarter ended May 2, 2021, or $5.68 per share, compared with net income of $666 million, or $2.11 per share, for the quarter ended May 3, 2020. That was also higher than the market expectations of $4.49 per share.

The Moline, Illinois-based company said its worldwide net sales and revenues increased 30% to $12.058 billion for the second quarter of 2021 and rose 25% to $21.170 billion for six months.

Deere forecasts net income for fiscal 2021 is forecast to be in a range of $5.3 billion to $5.7 billion. Full-year earnings forecast raised to a range of $5.3 to $5.7 billion.

Following this, Deere shares rose about 2% to $361.0 in pre-market trading on Friday. The stock rose over 30% so far this year.

Analyst Comments

Deere’s (DE) F2Q continued to see a steady increase into today’s report. Still, today’s results and FY21 guidance were significantly ahead of expectations, and we believe the company’s operating leverage, the updated FY21 forecast and strong pricing should support the shares,” noted Stephen Volkmann, equity analyst at Jefferies.

“The real standout for us is pricing, where DE is the only company we follow driving significant price in the current tight market conditions.”

Deere Stock Price Forecast

Fourteen analysts who offered stock ratings for Deere in the last three months forecast the average price in 12 months of $408.64 with a high forecast of $455.00 and a low forecast of $365.00.

The average price target represents a 15.04% increase from the last price of $355.22. Of those 14 analysts, 12 rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $410 with a high of $625 under a bull scenario and $181 under the worst-case scenario. The firm gave an “Overweight” rating on the farm equipment maker’s stock.

Deere & Company (DE) is one of the highest quality, most defensive names within the broader Machinery universe, given an historically lower cyclicality of Ag Equipment and history of strong management execution. FY21 should mark a tangible acceleration in the NA large ag replacement cycle, as commodity tailwinds are complemented by moderating trade headwinds and improving farmer sentiment,” noted Courtney Yakavonis, equity analyst at Morgan Stanley.

“With mgmt continuing to execute against its 15% mid-cycle operating margin target, we see continued momentum in DE’s margin improvement narrative – representing one of the most attractive idiosyncratic margin improvement narratives in the broader Machinery group.”

Several other analysts have also updated their stock outlook. Deere & Company had its price objective boosted by Robert W. Baird to $425 from $375. Robert W. Baird currently has an outperform rating on the industrial products company’s stock.

Stifel Nicolaus raised their price target to $365 from $325 and gave the stock a buy rating. Deutsche Bank raised their price target to $402 from $360 and gave the stock a hold rating.

Check out FX Empire’s earnings calendar

L Brands Tops Q1 Earnings and Revenue Estimates; Target Price $78

L Brands, a specialty retailer focused on women’s intimate and other apparel, reported better-than-expected earnings and revenue in the first quarter, largely driven by continued strength and exceptional performance at Bath & Body Works and Victoria’s Secret.

The Columbus, Ohio-based fashion retailer reported adjusted earnings per share of $1.25 on revenue of $3.02 billion in the quarter ended May 1, 2021, better compared to a loss per share of $0.99 in the same period a year ago. That also beat the Wall Street consensus estimates of $1.17 per share on $2.84 billion.

L Brands said its first-quarter operating income was $572.1 million, up from a loss of $317.7 million last year, and net income was $276.6 million compared to a loss of $296.9 million last year

The company which was listed as 248 on the 2020 Fortune 500 list of largest United States companies by revenue said it is forecasting second-quarter earnings per share in the range of $0.80 and $1.00, which excludes one-time costs related to the spin-off of Victoria’s Secret, compared to adjusted earnings per share of $0.25 in 2020 and $0.24 in 2019.

But that upbeat results did not help L Brands stock, which slumped about 4% to $64.68 on Thursday. The stock rose over 70% so far this year.

Analyst Comments

L Brands’ (LB) pre-announcement previewed 1Q’s above-expectations result. But the beat & above-consensus 2Q guidance were not enough to send shares higher today, even though the stock trades in-line with historical valuation levels & well below all-time highs. Raise price target to $84 & highlight ’21 EPS upside,” noted Kimberly C Greenberger, equity analyst at Morgan Stanley.

L Brands Stock Price Forecast

Seventeen analysts who offered stock ratings for L Brands in the last three months forecast the average price in 12 months of $78.65 with a high forecast of $102.00 and a low forecast of $65.00.

The average price target represents a 21.60% increase from the last price of $64.68. Of those 17 analysts, ten rated “Buy”, seven rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $84 with a high of $110 under a bull scenario and $40 under the worst-case scenario. The firm gave an “Overweight” rating on the specialty retailer’s stock.

“We continue to see a strong strategic rationale for the VS/BBW separation confirmed for Aug ’21. 2H20/1Q21 results & 2Q2 guidance confirm 1) VS has hit an inflection point in its long-debated turnaround, & 2) BBW is showing no signs of topline deceleration & could deliver higher profitability vs. history,” Morgan Stanley’s Greenberger added.

“This leaves us incrementally confident in VS’ turnaround & profitability trajectory (e.g., mid-teens OM) as well as BBW’s revenue growth sustainability & OM expansion opportunity (e.g., low-to-mid-20s+ %). BBW remains a stand-out across the retail space. 1Q21 results suggest higher future profitability (e.g., mid-20s %+). It would be a successful standalone public company.”

Several other analysts have also updated their stock outlook. CFRA raised the target price to $65. UBS upped the target price to $102 from $96. Deutsche Bank lifted the target price to $88 from $87. BMO increased the target price to $90 from $81. Credit Suisse raised the target price to $74 from $67.

Check out FX Empire’s earnings calendar

Kohl’s Tops Q1 Earnings Estimates, Raises 2021 Outlook

Kohl’s, the largest department store chain in the United States, reported better-than-expected earnings in the first quarter and lifted its full-year 2021 revenue and profit forecasts.

The U.S. department store retail chain said its net sales rose about 70% to $3.66 billion, beating the Wall Street consensus estimates of $3.48 billion. The company reported earning per share of $1.05, way above the market expectations of zero per share.

The company said its full-year 2021 net sales to increase in the mid-to-high teens percentage range compared to the previous expectation of mid-teens percentage rate increase Operating margin is now expected to be in the range of 5.7% to 6.1% compared to the previous expectation of 4.5% to 5.0%

Kohl’s adjusted earnings per share is now expected to be in the range of $3.80 to $4.20, excluding any non-recurring charges, compared to the previous expectation of $2.45 to $2.95

However, Kohl’s stock slumped over 11% to $53.29 on Thursday. The stock rose over 30% so far this year.

Analyst Comments

Kohl’s (KSS) 1Q21 $1.05 adj. EPS significantly beat MSe and Street expectations, but with the stock down -11%, good news was more than factored in. Management raised 2021 guidance by $1.30 at the mid-point, but after incorporating 1Q’s beat, consensus 2Q-4Q estimates are already there,” noted Kimberly C Greenberger, equity analyst at Morgan Stanley.

Kohl’s Stock Price Forecast

Eleven analysts who offered stock ratings for Kohl’s in the last three months forecast the average price in 12 months of $63.40 with a high forecast of $71.00 and a low forecast of $47.00.

The average price target represents a 19.94% increase from the last price of $52.86. Of those 11 analysts, seven rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $47 with a high of $72 under a bull scenario and $22 under the worst-case scenario. The firm gave an “Underweight” rating on the department store retail chain’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to $63 from $54. Evercore ISI lifted the target price to $64 from $58. JPMorgan upped the target price to $60 from $57. Wedbush raised the target price to $65 from $29. Jefferies lifted the target price to $71 from $66.

Check out FX Empire’s earnings calendar

Cisco Shares Slip After Earnings Guidance Disappoints

Shares in IT networking giant Cisco Systems, Inc. (CSCO) plunged over 5% in Wednesday’s extended-hours trading session after the company disappointed investors with its earnings guidance for the current quarter amid ongoing chip supply disruptions.

Management sees fiscal fourth quarter (Q4) earnings ranging between 81- and 83 cents, with revenue growth of 6% to 8%. Wall Street had expected EPS of 85 cents and 5.5% revenue growth. “We’re also seeing similar component shortage supply issues as our peers,” Cisco CEO Chuck Robbins said, per MarketWatch. “The good news, and this is reflected in our guidance, is that we are confident we will work through this as we have already put in place revised arrangements with several of our key suppliers,” he added.

Other key metrics came in ahead of forecasts. The company reported Q3 adjusted earnings of 83 cents per share versus a consensus of 82 cents a share. Meanwhile, revenues of $12.80 billion topped analysts’ expectations of $12.56 billion. On a year-over-year (YoY) basis, the top and bottom line grew 6.6% and 5%, respectively.

Through Wednesday’s close, Cisco stock has a market value of $221.52 billion, offers a 2.8% dividend yield, and trades 17.63% higher over the past twelve months. Year to date (YTD), the shares have added 17.25%, outperforming the tech-heavy Nasdaq index by 14% over the same period. Valuation-wise, the stock trades at 15.48 times forward earnings, slightly above its five-year average multiple of 14.44 times.

Wall Street View

After the company’s quarterly earnings, Deutsche Bank analyst Matthew Niknam initiated coverage of the stock with a Hold rating and $55 price target. Niknam says Cisco “screens attractively from several angles” but offers limited upside against consensus estimates. The analysts also noted the stock trades at a premium on a standalone and industry bias.

Coverage elsewhere on Wall Street remains mostly bullish. The stock receives 14 ‘Buy’ ratings, 3 ‘Overweight’ ratings, and 1 ‘Sell’ rating. Currently, no broker recommends selling the shares. Twelve-month price targets range from a Street-high $65 to a low of $45, with the median pegged at $55.

Technical Outlook and Trading Tactics

Cisco shares have trended steadily high since late October, with only one sizeable retracement to the 50-day simple moving average (SMA) in early March. More recently, however, a dark cloud cover pattern formed on the chart, indicating short-term weakness.

Traders and investors should view earnings-related selling pressure as a buying opportunity if the price holds the $48 level where it finds support from a multi-month horizontal trendline.

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