Earnings Previews: Paychex, Carnival

By Paul Ausick Published Apr 5, 2:22PM EDT

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Earnings Previews: Paychex, Carnival — © Marina113 / Getty Images

While earnings season for the quarter just ended doesn’t get underway in earnest until next week, there are still a few earnings coming in for the most recent quarter.

Here are three, including one before markets open Tuesday, one coming Tuesday after markets close, and one before Wednesday’s opening bell.

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Paychex

Payroll and benefits outsourcing provider Paychex Inc. (NASDAQ: PAYX | PAYX Price Prediction) is scheduled to report third fiscal quarter results before markets open Tuesday. The company’s stock dived more than 40% in late March last year but managed to climb back to post a gain of more than 13% for 2020. In 2021, the stock has added another 13.6%. And after a tough year, solid guidance could give investors a solid reason to get behind the stock.

Most analysts have the stock rated as a Hold, with just two rating the stock a Buy and 2 rating the stock a Sell. The consensus price target is $96.14, more than $4.50 below the stock’s current trading price of nearly $101.00. The high target of $110 implies a potential upside of around 9% to today’s price.

Analysts are looking for earnings per share (EPS) of $0.92 on revenue of $1.11 billion for the quarter. That’s down about 5.2% compared with last year’s EPS and 2.9% compared with last year’s revenue. In each of the past two quarters, Paychex has beaten the consensus EPS estimate by a double-digit percentage.

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Shares currently trade at around 34x expected 2021 earnings, 32x estimated 2022 EPS, and 29x estimated 2023 earnings. The stock traded up about 2% at $100.76 at last look in a 52-week range of $60.00 to $101.15. The high was posted earlier today.

Carnival

Carnival Corporation and plc (NYSE: CCL) postponed its quarterly report from March 11 until Wednesday morning. The cruise line operator had a miserable 2020 due to the COVID-19 pandemic. Shares dropped about 57% in the year but have managed to tack on more than 30% so far in 2021 on hopes that vaccines and pent-up demand for cruises will get the company back on the right track.

As if to light a fire under the company, nine brokerage firms have a Strong Buy rating on the stock, and another six rate the stock as a Buy. Another nine recommend holding the stock and just one rates the shares at Underperform. Investors not wanting to be late to the party have pushed the shares to more than $28.00, above the consensus price target of $23.87. But it may not be too late for those who believe in the high target of $42.00 which implies a gain of around 42% to the current trading price.

Analysts are looking for a fiscal 2021 fourth-quarter loss per share of $1.54 on revenue of $197.34 million, a decline of nearly 96% in revenue. For the fiscal year, estimates call for a net loss of $4.34 per share and revenue of $4.94 billion.

Shares traded at $28.13 Monday afternoon in a 52-week range of $9.14 to $30.12. At that price, the stock traded at around 150x expected 2022 earnings and 17x expected 2023 earnings. Nearly 42 million shares of Carnival’s stock are traded every day.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.