The Memorial Day holiday will effectively shut down the trickle of earnings reports beginning Friday and extending through Monday. Next week includes reports from more retailers and some tech firms, among others.
Here’s a look at the results of reports from Abercrombie, Li Auto, Nordstrom and Zscaler, all posted after markets closed Tuesday or before they opened Wednesday. After markets close Wednesday and before they open Thursday, we expect reports from Best Buy, Medtronic, Nvidia and Pure Storage.
This preview looks at five companies reporting quarterly results Thursday afternoon.
Box
Box Inc. (NYSE: BOX) posted a share price gain of around 7.5% last year, but the shares have taken off in 2021, adding around 27% as of Tuesday’s close. Shares traded up about 30% last week before the company announced a strategic investment of $500 million from private equity firm KKR that Box plans to use to repurchase shares.
Starboard Value, another private equity giant and owner of around 8% of Box, had on May 10 nominated its own slate of candidates for election to Box’s board. In connection with the KKR investment, Box’s board gave KKR voting rights amounting to around 10% of outstanding shares. As this dispute plays out, shareholder value is not being enhanced.
Disregarding the current kerfuffle, analysts remain solidly bullish on Box stock, with 10 of 12 rating the stock a Buy or Strong Buy. At a recent price of almost $23 a share, the upside potential based on a consensus price target of $26.80 is 16.5%. At the high target of $28, the implied gain is nearly 22%.
For the company’s first fiscal quarter of 2022, analysts expect earnings per share (EPS) of $0.17 on revenue of $200.48 million. Forecasts call for fiscal year EPS of $0.80 and revenue of $844.71 million.
At the current price, shares trade at a multiple of around 28.6 times expected 2022 earnings and 22.7 times estimated 2023 earnings. The stock’s 52-week trading range is $15.07 to $26.47, and the average daily trading volume is around 3.6 million shares. Box does not pay a dividend.
Costco
Membership warehouse retailer Costco Wholesale Corp. (NASDAQ: COST) posted a share price gain of nearly 33% last year, well below the gain of almost 46% registered in 2019 but well above the 9.3% increase in 2018. For the year to date, Costco stock has added a modest 2.9%. Analysts and pundits are going to be looking at Costco as a bellwether for how big retailers transition to a post-COVID-19 world. Walmart and Target already have posted solid beats, and expectations are high for Costco too.
Of 29 brokerages covering the company, 18 have placed Buy or Strong Buy ratings on the stock, while the other 11 rate the shares at Hold. At a share price of around $386, upside potential based on a consensus price target of $395.26 is about 2.4%. At the high target of $445, upside potential is more than 15%.
Analysts expect Costco to post EPS of $2.34 for its fiscal third quarter on sales of $43.64 billion. For fiscal 2021, analysts are looking for EPS of $10.10 on sales of $189.04 billion.
Costco stock trades at about 38.4 times expected 2021 EPS, 34.8 times estimated 2022 earnings and 31.4 times estimated 2023 earnings. The stock’s 52-week range is $293.84 to $393.15, and the average daily trading volume is around 2.7 million shares. Costco pays an annual dividend of $3.16 (yield of 9.82%).
Dell
Tech products maker Dell Technologies Inc. (NYSE: DELL) posted a share price gain of 42.6% in 2020 and has added another 36% so far in 2021, defying declining interest in some of the sector’s biggest names. Apple, for instance, is trading down 4% so far in 2021, and Microsoft trades up 13.5%. An expected pickup in corporate PC demand, increased demand for Dell’s enterprise products and the pending spinoff of the company’s majority stake in VMware are all positives going forward too.
Analysts are moderately bullish on Dell’s stock, as 12 of 20 rate the shares a Buy or Strong Buy. At a share price near $100, the implied gain on the consensus price target of $106.51 is 6.5%. At the high target of $134, the implied upside rises to 13.4%.
Consensus estimates call for EPS of $1.61 for the first quarter of fiscal 2022 on sales of $23.4 billion. For the fiscal year, the consensus forecast sees EPS of $7.95 on sales of $98.02 billion.
Dell’s stock trades at a multiple of 12.5 times expected 2022 EPS and 11.9 times estimated 2023 earnings. The stock’s 52-week range is $43.68 to $103.80. The average daily trading volume is about 2.5 million. Dell does not pay a dividend.
Gap
Apparel retailer Gap Inc. (NYSE: GPS) posted a share price gain of 15.7% last year and shares have soared another 71.6% as of midday Wednesday. The stock is up 5% on Wednesday alone, likely due to a price target boost Tuesday from $27 to $35 from Telsey Advisory. Analyst Dana Telsey wrote, “reducing the Gap and [Banana Republic] store footprints in [North America], paring back mall exposure, investing in digital expansion, and growing the Athleta and [Old Navy] businesses can all contribute to improved profitability.”
Most brokerages are content to wait and see what Gap reports for its first quarter. Of 27 analysts, 19 rate the shares at Hold. The share price of around $34.40 has outrun the consensus price target of $32.11 but implies a potential gain of around 16.3% to the high target of $40.
Analysts are expecting a loss per share of $0.05 for the quarter on revenue of $3.44 billion. For the fiscal year, the consensus forecast calls for EPS of $1.38 on sales of $16.25 billion.
Gap shares trade at a multiple of 125.2 times expected 2022 EPS and 17.7 times estimated 2023 earnings. The 52-week trading range is $8.81 to $37.63, and the average daily trading volume is about 6.6 million. Gap pays an annual dividend of $0.36 (yield of 1.11%).
Salesforce
Enterprise software giant Salesforce.com Inc. (NYSE: CRM) had seen its share price rise by more than 70% in 2020 at the beginning of September. By the time the year ended, that gain had been cut in half and so far this year, the shares trade up by less than 3%. December’s announced $27.7 billion acquisition of Slack weighed on Salesforce’s share price, and it has never fully recovered from the hit. The shares have been rising over the past few weeks, and a solid beat on Thursday afternoon could give the stock a nice boost.
Nearly all brokerages covering the Dow Jones industrial average component (41 of 45) rate the stock a Buy or Strong Buy. With shares near $228.80 apiece, the implied upside to a consensus price target of $274.38 is nearly 20%. At the high target of $336, upside potential is nearly 47%.
For the company’s first quarter of fiscal 2022, the consensus estimates call for EPS of $0.88 on sales of $5.89 billion. For the fiscal year, analysts are looking for EPS of $3.43 on revenue of $25.76 billion.
The stock trades at a multiple of 66.5 times expected 2022 EPS and 55.0 times estimated 2023 earnings. The stock’s 52-week range is $167.00 to $284.50, and the average daily trading volume is around 6.3 million. Salesforce.com does not pay a dividend.
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