The holiday-shortened week got off to a quiet start when lightly covered but heavily traded Meten missed its revenue estimate by about 10% and posted an adjusted net loss that was 365% worse than the year-ago loss. In addition to getting into cryptocurrency mining, the company said it is exploring “opportunities related to Metaverse.”
After markets close Monday, Zoom Video will be reporting quarterly results. Our preview of Zoom is included with previews on Medtronic and Xpeng, two of five companies reporting results before Tuesday’s opening bell. The other firms reporting results Tuesday morning are retailers Best Buy, Dick’s and Dollar Tree.
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Here are previews of three firms reporting results after markets close on Tuesday and one reporting results before the opening bell on Wednesday.
Deere
Heavy equipment maker Deere & Co. (NYSE: DE) has seen a share price gain of around 35% over the past 12 months. A month-long strike was settled last week (the company’s first in 35 years) when the United Auto Workers agreed to a six-year deal that raises pay and boosted benefits.
One thing to keep an eye on going forward is how the company fares under the Biden administration’s right-to-repair order signed in July. As recently as last month at a meeting in Montana, lobbyists and state legislators met to support equipment makers like Deere that are seeking to grow their services businesses by denying farmers the right to make repairs to their own equipment. A recent decision by Apple to allow some owner repairs to certain iPhone models addressed the same issue. Deere reports results before markets open Wednesday.
Analysts remain bullish on the stock, with 13 of 23 giving the shares a rating of Buy or Strong Buy and eight more rating the stock at Hold. At the recent price of around $346.40, the upside potential based on a median price target of $408.75 is 18%. At the high price target of $480, the upside potential is about 38.5%.
For the company’s fiscal fourth quarter that ended in October, analysts expect Deere to report revenue of $10.57 billion, which would be up 1.5% sequentially and up 22% year over year. Adjusted earnings per share (EPS) are expected to come in at $3.87, down 27% sequentially but nearly 62% higher year over year. For fiscal 2021, EPS are forecast is $18.75, up more than 115%, on sales of $39.96 billion, up about 28%.
Deere’s share price to earnings multiple for fiscal 2021 is 18.6. For fiscal 2022, the multiple to estimated EPS of $21.71 is 16.1, and for 2023, it is 14.5 times estimated EPS of $24.04. The stock’s 52-week range is $250.54 to $400.34. Deere pays an annual dividend of $4.20 (yield of 1.21%). Total shareholder return for the past year is 36.7%.
Dell
Over the past 12 months, shares of Dell Technologies Inc. (NYSE: DELL) have added about 59% to their share price. The company reports results after markets close Tuesday.
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Global PC shipments rose a meager 1% in the third calendar quarter, according to Gartner, but Dell shipments rose by 26.5%. The company’s market share edged jumped by 3.6 percentage points to 18.1%, moving it closer to number-two-ranked HP’s 20.1% share. Gartner attributed Dell’s October-quarter growth to its “limited focus in the consumer market.” The company shipped more than 15 million computers in the quarter, the first time it’s ever broken through that level.
Sentiment among analysts is bullish, with 13 of 19 brokerages giving the stock a Buy or Strong Buy rating and another five rating it at Hold. At a share price of around $55.10, the upside potential based on a median price target of $65, is 18%. At the high price target of $76, the upside potential is 38%.
The consensus revenue estimate for Dell’s third quarter of fiscal 2022 is $27.34 billion, up 4.6% sequentially and 16.2% year over year. Adjusted EPS are forecast at $2.30, up 2.8% sequentially and 13.3% year over year. For the full year ending in January, analysts are looking for EPS of $8.05, up less than 1%, on sales of $103.61 billion, up 9.8%.
Dell’s share price to earnings multiple for fiscal 2022 is 6.8. For fiscal 2023, the multiple to estimated EPS of $6.92 is 7.9, and for 2024, it is 7.5 times estimated EPS of $7.29. The stock’s 52-week range is $34.09 to $58.29. Dell does not pay a dividend. Total shareholder return for the past year is 59.1%.
24/7 Wall St.HP
Personal computer and printer maker HP Inc. (NYSE: HPQ) has added more than 60% to its share price over the past 12 months. Supply chain and logistical issues have tossed a wrench into the demand generated by the pandemic for more computers for working from home. As the economy opens up, that demand may soften even more. HP is trying to build a services business around the PCs it shipped through the first half of this year. The company reports quarterly results after markets close on Tuesday.
Analysts have been cautious on the stock. Of 18 brokerages covering it, eight have rated the stock a Hold, while six have a Buy rating on the shares and four rate it at Strong Sell. At a share price of around $32.10, the stock trades virtually at its median price target of $32.00 At the high price target of $50, the upside potential is more than 55%.
Fourth-quarter fiscal 2021 revenue is forecast to come in at $15.42 billion, up less than 1% sequentially and up 1% year over year. Adjusted EPS are forecast at $0.88, down nearly 12% sequentially but nearly 42% higher year over year. For the full fiscal year, analysts are looking for EPS of $3.73, up 63.7%, on sales of $62.23 billion, up nearly 10%.
HP’s share price to earnings multiple for fiscal 2021 is 8.6. For fiscal 2022, the multiple to estimated EPS of $4.08 is 7.9, and for 2023, it is 7.6 times estimated EPS of $4.76. The stock’s 52-week range is $20.58 to $36.00. HP pays an annual dividend of $1.00 (yield of 3.18%). Total shareholder return for the past year is 61.4%.
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Nordstrom
Department store operator Nordstrom Inc. (NYSE: JWN) reports third-quarter results after markets close on Tuesday. Shares have added about 56% over the past 12 months, but that’s only about half the peak gain over that same period.
There’s probably no reason to expect Nordstrom to perform worse than its peers have. From Macy’s to Dillard’s, all have beaten expectations. Nordstrom, however, is the smallest (measured by market cap) and the success of its e-commerce business is likely critical to continuing growth. To that end, last week the company signed a deal with Fanatics to sell that company’s licensed sports gear at a Nordstrom-operated website for which Fanatics will fulfill and ship orders.
Analysts are treating Nordstrom with caution. Of 22 brokerages covering the stock, 12 rate the shares a Hold, while six have Sell or Strong Sell ratings and just four have a Buy or Strong Buy rating. At a share price of around $33.10, the upside potential based on a median price target of $34.50 is 4.2%. At the high price target of $48, the upside potential is 45%.
Third-quarter revenue is forecast at $3.54 billion, down about 3% sequentially and up almost 15% year over year. Adjusted EPS are forecast at $0.56, up 14.7% sequentially and 155% higher year over year. For fiscal 2022, which ends in January, analysts expect Nordstrom to report EPS of $1.51, compared to a loss of $3.17 a year ago, on sales of $14.59 billion, up 36.2% year over year.
Nordstrom’s share price to earnings multiple for fiscal 2022 is 21.8. For fiscal 2023, the multiple to estimated EPS of $2.29 is 14.4, and for 2024, it is 13.3 times estimated EPS of $2.47. The stock’s 52-week range is $22.00 to $46.45. Nordstrom does not pay a dividend. Total shareholder return for the past year is 54.7%.
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