More than 500 companies are scheduled to report quarterly earnings this week, with about half due on Wednesday and Thursday. A couple of major players in lithium production are on deck this week along with a number of independent oil and gas producers.
About halfway through this version of earnings season, growth stocks have seen a couple of pretty consistent analyst moves. First, guidance trumps results. In particular, lowered guidance outweighs results that beat expectations.
Second, analysts are lowering price targets on growth stocks while maintaining their ratings. Not too surprising given the hammering that these stocks have taken so far this year.
Among companies reporting after markets close on Wednesday, we have previewed four: Albemarle, Applied Materials, Cisco Systems and Pioneer Natural Resources.
Here is a look at two firms scheduled to report results before markets open on Thursday.
Palantir Technologies
Over the past 12 months, shares of Palantir Technologies Inc. (NYSE: PLTR) have declined by more than 55%. Nearly all of that has come since late September. The stock put up a 52-week low in late January and the 52-week high was posted exactly one year ago.
In each of the past four quarters, the company has beaten both earnings and revenue estimates. So what’s up? The sales and profit numbers are not rising. In fact, they are narrowing, and on a GAAP basis, earnings per share are negative. The meme stock revolt last year provided a spike that the stock simply has been unable to sustain, and big investors are looking elsewhere for growth.
Just 10 analysts cover the stock. Of those, four have rated the shares at Hold and only two have a Buy rating. At a recent price of around $14.20 a share, the upside potential based on a median price target of $21 is 47.9%. At the high price target of $31, the potential upside is about 118%.
The consensus fourth-quarter revenue estimate is $418.07 million, which would be up 6.6% sequentially and almost 30% higher year over year. Adjusted earnings per share (EPS) are forecast at $0.04, flat sequentially and down by 33% year over year. For the full 2021 fiscal year, estimates call for EPS of $0.15, down 21.2%, on sales of $1.53 billion, up nearly 40%.
The stock trades at 96.5 times expected 2021 EPS, 69.4 times estimated 2022 earnings of $0.20 and 50.2 times estimated 2023 earnings of $0.28 per share. Palantir stock’s 52-week range is $11.75 to $30.44, and the company does not pay a dividend. Total shareholder return for the past year is negative 49.1%.
Walmart
Dow Jones industrial average component Walmart Inc. (NYSE: WMT) has seen its share price drop by about 5.5% over the past 12 months. The company is expected to overcome supply chain issues, higher costs and inflation pressures, at least by enough to post a sequential rise in revenue. Year over year, revenue is expected to be lower, however.
Walmart has filed trademark applications for its own cryptocurrency and NFTS. Walmart in the Metaverse. Sounds like a good title for a hit Broadway musical.
Analysts are mostly bullish on the stock, with 28 of 39 awarding the shares a Buy or Strong Buy rating and the rest with a Hold rating. At a share price of around $134.40, the upside potential at the median price target of $170 is about 26.5%. At the high target of $190, the implied upside is 41.4%.
For its fourth quarter of fiscal 2022 that ended in January, Walmart is expected to report sales of $150.24 billion, up 7.9% sequentially but down less than 1.0% year over year. Adjusted EPS are pegged at $1.50, up 3.3% sequentially and 7.9% higher year over year. For the full fiscal year, analysts forecast EPS of $6.43, up 17.3%, on sales of $568.07 billion, up 2.3%.
Walmart stock trades at 20.9 times expected 2022 EPS, 20.0 times estimated 2023 earnings of $6.71 and 18.5 times estimated 2024 earnings of $7.25 per share. The stock’s 52-week range is $126.28 to $152.57. Walmart pays an annual dividend of $2.20 (yield of 1.64%). Total shareholder return for the past year was negative 6.3%.
On Thurs., Feb. 17, we will hold a live conference call with the Investment Community at 7 a.m. CT to discuss the company’s fourth quarter earnings results for fiscal year 2022. More information is available here: https://t.co/nvEJzk0Etl $WMT
— Walmart Inc. (@WalmartInc) February 10, 2022
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