U.S. markets continue to track events in Europe and Ukraine, with traders pushing energy higher and everything else lower. Energy stocks continue to trade higher, as crude oil prices continue rising (up about 5% on last look).
Among equities, Salesforce traded up more than 3% following a beat on both the top and bottom lines and mixed guidance. SoFi traded up more than 15%, and Nordstrom soared by 30%, following earnings reports released Tuesday evening. AMC traded higher after hours Tuesday, but the shares were indicated to open lower Wednesday morning.
Abercrombie & Fitch traded down sharply after missing on both the top and bottom lines and issuing only in-line guidance before markets opened on Wednesday. Dollar Tree beat profit estimates but missed on revenue and issued mixed guidance for the quarter and its 2023 fiscal year.
We already have previewed three companies due to report results after markets close Wednesday (Coupang, Snowflake and Splunk) and four scheduled to report first thing Thursday morning (Best Buy, Bilibili, Canadian Natural Resources and Kroger).
Here is a look at four companies scheduled to report quarterly results after markets close on Thursday.
Broadcom
Like most other chipmakers not named Intel, Broadcom Inc. (NASDAQ: AVGO) posted its most recent high in late December. Its stock has added about 25% to its share price over the past 12 months, including a 16% decline since the December high. Last month, Broadcom and Apple won a new trial after a federal appeals court judge tossed out a jury verdict that would have cost the companies $1.1 billion for allegedly infringing Wi-Fi patents held by CalTech. The continuing buildout of 5G connectivity is probably Broadcom’s major strength in fiscal 2022.
Analysts remain strongly bullish on the stock, with 26 of 33 rating the shares at Buy or Strong Buy. The other seven have Hold ratings. At a recent price of around $507.10 per share, the potential upside based on a median price target of $695 is 37%. Based on a high price target of $775, the upside potential is 52.8%.
For Broadcom’s first quarter of fiscal 2022, which ended in January, analysts are looking for revenue of $7.61 billion. That would be up 2.7% sequentially and 14.3% higher year over year. Adjusted earnings per share (EPS) are forecast at $8.13, up 4.1% sequentially and up 23% year over year. For the full fiscal year, current estimates call for EPS of $33.16, up 18.4%, on sales of $30.70 billion, up 11.8%.
Broadcom trades at 17.2 times expected 2022 EPS, 15.7 times estimated 2023 earnings of $35.24 and 14.8 times estimated 2024 earnings of $38.65 per share. The stock’s 52-week range is $419.14 to $677.76. Broadcom pays an annual dividend of $14.90 (yield of 2.88%). Total shareholder return for the past year was 22.2%.
Costco
Shares of Costco Wholesale Corp. (NASDAQ: COST) have added about 59% over the past 12 months, including a drop of about 16% in January. February was a different story, with the stock adding back about 9.5%. Costco has beat revenue estimates in each of the past eight quarters but has missed profit estimates twice in that time, including the most recent quarter. E-commerce sales have continued to grow and have provided a nice complement to the company’s traditional warehouse sales.
Analysts are positive on the stock, with 24 of 35 giving it a Buy or Strong Buy rating. Another 10 rate the stock at Hold. At a share price of around $523.00, the upside based on a median price target of $567.50 is 8.5%. At the high price target of $650, the upside potential is 24.3%.
Second-quarter revenue is forecast at $51.40 billion, up about 2.1% sequentially and 14.8% year over year. Adjusted EPS are forecast at $2.72, up 6.3% sequentially and 21.3% year over year. For full fiscal 2022 ending in August, current estimates call for EPS of $12.79, up 15.5%, on sales of $219.25 billion, up 11.9%.
Costco stock trades at 41.0 times expected 2022 EPS, 37.4 times estimated 2023 earnings of $14.01 and 33.2 times estimated 2024 earnings of $15.78 per share. The stock’s 52-week range is $307.00 to $571.49. Broadcom pays an annual dividend of $3.07 (yield of 0.6%). Total shareholder return for the past year was about 60.5%.
Gap
Apparel retailer Gap Inc. (NYSE: GPS) has seen its share price tumble by more than 40% over the past 12 months. Since reaching a peak in mid-May last year, the stock has plunged by around 60%. Last month, the company was booted from the S&P 500 index because its market cap has fallen below the minimum typically needed for inclusion. The company’s attempts to rebrand itself as a lifestyle brand have enjoyed some short-term buzz but no long-term success in retaining customers.
Analysts are stuck in wait-and-see mode, with 18 of 23 putting a Hold rating on the Gap shares and three others rating the stock a Buy. At a share price of around $14.20, the implied upside based on a median price target of $20.00 is nearly 41%. At the high target of $26.50, the implied gain is almost 87%.
Fourth-quarter revenue is forecast to come in at $4.50 billion, up about 14% sequentially and just 1.8% higher year over year. Analysts are forecasting an adjusted loss per share of $0.14, far below per-share earnings of $0.27 in the prior quarter. For the full 2022 fiscal year that ended in January, analysts expect EPS of $1.33, up from a loss per share of $0.56 last year, on sales of $16.65 billion, up 20.6%.
Gap stock trades at 10.7 times expected 2022 EPS, 8.1 times estimated 2023 earnings of $1.76 and 7.0 times estimated 2024 earnings of $2.02 per share. The stock’s 52-week range is $13.12 to $37.63, and Gap pays an annual dividend of $0.24 (yield of 3.36%). Total shareholder return for the past year was negative 43%.
Marvell Technology
Chipmaker Marvell Technology Inc. (NASDAQ: MRVL) has seen its shares appreciate by about 35% over the past 12 months. Shares peaked in early December and have retreated 27% since then. In early January, analysts at Needham named the stock as its top pick in semiconductors, based on the company’s expected long-term growth path. Organic revenue could grow by more than 30% this year and by around 20% next year, according to the analyst.
Analysts are solidly bullish on Marvell stock. Of 31 brokerages covering the shares, 27 have a Buy or Strong Buy rating, and four more rate the stock at Hold. At a share price of around $65.60, the upside potential to a median price target of $100.00 is 52.4%. At the high price target of $120.00, the upside potential is nearly 89%.
For the fourth quarter of fiscal 2022, which ended in January, Marvell’s revenue is forecast to come in at $1.32 billion, up 9.3% sequentially and up more than 65% year over year. Adjusted EPS are forecast at $0.48, up 12.3% sequentially and 65.5% year over year. For the full fiscal year, EPS are forecast at $1.57, up 71%, on sales of $4.44 billion, up nearly 50%.
Marvell stock trades at 41.7 times expected 2022 EPS, 29.2 times estimated 2023 earnings of $2.25 and 22.9 times estimated 2024 earnings of $2.86 per share. The stock’s 52-week range is $37.92 to $93.85, and Marvell pays an annual dividend of $0.24 (yield of 0.37%). Total shareholder return for the past year was 37.6%.
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