The three major U.S. equity indexes closed lower Tuesday. The Dow Jones industrials dropped 1.23%, the S&P 500 slipped by 0.67%, and the Nasdaq dipped by 0.16%. All 11 sectors ended the day lower, led down the slope by real estate (1.3%), financials and industrials (both down 1.1%).

An unknown attacker on Tuesday drained more than 8,000 Solana wallets of at least $5 million in a variety of cryptocoins. According to a report at CoinDesk, the attacker obtained the ability to sign transactions on behalf of users, “suggesting a trusted third-party service may have been compromised in a so-called supply chain attack.” Early Wednesday, all three equity indexes traded higher.
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After markets closed on Tuesday, Airbnb beat analysts’ consensus estimate for earnings per share (EPS) but missed the revenue estimate slightly. Shares traded down by about 4.1% Wednesday morning.

AMD beat estimates on both the top and bottom lines, but a warning on a declining PC market has given investors the jitters. Shares traded down about 2.8% in the morning.

Occidental Petroleum beat top-line and bottom-line estimates. The company also paid down $5 billion in debt, has repurchased $1.1 billion in stock so far this year, and the company has said it will focus on returning capital to shareholders. Investors do not seem too impressed. Shares traded down 1.8% Wednesday morning.

Livent also topped estimates but shares were down about 5% in early trading.

PayPal beat both estimates and issued inline EPS guidance for the current quarter and raised full-year guidance. The $2 billion investment from Elliott Management has resulted in an information sharing agreement with the private equity giant, and investors have rewarded the stock by pushing it up 12.6% Wednesday morning.

Starbucks beat estimates on both the top and bottom lines. The stock traded up about 1.7%.

Before markets opened on Wednesday, Under Armour met the EPS estimate and beat on revenues, and it lowered EPS guidance for the fiscal year while guiding revenue up by 5% to 7% year over year. Shares traded up by about 5%.

After markets close Wednesday afternoon, APA, Energy Transfer, Lucid and Robinhood are on deck to report quarterly results. Thursday morning brings reports from Alibaba, ConocoPhillips, Nikola and Paramount Global.

Here are previews of five earnings reports due out after U.S. markets close on Thursday.

AES Corp. (NYSE: AES) is a diversified power generation and utility company with operations in the United States and around the world. In June, the company formed a consortium with a number of solar companies with the intention of expanding the U.S. solar supply chain and growing the country’s solar industry. The consortium is committed to purchasing some 7 gigawatts of solar modules annually beginning in 2024. The company’s share price has declined by about 5.7% over the past 12 months.
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Of 14 analysts covering the company, 12 have a Buy or Strong Buy rating. The other two have Hold ratings. At a recent price of around $22.20 a share, the upside potential based on a median price target of $27.00 is about 21.6%. At the high price target of $30.00, the upside potential is 35.1%.

For the second quarter, analysts are expecting revenue of $2.47 billion, which would be down 13.5% sequentially and 8.6% lower year over year. Adjusted EPS are expected to come in at $0.31, up 49.4% sequentially and flat year over year. For the full fiscal year, AES is expected to report EPS of $1.61, up 6.0%, on sales of $10.99 billion, down 1.4%.

The stock trades at 13.8 times expected 2022 EPS, 12.7 times estimated 2023 earnings of $1.75 and 11.6 times estimated 2024 earnings of $1.92 per share. The stock’s 52-week trading range is $18.62 to $26.52. AES pays an annual dividend of $0.93. The total shareholder return for the past year was negative 3%.

AMC

Shares of AMC Entertainment Holdings Inc. (NYSE: AMC) have dropped by more than 52% over the past 12 months. Even so, the stock soared so high in June of last year that it remains up nearly 740% since the beginning of 2021. Investors have been wary of the stock since Walmart’s profit warning a few weeks ago. Consumers are unlikely to spend more on going to movies if they arre not willing to spend on necessities. The stock added nearly 10% in Tuesday trading, probably anticipating CEO Adam Aron’s promise to crush AMC short sellers after announcing second-quarter earnings.

AMC is not an analyst’s favorite. Just eight brokerages cover the stock, and none has a Buy or Strong Buy rating. Only three have rated the shares at Hold. At a share price of around $16.90, the stock trades more than three times higher than its median price target of $4.50 and about 50% above the high price target of $11.10.
Second-quarter revenue is forecast at $1.18 billion, up 50.7% sequentially and 151.0% higher year over year. Analysts expect AMC to report a loss per share in the quarter of $0.23, much better than the prior quarter’s loss of $0.65 per share and better than last year’s quarterly loss of $0.71 per share. For the full 2022 fiscal year, AMC currently is expected to post a loss per share of $1.16, compared with last year’s loss of $2.50 per share. Revenue is forecast to rise by 72.3% to $4.36 billion.
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AMC is not expected to post a profit in 2022, 2023 or 2024. The stock trades at a sales-to-enterprise value multiple of 4.2 times its forecast 2022 sales, 3.6 times 2023 estimated sales and 3.5 times the 2024 estimated sales. The stock’s 52-week range is $9.70 to $52.79, and AMC does not pay a dividend. Total shareholder return over the past year was about negative 52.1%.

Block

Over the past 12 months, Block Inc. (NYSE: SQ) has seen its share price fall by about 71%, with all the decline coming since early November. The fintech company got a boost Wednesday morning following PayPal’s earnings report. Investors are going to be most interested in what Block has to say about its outlook for the second half of this year. Inflation and recession worries will affect consumer spending, and that is where Block makes its money.

Analysts remain mostly bullish on the shares, with 35 of 47 brokerages having a rating of Buy or Strong Buy. Another 10 rate the stock at Hold. At a share price of around $79.10, the upside potential based on a median price target of $111.00 is 40%. At the high price of $210.00, the upside potential is 89.2%.

Second-quarter revenue is forecast at $4.33 billion, up 9.5% sequentially but down 7.5% year over year. Adjusted EPS are expected to come in at $0.16, down 10.9% sequentially and by 75.8% year over year. For full fiscal 2022, estimates call for EPS of $0.83, down 51.3%, on sales of $17.61 billion, down 0.3%.

Square stock trades at 95.1 times expected 2022 EPS, 49.3 times estimated 2023 earnings of $1.60 and 32.7 times estimated 2024 earnings of $2.42 per share. The stock’s 52-week range is $56.01 to $289.23. Square does not pay a dividend. The total shareholder return for the past year was negative 71%.

Virgin Galactic

For the past 12 months, shares of Virgin Galactic Holdings Inc. (NYSE: SPCE) have tumbled by 75.4%. The stock’s 52-week high was posted on August 9 of last year, and the stock was on a steady downhill run until about mid-May. Since then, the share price has increased by about 34%.

The company has been dogged by a decision last year to delay further space tourism flights until late this year. Shares jumped 6% on Tuesday following the announcement that the company had acquired the land it needed to build an astronaut campus and training facility next to its New Mexico headquarters.
Analysts are mixed on Virgin Galactic stock. Of 11 brokerages covering the shares, just two have a Buy rating, while six more have a Hold rating and the other 3 have a Sell or Strong Sell ratings. At a share price of around $7.80, the stock is almost fully valued, based on a median price target of $8.00. At the high target of $16.00, the upside potential is around 105%.
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Virgin Galactic is expected to report revenue of $80,000 for the second quarter, down about 75.7% sequentially and by 86.0% year over year. Analysts also expect a loss per share of $0.36, flat sequentially and worse than the year-ago loss of $0.19 per share. For the full year, the company is expected to post a loss per share of $1.50, compared to last year’s loss of $1.43 per share, on sales of $1.8 million, down 45.3% year over year.

The company is not expected to post a profit in 2022, 2023 or 2024. Virgin Galactic’s enterprise value-to-sales multiple for 2023 is 34.2 based on sales of $38.11 million. For 2024, the multiple is 13.7, based on estimated sales of $94.82 million. The stock’s 52-week range is $5.14 to $35.62. Virgin Galactic does not pay a dividend, and the total shareholder return for the past 12 months was negative 75.4%.

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Warner Bros. Discovery

Media company Warner Bros. Discovery Inc. (NASDAQ: WBD) sprung to life just over three months ago following the merger of Discovery with AT&T’s WarnerMedia. Since then, the share price has tumbled by 45%. The stock has bounced back a bit from its post-merger low set in late June, rising by about 21.5%.

Layoffs are expected after the company reports results Thursday afternoon, as high production costs and anticipated lower consumer spending on entertainment cut into revenue and profits. The company reportedly killed its nearly finished “Batgirl” project and has no plans to release the film either to theaters or to HBO Max. That’s $70 million in production costs down the drain, according to the New York Post.

Of 24 analysts covering the stock, there are nine Hold ratings and 14 ratings of Buy or Strong Buy. At a share price of around $16.00, the implied gain based on a median price target of $26.00 is 62.5%. At the high price target of $52.00, the implied gain is about 225.0%.

Second-quarter revenue is forecast at $11.9 billion. Because this is the new company’s first quarter, comparable data is not available. Adjusted EPS are forecast at $0.12. The estimates for the full year call for EPS of $0.75, down 10%, on sales of $48.11 billion.

Warner Bros. Discovery stock trades at 21.4 times expected 2022 EPS, 7.1 times estimated 2023 earnings of $2.25 and 6.0 times estimated 2024 earnings of $2.69 per share. The stock’s post-merger range is $12.91 to $27.50. The company does not pay a dividend, and the total shareholder return for the past year is negative 45%.

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