The three major U.S. equity indexes closed higher on Monday. The Dow Jones industrials added 0.45%, while the S&P 500 rose by 0.4%, and the Nasdaq climbed 0.62%. Eight of 11 sectors ended the day higher, led by defensive favorites consumer staples (1.0%) and utilities (0.8%). Energy stocks fell by 1.9% following news that China is easing its lending rates. Crude oil dropped below $90 a barrel and continued sliding in early trading Tuesday. All three major indexes traded lower in Tuesday’s premarket.

Before U.S. markets opened on Tuesday, Walmart beat analysts’ expectations on both the top and bottom lines. The company also raised fiscal year guidance. Shares traded up by about 3.7%.

Home Depot beat consensus estimates for earnings per share (EPS) and revenue, and it reaffirmed previous guidance. Transaction numbers were down 3% but average ticket size was up 9.1%. The shares traded down about 2.5%.

Sea Limited missed the consensus revenue estimate while posting a smaller-than-expected loss. The company said it would stop providing fiscal year 2022 GAAP revenue guidance. Investors were not amused, and the stock traded down about 6.6% Tuesday.

Genius Sports beat analysts’ consensus revenue estimate and posted a smaller-than-expected quarterly loss. Shares traded up 5.7% in Tuesday’s premarket.

Check out our preview of Lowe’s, Target and TJX, all scheduled to report results first thing Wednesday morning.

Here, we preview expectations for three companies set to report quarterly results after Wednesday’s close.

Bath & Body Works

It has been a year now since the company formerly known as L Brands spun off its Victoria’s Secret business and renamed itself Bath & Body Works Inc. (NYSE: BBWI). Over that period, its stock slumped to a 52-week low last month and closed on Monday nearly 35% lower for the year. The company cut its second-quarter and full-year guidance in mid-July, citing inflationary pressures both on its customers and on its own operations.

Of 22 analysts covering the firm, 18 have a Buy or Strong Buy rating, and the other seven rate the stock at Hold. At a recent trading price of around $39.20 a share, the upside potential based on a median price target of $44.00 is 12.2%. Using the high price target of $82.00, the upside potential is 109.2%.

Second-quarter revenue is forecast at $1.61 billion, which would be up 11.3% sequentially but down almost 50% year over year. Analysts expect adjusted EPS of $0.41, down about 36% sequentially and 69.4% lower year over year. For the full fiscal year ending in January, analysts estimate EPS of $2.90, down 35.7%, and revenue of $7.37 billion, down 6.4%.

Bath & Body Works stock trades at 10.6 times expected 2023 earnings, 9.0 times estimated 2024 earnings of $4.33 and 7.3 times estimated 2025 earnings of $5.36 per share. The stock’s 52-week trading range is $25.75 to $82.00, and the company pays an annual dividend of $0.80 (yield of 2%). Total shareholder return for the past year was negative 34.7%.

Networking giant Cisco Systems Inc. (NASDAQ: CSCO) has posted a share price decline of about 15.1% over the past 12 months, including a drop of more than 25% since late December. For 2022 to date, Cisco’s share price decline is nearly double the decline in the tech sector as a whole and approaches three times the drop in the S&P 500.

Last week the company confirmed that it was the victim of a cyberattack in May that resulted in the leak of company files on the dark web. On the bright side, the company successfully defended itself against a patent infringement lawsuit in Boston that could have cost the company $371 million.

Analysts are marginally bullish on the stock, with 14 of 29 having a rating of Buy or Strong Buy and 14 more with Hold ratings. At a share price of around $46.60, the upside potential based on a median price target of $52.00 is 11.6%. At the high price target of $73.00, the upside potential is 56.7%.

For Cisco’s fourth quarter of fiscal 2022, analysts expect revenue of $12.78 billion, a decrease of 0.5% sequentially and a drop of 2.7% year over year. Adjusted EPS are forecast at $0.82, down 5.6% sequentially and by 2.4% year over year. For the full fiscal year that ended in July, analysts currently estimate EPS of $3.36, up 4.2%, on revenue of $51.21 billion, up about 2.8%.

Cisco’s stock trades at 13.9 times expected 2022 EPS, 13.1 times estimated 2023 earnings of $3.54 and 12.3 times estimated 2024 earnings of $3.79 per share. The stock’s 52-week range is $40.82 to $64.28. Cisco pays an annual dividend of $1.52 (yield of 3.26%). Total shareholder return over the past year was negative 15.1%.

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SQM

Sociedad Química y Minera de Chile S.A. (NYSE: SQM) is a specialty chemicals company that produces a variety of raw materials including lithium. SQM, as it is commonly known, has more than doubled its share price over the past 12 months and is trading very near its 52-week high set in late May. For the year to date, the stock is up nearly 360%. While demand for lithium remains strong, SQM’s problem will be keeping up with that demand. Last year, the company produced about 19% of global lithium output.

Of 16 brokerages covering the stock, 10 have a Buy or Strong Buy rating and four have a Hold rating. At a share price of around $111.40, the stock has outrun its median price target of $110.00. Based on the high price target of $136.00, the upside potential is 22%.

First-quarter revenue is forecast at $2.34 billion, up almost 16% sequentially and by 300% year over year. Adjusted EPS are forecast at $3.15, up 5.7% sequentially and more than 900% higher year over year. For full fiscal 2022, analysts expect SQM to report EPS of $11.42, up nearly 500%, on sales of $9.3 billion, up almost 225%.

SQM stock trades at 9.8 times expected 2022 EPS, 10.8 times estimated 2023 earnings of $10.30 and 10.3 times estimated 2024 earnings of $10.84 per share. The stock’s 52-week range is $46.13 to $115.76. The company pays an annual dividend of $11.15 (yield of 10%). Total shareholder return over the past year was 113.8%.

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