The three major U.S. equity indexes closed mixed on Tuesday. The Dow Jones industrials added 0.71%, while the S&P 500 rose by 0.19%, and the Nasdaq slipped by 0.23%. Seven of 11 sectors ended the day higher, led by consumer staples and consumer cyclicals (both up 1.1%). Solid earnings reports from Walmart and Home Depot paved the way for consumer-oriented stocks. Then, too, Bed Bath & Beyond has soared nearly 350% (up 20% Tuesday) over the past two weeks as retail investors do their best to squeeze short sellers. All three major indexes traded lower in Wednesday’s premarket session.

Before U.S. markets opened on Wednesday, Target missed both consensus profit and revenue estimates, even though the estimates were lowered after the company warned investors of trouble in mid-May. The stock traded down about 4% Wednesday morning.

Lowe’s beat the consensus estimate for earnings per share (EPS) but missed the revenue forecast by 2.4%. The company expects fiscal year revenue and same-store sales to come in at the low end of its outlook range, while operating income and EPS finish near the top. Shares traded up about 3.5% in Wednesday’s premarket.

TJX beat the consensus EPS estimate but missed on revenue. The company also issued downside EPS guidance for the current quarter. Full fiscal year same-store sales guidance was lowered from previous guidance of down 1% to 2% to a new range of down 2% to 3%. The shares were trading about 1.6% lower.

We have previewed these three companies set to report results after U.S. markets close Wednesday: Bath & Body Works, Cisco Systems and SQM. Before markets open on Thursday, Canaan, Kohl’s, NetEase and Tapestry are on deck to post quarterly results.

Here is a look at what to expect from four companies set to share their quarterly results after markets close on Thursday or before they open on Friday.

Applied Materials

Shares of semiconductor equipment maker Applied Materials Inc. (NASDAQ: AMAT) have declined by about 17.6% in the past 12 months. From their 52-week high of mid-January, the shares are down about 35%. The good news is that since posting a 52-week low in early July, the stock has added 26%.

The outlook for semiconductors is not particularly rosy these days, and that dim outlook works its way down to semiconductor equipment makers like Applied Materials. What the company has to say about the industry outlook for the next 12 to 18 months probably will be more influential than what its second-quarter performance was. The company reports results after markets close Thursday.

Of 30 analysts covering the stock, 21 have Buy or Strong Buy ratings and the other nine rate the shares at Hold. At a recent price of around $108.50 a share, the upside potential based on a median price target of $126.10 is 16.2%. At the high target of $197.00, the upside potential is 81.6%.
For the company’s third quarter of fiscal 2022, analysts are expecting revenue of $6.27 billion, which would be up 0.4% sequentially and by 1.1% year over year. Adjusted EPS are forecast at $1.79, down 3.5% sequentially and 5.8% lower year over year. For the full fiscal year ending in October, analysts are forecasting EPS of $7.49, up 9.5%, on sales of $25.34 billion, up 9.9%.

Applied Materials’ stock trades at 14.5 times expected 2022 EPS, 13.1 times estimated 2023 earnings of $8.28 and 12.7 times estimated 2024 earnings of $8.56 per share. The stock’s 52-week range is $82.67 to $167.06. Applied Materials pays an annual dividend of $1.04 (yield of 0.95%). Total shareholder return over the past year was negative 17%.

Deere

Heavy equipment maker Deere & Co. (NYSE: DE) has posted a share price dip of 3.4% over the past 12 months. From an all-time high in mid-April, the shares dropped by a third in early July. Since then, shares have regained 28%. The company reports results first thing Friday morning.

Earlier this week, an Australian hacker gave a presentation at DefCon showing how he took control of a Deere tractor by jailbreaking the software. Deere requires owners of its expensive farm equipment to have all repair or service work done by the company’s staff or risk voiding the warranty, a costly irritant to farmers who believe they should be able to fix things themselves. The hack illustrates that subversion is possible.

Analysts remain bullish on the stock, with 16 of 25 having a rating of Buy or Strong Buy and nine more rating shares at Hold. At a share price of around $370.00, the upside potential based on a median price target of $393.00 is about 6.2%. At the high price target of $466.00, the upside potential is about 26%.

For the company’s third quarter of fiscal 2022, analysts expect Deere to report revenue of $12.84 billion, up 6.7% sequentially and 23.3% higher year over year. Adjusted EPS are expected to come in at $6.68, up 9.5% sequentially and by 25.6% year over year. For the full fiscal year ending in October, EPS are forecast at $23.20, up 22.2%, on sales of $47.2 billion, up about 18.8%.

Deere stock trades at 15.9 times expected 2022 EPS, 14.5 times estimated 2023 earnings of $25.53 and 13.8 times estimated 2024 earnings of $26.83 per share. The stock’s 52-week range is $283.81 to $446.76. The company pays an annual dividend of $4.52 (yield of 1.22%). Total shareholder return over the past year was negative 2.2%.

Foot Locker

Shares of Foot Locker Inc. (NYSE: FL) have trailed downward for the past 12 months, losing about 42% over the past 12 months. The stock has trailed lower since mid-November and fallen by 72% in mid-July to post a 52-week low. Specialty retailers like Foot Locker are performing worse than the S&P 500 by more than seven percentage points, down 16.1% for the year to date, versus down 9.7% for the index.
The company announced a couple of acquisitions earlier this month that may have helped boost the share price. It is hard to say because the increase coincided with the recent encouraging news on inflation. Foot Locker reports results before Friday’s opening bell.

Of 20 analysts covering the company, 13 have moved to the sidelines with a Hold rating. Only two have a Buy or Strong Buy rating. At a share price of around $32.40, the stock trades above its median price target of $31.00. At the high price target of $43.00, the upside potential is 32.7%.

Fiscal 2023 second-quarter revenue is forecast at $2.07 billion, down 4.8% sequentially and by 8.8% year over year. Adjusted EPS are forecast at $0.82, down 48.5% sequentially and by 62.9% year over year. For the full fiscal year ending next January, Foot Locker is expected to report EPS of $4.43, down almost 43%, on revenue of $8.48 billion, down 5.4%.

The stock trades at 7.3 times expected 2023 EPS, 7.8 times estimated 2024 earnings of $4.13 and 7.2 times estimated 2025 earnings of $4.49 per share. Foot Locker’s 52-week range is $23.85 to $61.50. The company pays an annual dividend of $1.60 (yield of 5.1%). Total shareholder return for the past year was negative 39.3%.

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Ross Stores

Off-price apparel retailer Ross Stores Inc. (NASDAQ: ROST) has seen its share price trail down for the entire past 12 months. Its 52-week high was posted 363 days ago, and the 52-week low was put on the board in early July. Since then, the stock has added almost 30%, narrowing its 12-month decline to 24.8% compared to down 43% at its trough.

Discount stores typically do well during periods of inflationary pressure and rising prices, and Walmart’s quarterly report Tuesday morning gave most retailers a bump. Ross reports quarterly results after markets close on Thursday.

Analysts are bullish, with 13 of 23 rating shares at Buy or Strong Buy and the rest having Hold ratings. At a share price of around $92.60, the stock has outrun its median price target of $91.50. At the high price target of $125.00, the upside potential is just short of 35%.

For the second quarter of fiscal 2023, analysts expect Ross to report revenue of $4.62 billion, up 6.6% sequentially but down about 3.8% year over year. Adjusted EPS are forecast at $1.01, up 3.8% sequentially and 27.3% lower year over year. For the full fiscal year ending in January, analysts are forecasting EPS of $4.30, down 11.8%, on sales of $18.68 billion, down 1.3%.

The stock trades at 21.6 times expected 2023 EPS, 18.3 times estimated 2024 earnings of $5.06 and 15.5 times estimated 2025 earnings of $5.96 per share. The 52-week range is $69.24 to $126.86. The company pays an annual dividend of $1.24 (yield of 1.34%). Total shareholder return for the past year was negative 24.9%.

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