The three major U.S. equity indexes closed higher Friday. The Dow Jones industrials ended the day up 1.19%, the S&P 500 rose by 1.53% and the Nasdaq added 2.11%. All 11 sectors ended the day with gains, ranging from 2.8% (communications services) to 0.4% (utilities). The energy and tech sectors also posted big gains of 2.5% and 2.0%, respectively.
This week’s economic calendar includes the consumer price index (CPI), out Tuesday morning, and the producer price index (PPI) out Wednesday. Consensus forecasts call for each to decline by about 0.1% in August. The Census Bureau’s retail sales report for August is due Thursday, as is the weekly report on new claims for jobless benefits. All three major indexes traded higher ahead of Monday’s opening bell.
After markets close on Monday, Oracle and Planet Labs will report quarterly results. The coming week has a light schedule of earnings reports, and that will be the case for the next few weeks.
Here is a look at what to expect from two companies reporting results first thing Wednesday morning.
Li-Cycle
Lithium-ion battery recycler Li-Cycle Holdings Corp. (NYSE: LICY) came public through a SPAC merger in mid-August of 2021. Since posting a high above $15 in mid-November, the shares have dropped by about 50%. Commodities trading giant Glencore agreed in May to invest $200 million in the company. Glencore will supply Li-Cycle with spent lithium-ion batteries and other scrap materials in exchange for receiving a supply of recycled lithium, cobalt and nickel.
Of eight brokerages covering the stock, six have a Buy or Strong Buy rating and the others rate the shares at Hold. At a recent price of around $7.00 a share, the upside potential based on a median price target of $10.50 is 35.7%. Based on a high price target of $18, the upside potential on the stock is 150%.
Fiscal third-quarter revenue is forecast at $10.62 million, which would be up 22.8% sequentially and up from $1.71 million in the year-ago quarter. Analysts are looking for an adjusted per-share loss of $0.13, less than the prior quarter’s loss of $0.14 per share and far below last year’s third-quarter loss of $2.76 per share. For the full 2022 fiscal year ending in October, the adjusted loss per share is forecast at $0.43, worse than last year’s loss of $0.28 per share, on sales of $37.93 million, up more than 400%.
Shares trade at 49.2 times estimated 2024 EPS of $0.14. Li-Cycle is not expected to post a profit in 2023. The stock’s post-IPO trading range is $5.87 to $14.28. Li-Cycle does not pay a dividend, and the total shareholder return for the past year is negative 12.8%. At the end of the previous quarter, the total return was negative 33.4%.
Tsakos Energy Navigation
Tsakos Energy Navigation Ltd. (NYSE: TNP) operates a fleet of crude oil and refined product tankers, shuttle tankers and liquefied natural gas (LNG) carriers. The shares have added about 123% to their value over the past 12 months, with essentially all that gain coming since mid-March.
The Athens, Greece-based shipper is among the six largest oil carriers in the world, though its market cap of around $500 million is well below its competitors like Euronav, Frontline or Scorpio. The company’s LNG fleet currently includes three carriers, and four more dual liquid petroleum-LNG carriers are scheduled for delivery in 2023 and 2024. The global fleet of LNG carriers totals around 1,300, and demand for those ships will remain strong if Russian pipeline gas is eventually removed from Europe’s energy supplier list.
Only two analysts cover the stock, with one having a Buy rating and the other a Hold rating. At a share price of around $17.80, the upside potential to a median price target of $19.00 is 6.3%. At the high price target of $25.00, the upside potential is 40.4%.
Second-quarter revenue is forecast at $180.24 million, up 20.4% sequentially and 69.1% higher year over year. Analysts expect earnings per share (EPS) of $1.53 per share, compared to a loss of $0.12 per share in the prior quarter and a per-share loss of $0.74 in the year-ago quarter. For the full 2022 fiscal year, Tsakos is expected to report EPS of $5.49, up from a loss per share of $4.83 in 2021, on revenue of $752.57 million, up 116.3%.
The stock trades at 3.2 times expected 2022 EPS, 2.4 times estimated 2023 earnings of $7.44 per share and 1.9 times estimated 2024 earnings of $9.19 per share. Tsakos stock has a 52-week range of $6.95 to $18.14. The company pays an annual dividend of $0.20 (yield of 1.36%). Total shareholder return for the past year was 125%.
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