The three major U.S. equity indexes closed higher Tuesday. The Dow Jones industrials ended the day up 0.17%, the S&P 500 closed 0.87% higher and the Nasdaq saw a gain of 1.45%. Nine of 11 sectors closed higher, with communications services up 1.78% and three others (consumer cyclicals, technology and real estate) adding 1.24%. Materials (−0.11%) and health care (−0.07%) lagged.

The monthly report on retail sales came in much hotter than expected, posting its largest gain since February. Overall sales rose 1.3% month over month and increased 0.9% excluding automobiles and gasoline. Thursday and Friday bring data related to new home construction and existing home sales in October. The weekly report on jobless claims is also due Thursday.

The three major indexes traded lower in Wednesday’s premarket session due in part to the chilling effect of the report on retail sales.

Before U.S. markets opened on Wednesday, Target missed consensus estimates for both earnings per share (EPS) and revenue. The company also lowered its fiscal 2022 outlook for both same-store sales and operating margin.

Lowe’s reported profit and revenue above consensus estimates. Third-quarter same-store sales were up 2.2% year over year and 3.0% in the United States. Lowe’s raised fiscal 2023 guidance above analysts’ consensus. Shares traded up about 2.5% in Wednesday’s premarket.

TJX Companies reported mixed results, beating the EPS estimate but missing on revenue. EPS guidance was lowered from a prior range of $3.07 to $3.11 to a new range of $2.93 to $2.97. Shares traded essentially flat in the premarket session.

Zim Integrated Shipping beat consensus estimates on both the top and bottom lines. Shares traded up more than 5% early Wednesday.

Cisco Systems and Nvidia will post results after markets close Wednesday, and before they open again on Thursday, look for Alibaba, Kohl’s, Macy’s and NetEase to report earnings.

Here is a look at four companies on deck to report results after Thursday’s closing bell.

Applied Materials

Shares of semiconductor equipment maker Applied Materials Inc. (NASDAQ: AMAT) have declined by nearly 30% in the past 12 months. From their 52-week high of mid-January, the shares are down by about a third, including a rise of almost 48% since posting a 52-week low in the middle of last month.
Applied’s recent share price jump came despite a reduction in its outlook for its fiscal fourth quarter to reflect the impact on earnings and revenue of new export restrictions on advanced technology. The company lowered expected EPS from a prior range of $1.82 to $2.18 to a new range of $1.54 to $1.78, but that appears to have had little impact on investors’ choice to buy the stock.

Of 30 analysts covering the stock, 22 have Buy or Strong Buy ratings and the other eight have Hold ratings. At a recent price of around $110.50 a share, the stock has outrun its median price target of $107.50. At the high target of $150.00, the upside potential is 35.7%.

For the company’s fourth quarter of fiscal 2022, analysts are expecting revenue of $6.44 billion, which would be down 1.3% sequentially but up 5.2% year over year. Adjusted EPS are forecast at $1.75, down 9.8% sequentially and by 10.0% year over year. For the full fiscal year that ended in October, analysts are currently forecasting EPS of $7.44, up 8.7%, on sales of $25.5 billion, up 10.6%.

The stock trades at 14.9 times expected 2022 EPS, 16.7 times estimated 2023 earnings of $6.61 and 16.1 times estimated 2024 earnings of $6.86 per share. The stock’s 52-week trading range is $71.12 to $167.06. Applied Materials pays an annual dividend of $1.04 (yield of 0.97%). Total shareholder return over the past year was negative 29.4%.

Gap

Apparel retailer Gap Inc. (NYSE: GPS) has seen its share price drop by more than 18% over the past 12 months. Since the beginning of the current quarter, however, shares have jumped more than 56%. About half the gain came after the company announced the sale of its stores in China and a $0.15 per share dividend for the fourth quarter ending in January.

The company announced Tuesday that it has opened a store on Amazon Fashion in hopes of reaching more customers. The company also may be hoping that an Amazon store will help with its persistent inventory issues.

Analysts remain cautious on the stock, with 14 of 21 having a Hold rating and just two others rating the shares at Buy. At a price of around $12.80 a share, the stock has outrun its median price target of $9.95. At the high target of $25.00, the implied gain is 95.3%.

Third-quarter fiscal 2023 revenue is forecast to come in at $3.83 billion, down 0.7% sequentially and 2.8% lower year over year. Analysts are forecasting a break-even quarter, compared to EPS of $0.09 in the prior quarter and EPS of $0.27 in the year-ago quarter. For the full 2023 fiscal year ending in January, analysts expect a loss per share of $0.27, down from EPS of $1.44 in the prior year, on sales of $15.67 billion, down 6%.

Gap stock trades at 17.8 times estimated 2024 EPS of $0.72 and 4.8 times estimated 2025 earnings of $0.90 per share. The stock’s 52-week range is $7.79 to $25.42. Gap pays an annual dividend of $0.60 (yield of 4.86%), and the total shareholder return for the past year was negative 46%.

Palo Alto Networks

Palo Alto Networks Inc. (NYSE: PANW) supplies cybersecurity platforms, including both hardware and software, along with subscription security and other professional services. Over the past 12 months, the share price has decreased by about 7.2%. The stock has been on a roller-coaster ride since May of 2021 and has bounced nearly 15% higher in the eight trading sessions.
The company has beaten analysts’ sales estimates in all but four quarters since its initial public offering in late 2012 and has beaten adjusted EPS estimates in every quarter but one over the same period. Annual sales rose nearly 30% last year and are tapped to rise by 25% this year. The company completed a 3-for-1 stock split in mid-September.

Analysts remain strongly bullish on the stock, with 38 of 43 brokerages having a Buy or Strong Buy rating. At a share price of around $162.40, the stock’s upside potential based on a median price target of $217.00 is 33.6%. At the high price target of $274.00, the upside potential is 68.7%.

For its first quarter of fiscal 2023, Palo Alto Networks is expected to report revenue of $1.55 billion, flat sequentially and up 24% year over year. Adjusted EPS are forecast at $0.69, down 13.5% sequentially but 25.5% higher year over year. For the full fiscal year ending in July, analysts are looking for EPS of $3.17, up 25.9%, and revenue of $6.85 billion, up 24.6%.

Palo Alto Networks stock trades at 51.2 times expected 2023 EPS, 42.8 times estimated 2024 earnings of $3.79 and 36.2 times estimated 2025 earnings of $4.49 per share. The stock’s split-adjusted 52-week range is $140.07 to $213.36, and Palo Alto Networks does not pay a dividend. Total shareholder return for the past 12 months was negative 7.2%.

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Ross Stores

Off-price apparel retailer Ross Stores Inc. (NASDAQ: ROST) has suffered a share price decline of more than 14% over the past 12 months. Shares got a bounce this month, however, rising by more than 14% from a 52-week low posted just seven trading days ago.

Since the pandemic trough in the first quarter of 2020, revenue and EPS have beaten the consensus estimate in seven of 10 quarters. Ross is one of the retailers bucking the trend away from brick-and-mortar stores, having opened 99 new stores so far this year, 40 of those in the past two months alone. Other off-price stores, like Nordstrom Rack and Dollar General, are also opening more physical locations.

Analysts are mostly bullish on the stock, with 13 of 22 having ratings of Buy or Strong Buy and the rest rating the shares at Hold. At a price of around $97.80 a share, the upside potential based on a median price target of $99.05 is 1.3%. At the high price target of $119.00, the upside potential is 21.7%.

For the third quarter of fiscal 2023, analysts expect Ross to report revenue of $4.37 billion, down 4.7% sequentially and by about 4.4% year over year. Adjusted EPS are forecast at $0.81, down 27.1% sequentially and 25.7% lower year over year. For the full fiscal year ending in January, analysts are forecasting EPS of $4.02, down 17.5%, on sales of $18.22 billion, down 3.7%.

Ross stock trades at 24.3 times expected 2023 EPS, 20.6 times estimated 2024 earnings of $4.76 and 17.7 times estimated 2025 earnings of $5.54 per share. The 52-week range is $69.24 to $123.36. The company pays an annual dividend of $1.24 (yield of 1.27%). Total shareholder return for the past year was negative 13.8%.

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