In early trading on Friday, the Dow Jones industrials were 0.12% lower, the S&P 500 down 0.38% and the Nasdaq down 0.67%. Meta Platforms’ impressive report Wednesday evening was not good enough to prevent Apple, Amazon and Alphabet from dragging tech stocks back down after poor earnings reports late Thursday. Plus ça change…
After U.S. markets closed on Thursday, Amazon missed the consensus earnings per share (EPS) estimate on revenue that was $3.5 billion higher than expected. The company is attempting to get back in its groove by cutting costs (read: firing people). Shares traded down 5% less than an hour after Friday’s opening bell.
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Alphabet missed both top-line and bottom-line estimates. Like Meta and Amazon, Alphabet is looking to become more efficient (i.e., firing people). It is worth noting that the company believes it is in the driver’s seat when it comes to artificial intelligence. It better hope so. Shares traded down 1.8% on Friday morning.
Apple, like Alphabet, missed on both the top and bottom lines. The company expects iPhone sales to pick up in the current quarter. In the prior quarter, iPhone sales were down by $3 billion. Foreign exchange rates shaved eight points from revenue. Still, if Apple can sort out its supply issues, a one-quarter dip may be a buying opportunity. The stock traded up 3% in the morning.
Qualcomm beat the consensus EPS estimate but missed on revenue and traded up about 1.5% early Friday.
Ford missed the consensus EPS estimate but posted better-than-expected revenue. After telling investors that the company left $2 billion on the table last year, CFO John Lawler said Ford needs to “improve quality and lower costs.” To that end, Ford will be “very aggressive” in firing people. The stock traded down almost 8%.
Starbucks missed top-line and bottom-line estimates, largely due to plummeting sales in China, where government lockdowns kept people out of the company’s stores. Now that the lockdowns have ended, sales are picking up again but were still below year-ago levels for January. Shares traded down 3%.
U.S. Steel reported solid beats on both profit and revenue. The company posted the second-best annual financial performance in its 122-year history, trailing only 2021. Shares traded up 5.8% early Friday.
ON Semiconductor and Tyson Foods are due to report quarterly results first thing Monday morning.
Here are previews of three firms set to report results after markets close on Monday.
NOV
Oilfield services company NOV Inc. (NYSE: NOV) dumped its old name (National Oilwell Varco) two years ago, following the lead of TransCanada, which changed its name to the innocuous TC in 2019. Whether or not the name change had anything to do with it, NOV’s stock is up nearly 85% over the past two years. Is it time to declare victory and take profits or would it be a better bet to hold on or perhaps even accumulate more shares?
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Analysts remain bullish on the stock. Of 25 brokerages covering it, 16 have a Buy or Strong Buy rating and eight more rate shares at Hold. At a recent price of around $23.00 a share, the implied upside based on a median price target of $26.00 is about 13%. At the high target of $32.00, the upside potential is 39.1%.
Fourth-quarter revenue is forecast at $1.96 billion, which would be up 3.5% sequentially and by nearly 30% year over year. Adjusted EPS are forecast at $0.24, up 53.5% sequentially and up sharply from a year-ago loss per share of $0.08. For the full 2022 fiscal year, analysts expect NOV to post EPS of $0.57, up from last year’s loss of $0.50 per share, on sales of $7.12 billion, up 28.9%.
NOV shares trade at about 40.2 times expected 2022 EPS, 20.3 times estimated 2023 earnings of $1.13 and 14.4 times estimated 2024 earnings of $1.59 per share. The stock’s 52-week trading range is $13.98 to $24.83. NOV pays an annual dividend of $0.20 (yield of 0.82%). Over the past 12 months, total shareholder return was 33%.
24/7 Wall St.Since its IPO just weeks before the COVID-19 pandemic, Pinterest Inc. (NYSE: PINS) stock soared to an all-time high of nearly $90. Since then, the shares have dropped by two-thirds. From a recent low of about $16 in May, the stock is up 64%. The company laid off an unspecified number of workers in December and announced earlier this week that another 150 would reportedly lose their jobs. A competitor for the Gen Z crowd, Landing, is expected to launch its mobile app early this year. Pinterest reported double-digit sequential growth in its Gen Z users at the end of its prior quarter.
Analysts are slightly bullish on the company. Of 33 brokerages covering the stock, 12 have a Buy or Strong Buy rating, while 19 have Hold ratings. At around $28.60 apiece, the shares trade slightly above their median price target of $28.00. At the high target of $43.00, the upside potential is 50.3%.
Fourth-quarter revenue is forecast at $886.78 million, up 29.5% sequentially and 4.7% higher year over year. Adjusted EPS are forecast at $0.28, up 153% sequentially but down 42.9% year over year. For the full 2022 fiscal year, analysts expect Pinterest to post EPS of $0.60, down 47.3%, on sales of $2.81 billion, up 9.1%.
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Pinterest shares trade at 47.9 times expected 2022 EPS, 38.2 times estimated 2023 earnings of $0.75 and 25.8 times estimated 2024 earnings of $1.10 per share. The stock’s 52-week range is $16.14 to $29.17. The company does not pay a dividend. Over the past 12 months, total shareholder return was 15.9%.
Simon Property Group
Simon Property Group Inc. (NYSE: SPG) is a real estate investment trust (REIT) that owns more than 200 U.S. shopping malls, mills and other retail properties and some 32 retail properties globally. The company is the largest mall and shopping center management company in the United States. Its 52-week high will be one year old next week and is in no real danger of being exceeded or even met before then. Over the past 12 months, the stock is down 11%. Since the beginning of the year, shares are up more than 10%. Maybe a bargain; then again, maybe not. Regardless, the dividend is more than attractive.
Brokerage firms are optimistic about Simon’s prospects, with 10 of 19 having Buy or Strong Buy ratings and the other nine rating the stock at Hold. At a share price of around $129.00, the implied gain based on a median price target of $130.00 is less than 1%. At the high price target of $160.00, the implied gain is about 24%.
24/7 Wall St.Estimates for the fourth quarter call for revenue of $1.29 billion, down 2.1% sequentially and by 3.0% year over year. Adjusted EPS are forecast at $1.77, up 23.6% sequentially and 16.4% higher year over year. For the full 2022 fiscal year, analysts are looking for EPS of $6.11, a gain of about 5% year over year, and sales of $5.07 billion, down about 1%.
The shares trade at 21.1 times expected 2022 EPS, 20.8 times estimated 2023 earnings of $6.21 and 20.6 times estimated 2024 earnings of $6.28 per share. The stock’s 52-week range is $86.02 to $149.50, and the company pays an annual dividend of $7.20 (yield of 5.58%). Total shareholder return over the past year was negative 5.37%.
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