In the first hour of trading on Friday, the Dow Jones industrials were down 0.18%, the S&P 500 down 0.75% and the Nasdaq down 1.33%.

After U.S. markets closed on Thursday, Applied Materials handily beat top-line and bottom-line estimates. Guidance was a mixed bag, however, with customer spending in 2023 likely to be down again while the longer-term outlook is “highly positive.” Shares traded down about 1.2%

DraftKings also beat consensus estimates for profits and revenue. The sports betting firm issued guidance in line with analysts’ consensus estimates. Shares traded 14.3% higher Friday morning.

Vale reported earnings per share (EPS) and revenue above consensus estimates for the quarter, but net income was down 15.8% sequentially and 20.8% year over year. The stock traded was basically unchanged Friday morning.

Before markets opened on Friday, Deere reported solid beats on both EPS and revenue and raised its fiscal 2023 revenue guidance. Shares traded up 6.1% in early trading.

U.S. markets will be closed on Monday for the President’s Day holiday. On Tuesday, two Dow components and a major Canada-based mining company are set to report results before markets open.

Home Depot

Home Depot Inc. (NYSE: HD) has dropped more than 8% from its share price over the past 12 months. Since posting its 52-week high one year ago, the stock has declined by 5.4%. Over the past three months, shares are up 2%. The January quarter is typically the company’s annual low point, so the outlook for the April and July quarters will carry more weight than the results.

Of 35 analysts covering the stock, 21 have a Buy or Strong Buy rating and 13 rate it at Hold. At a recent share price of around $321.00, the upside potential based on a median price target of $343.00 is about 6.9%. At the high price target of $470.00, the upside potential is 46.4%.

Analysts expect Home Depot to report fourth-quarter revenue of $36 billion, which would be down 7.4% sequentially but up about 0.8% year over year. Adjusted EPS are forecast at $3.29, down 22.4% sequentially but 2.5% higher year over year. For the full 2023 fiscal year ending in January, EPS are forecast at $16.67, up 7.3%, on sales of $157.49 billion, up about 4.2% year over year.

Home Depot stock trades at about 19.3 times expected 2023 EPS, 19.1 times estimated 2024 earnings of $16.80 and 18.1 times estimated 2025 earnings of $17.75 per share. The stock’s 52-week trading range is $264.51 to $352.31. The Dow component pays an annual dividend of $7.60 (yield of 2.37%). Total shareholder return for the past year is negative 5.93%.

Teck Resources

Canada-based Teck Resources Ltd. (NYSE: TECK) mines metallurgical coal used for production of steel, copper, zinc and energy (primarily oil). Shares are up more than 21% for the past year, including a jump of 16% so far in 2023.
Bloomberg reported earlier this week that Teck Resources may announce a spin-off of its met coal business in order to focus more attention on its industrial metals. The company did not respond to requests for comment. Met coal accounted for 55% of Teck’s gross profit in 2021. In addition to the headline value of getting rid of its coal business, a spin-off would lower the price of the remaining part to a range of $10 billion to $15 billion and make Teck a more attractive takeover target.

Of 23 analysts covering the stock, 16 have a Buy or Strong Buy rating and six more rate it at Hold. At a share price of around $44.00, the upside potential based on a median price target of $45.90 is 4.3%. At the high price target of $55.50, the upside potential is 26.1%.

Analysts expect Teck to report fourth-quarter revenue of $2.59 billion, down 23.4% sequentially and by 25.6% year over year. Adjusted EPS are expected to reach $0.94, down 25.1% sequentially and by 53.2% year over year. For the full 2022 fiscal year, EPS are pegged at $6.76, up 51%, on revenue of $14. billion, up 31.3%.

The stock trades at 6.5 times expected 2022 EPS, 9.1 times estimated 2023 earnings of $4.84 and 9.4 times estimated 2024 earnings of $4.66 per share. The stock’s 52-week range is $24.72 to $46.10. Teck pays an annual dividend of $0.37 (yield of 0.88%). Total shareholder return over the past 12 months was 23.52%.

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Walmart

The second Dow component reporting early Tuesday is Walmart Inc. (NYSE: WMT). Over the past 12 months, the company has seen its share price increase by just over 8%. After bouncing higher and then lower, the share price is roughly at its level three months ago. The holiday quarter is expected to be the company’s best of the year, but still less than 5% better than either of the two prior quarters. One analyst thinks that same-store sales could come in much better than that, which would be a nice positive surprise for investors.

Analysts remain bullish on the stock, however, with 31 of 41 having a Buy or Strong Buy rating and the rest with Hold ratings. At a share price of around $144.00, the upside potential at the median price target of $160.00 is 11.1%. At the high target of $175.00, the implied upside is 21.5%.

For its fourth quarter of fiscal 2023, Walmart is expected to report sales of $158.51 billion, up 4.7% sequentially and up by about the same percentage year over year. Adjusted EPS are pegged at $1.51, up 0.8% sequentially but 1.3% lower year over year. For the full 2023 fiscal year that ended in January, analysts forecast EPS of $6.08, down 5.9%, on sales of $602.17 billion, up 6.1%.

Walmart stock trades at 23.7 times expected 2023 EPS, 22.2 times estimated 2024 earnings of $6.50 and 20.2 times estimated 2025 earnings of $7.13 per share. The stock’s 52-week range is $117.27 to $160.77. Walmart pays an annual dividend of $2.24 (yield of 1.53%). Total shareholder return for the past year was 9.74%.

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