U.S. bond and equity markets are closed Monday in observance of President’s Day.
Six of 11 market sectors closed higher Friday, but two of the three major indexes closed lower. Energy (down 3.65%) and technology (down 1.19%) gave up the most. Consumer staples (up 1.29%) and utilities (up 1%) posted the best gains. The Dow closed up 0.39%, the S&P 500 closed down 0.28%, and the Nasdaq Composite closed down 0.58%. Two-year Treasuries closed down 2 basis points at 4.6%, and 10-year notes slipped by 4 basis points to close at 3.82%. Oil traded down about 2.2% Friday and traded down up by 0.65% early Monday morning at $76.78.
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Thursday’s trading volume was slightly above the five-day average, and NYSE losers outpaced winners by 1,713 to 1,309, while Nasdaq advancers led decliners by about 11 to 10.
Before U.S. markets open Tuesday morning, Home Depot, Teck Resources, and Walmart will report quarterly results. Here’s our preview. Coinbase, Palo Alto Networks, and Transocean will report results after U.S. markets close Tuesday afternoon.
These three companies are set to report results before markets open Wednesday morning.
Baidu
Beijing-based Baidu Inc. (NASDAQ: BIDU) is China’s premier search engine and like its U.S. counterparts, is working on an artificial intelligence project similar to OpenAI’s ChatGPT, Microsoft’s Bing Chat, and Google’s Bard. Baidu’s entry is slated to be a chatbot called Ernie, and the company is expected to release more details this week on how it plans to integrate the chatbot into its search engine, automobile technology, and smart assistants. Baidu’s stock has added about 24% since the beginning of the year.
Of 37 brokerages covering the stock, 30 have a Buy or Strong Buy rating on the shares, and the other 7 rate the stock a Hold. At a current price of around $142.00, the stock’s upside potential based on a median price target of $173.37 is about 22.1%. At a high price target of $231.60, the upside potential is 63.1%.
Analysts expect Baidu to post fourth-quarter revenue of $4.63 billion, a sequential increase of 1.3% and a decline of 11.1% year over year. Adjusted earnings per share (EPS) are forecast at $2.06, down 13.2% sequentially and up 12.6% year over year. For the full 2022 fiscal year, the consensus estimate calls for EPS of $8.38, down 0.5% year over year, and revenue of $17.91 billion, down 8.6%.
The company’s stock trades at a multiple of 16.9 times expected 2022 EPS, 15.1 times estimated 2023 earnings of $9.38, and 13 times estimated 2024 earnings of $10.90 per share. The stock’s 52-week range is $73.58 to $170.35. Baidu does not pay a dividend and total shareholder return for the past year was negative 14.84%.
Stellantis
Automaker Stellantis NV (NYSE: STLA) has seen its stock price drop by about 8.6% over the past 12 months, far better than Ford’s 26.5% share price decline and better than GM’s drop of about 11.6%. In December, Stellantis announced it was idling its Jeep Cherokee assembly plant in Illinois at the end of this month. More than 1,300 workers will be let go. More than 700 workers at other plants that supplied parts to the assembly plant will also lose their jobs. The company is also opening a software development plant in Poland near an existing manufacturing plant.
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Of 23 brokerages covering the stock, 17 have a Buy or Strong Buy rating on the shares, and the other 6 rate the stock a Hold. At a current price of around $17.00, the stock’s upside potential based on a median price target of $19.23 is about 13.1%. At a high price target of $38.45, the upside potential is 126.2%.
Analysts are looking for fourth-quarter revenue of $49.75 billion, a sequential increase of 20.6% and a decline of 1.2% year over year. Adjusted EPS is forecast at $2.09. Comparative data is not available. For the full 2022 fiscal year, the consensus estimate calls for EPS of $5.50, down 2.9.4% year over year, and revenue of $188.68 billion, up 9%.
The company’s stock trades at a multiple of 3.1 times expected 2022 EPS, 3.8 times estimated 2023 earnings of $4.46, and 3.6 times estimated 2024 earnings of $4.70 per share. The stock’s 52-week range is $11.37 to $19.86. Stellantis pays an annual dividend of $1.09 (yield of 6.32%) and the total shareholder return for the past year was negative 1.23%.
TJX Companies
The TJX Companies Inc. (NYSE: TJX) operates around 3,000 retail stores worldwide under well-known names like T.J. Maxx, Marshall’s, and HomeGoods. Over the past 12 months, the share price has risen by around 22.5%. The off-price posted a new 52-week high in mid-January but has bounced lower since then. Walmart’s results will come out a day before TJX’s and a good report from the massive retailer is likely to push TJX stock up as well.
Of 26 analysts covering the company, 19 have a Buy or Strong Buy rating on the stock, and 6 others rate the shares a Hold. At a current price of around $80.00, the upside potential based on a median price target of $87.00 is 8.8%. At the high price target of $95.00, the upside potential is 18.8%.
Fourth-quarter revenue is forecast to come in at $14.07 billion, down 1.9% sequentially and up 1.6% year over year. Adjusted EPS is pegged at $0.89, up 16.1% sequentially and up 14.1% year over year. For the 2023 fiscal year that ended in January, analysts expect EPS of $3.12, up 9.5%, on sales of $49.46 billion, up 1.9%.
TJX’s stock trades at a multiple of 25.6 times expected 2023 EPS and 22.4 times estimated 2024 earnings of $3.56, and 20.1 times estimated 2025 earnings of $3.98 per share. The stock’s 52-week range is $53.69 to $83.13. TJX pays an annual dividend of $1.18 (yield of 1.48%). Total shareholder return for the past 12 months was 24.7%.
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