In Wednesday morning trading, the Dow Jones industrials were down 1.72%, the S&P 500 down 1.53% and the Nasdaq down 1.27%.

After U.S. markets closed on Tuesday, SentinelOne reported a smaller-than-expected loss per share and better-than-expected revenue. The cybersecurity firm also raised revenue guidance for the current quarter while lowering full-year revenue guidance below consensus. Shares traded up 11.8% Wednesday morning.
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Lennar reported earnings per share (EPS) and revenue that topped consensus estimates. The homebuilder said it expects to deliver 62,000 to 66,000 new homes this year. Shares traded up 2.6%.

StoneCo also beat estimates on the top and bottom lines, but first-quarter guidance was light. Shares traded up 5.3%.

After U.S. markets close Wednesday, Adobe and UiPath are scheduled to report earnings. then look for results from Academy Sports, Dollar General, KE Holdings and Lithium Americas the following morning.

Here is a preview of what analysts will be looking at when the following four companies report results late Thursday or early Friday.

Algonquin Power

Algonquin Power & Utilities Corp. (NYSE: AQN) has dropped nearly 48% from its share price over the past 12 months. The Canada-based company offers regulated and non-regulated utility services, including electricity generated from renewables. The company cut its dividend by 40% in January (for the current quarter), causing a drop of 43% in its share price since then. The good news is that even with that horrible start to the year, the stock is up almost 8% over the past three months. The utility firm reports quarterly earnings before Friday’s opening bell.

Of 15 analysts covering the stock, four have a Buy or Strong Buy rating and nine rate it at Hold. At a recent price of around $7.70 a share, the implied gain based on a median price target of $8.16 is 6%. Based on the high price target of $17.98, the upside potential for the stock is about 134%.

Analysts expect the company to report fourth-quarter revenue of $703.54 million, which would be up 5.5% sequentially and by 18.3% year over year. Adjusted EPS are expected to come in at $0.19, up 75.5% sequentially but down by 9.5% year over year. For the full 2022 fiscal year, Algonquin is expected to post EPS of $0.66, down 7.2%, on revenue of $2.69 billion, up 17.6%.

The company’s stock trades at 11.7 times expected 2022 earnings, 13.4 times estimated 2023 earnings of $0.58 per share and 12.6 times estimated 2024 earnings of $0.61 per share. The stock’s 52-week trading range is $13.38 to $16.25. Algonquin pays an annual dividend of $0.72 (yield of 9.62%). The dividend and yield do not reflect the cut announced in January. Total shareholder return for the past year was negative 44.1%.

Shares of hydrogen fuel-cell maker Ballard Power Systems Inc. (NASDAQ: BLDP) posted a 52-week high nearly a full year ago. Since then, the share price has declined by about 58.5%. The last time Ballard Power posted a profit was in the March quarter of 2015. Analysts’ projections through 2024 do not show any profit for the next eight quarters either, and revenue over the next two years is expected to rise by 87% to just $171 million. Ballard Power may be a growth company, but it is taking its own sweet time to show it. The company reports results first thing Friday morning.
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Analysts are cautious on the stock. Of 25 brokerages covering it, 16 have a Hold rating while six have a Buy or Strong Buy rating. At a share price of around $5.00, the stock trades above the median price target of $4.30. At the high price target of $8.34, the upside potential is about 67%.

Ballard Power is expected to report third-quarter revenue of $25.62 million, up 20% sequentially and down 30.2% year over year. Analysts are forecasting a loss per share of $0.14, flat sequentially, but a penny better than in the year-ago quarter. For the 2022 fiscal year, analysts anticipate a loss per share of $0.61, worse than the $0.39 per-share loss last year, on sales of $91.32 million, down about 12.6%.

The company is not expected to post a profit in 2022, 2023 or 2024. The stock’s enterprise value to sales multiple for 2022 is 6.4, for 2023 is 5.1 and for 2024 is 3.4. Ballard Power does not pay a dividend, and the total shareholder return for the past 12 months was negative 49.36%.

FedEx

Shares of FedEx Corp. (NYSE: FDX) posted a 52-week low after the company warned on earnings in September. A cost-saving plan to slash $2.7 billion in costs has boosted the share price by around 33% since that low, but investors are waiting to hear more about how costs are being cut before they add to their stakes in the company. Have costs fallen enough or has revenue improved enough to justify the 10% jump in the stock price since the beginning of the year? FedEx reports results late Thursday.

Analysts have adopted a wait-and-see position. Of 29 brokerages covering the stock, 14 have a Hold rating and the rest have Buy or Strong Buy ratings. At a share price of around $192.00, the upside potential based on a median price target of $213.50 is 11.2%. At the high price target of $265.00, the upside potential is 38%.
The consensus third-quarter revenue estimate is $22.74 billion, down 0.3% sequentially and 5.1% lower year over year. Adjusted EPS are forecast at $2.74, down 13.9% sequentially and by 40.3% year over year. For the full 2023 fiscal year ending in May, analysts expect EPS of $13.61, down 34%, on sales of $92.02 billion, down 1.6%.
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FedEx stock trades at 14.1 times expected 2023 EPS, 11.3 times estimated 2024 earnings of $16.93 and 9.5 times estimated 2025 earnings of $20.20 per share. The stock’s 52-week range is $141.92 to $248.76. FedEx pays an annual dividend of $4.60 (yield of 2.21%). Total shareholder return for the past year was negative 7.31%.

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Xpeng

China-based electric vehicle maker Xpeng Inc. (NYSE: XPEV) has seen its share price drop by about 60% over the past 12 months. Since putting in a 52-week low in early November, the shares are up about 18%. The big bump to shares came with the loosening of the pandemic lockdowns in China, but since peaking in early January, the stock is down nearly 35%. Auto sales have been drifting lower, due in part to price cuts on Tesla cars. Xpeng is scheduled to report quarterly results Friday morning.

Of 25 analysts covering the stock, 15 have a Buy or Strong Buy rating and six rate it at Hold. At a share price of around $7.80, the upside potential based on a median price target of $12.08 is 54.9%. At the high price target of $38.35, the upside potential is more than 350%.

Fourth-quarter revenue is forecast at $771.44 million, down 19.3% sequentially and by 42.6% year over year. The company’s adjusted loss per share is forecast at $0.35, compared to a per-share loss of $0.36 in the prior quarter. A year ago, Xpeng reported a loss per share of $0.22 in the December quarter. For the full 2022 fiscal year, the company is expected to post a loss per share of $1.19, compared with 2021’s loss of $0.86 per share, on sales of $3.95 billion, up 19.6%.

Xpeng is not expected to report a profit in 2022, 2023 or 2024. The enterprise value to sales multiple for 2022 is 1.0, falling to 0.6 and 0.4 in 2023 and 2024, respectively. The stock’s 52-week range is $6.18 to $35.35. Xpeng does not pay a dividend, and total shareholder return for the past year is negative 60.51%.

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