In early trading on Monday, the Dow Jones industrials were up 0.91%, the S&P 500 up 0.73% and the Nasdaq up 0.34%.
Before U.S. markets opened on Monday, Carnival reported earnings per share (EPS) and revenue that beat consensus estimates. Booking volume reached an all-time high. Yet the cruise line operator issued downside guidance for the current quarter and the full 2023 fiscal year. Shares traded up about 2.2% shortly after the opening bell.
BioNTech beat both top-line and bottom-line estimates, but the company’s outlook for fiscal 2023 blunted the good news. The company said it expects revenue from its COVID-19 vaccine to come in at around $5.4 billion, down from $18.3 in 2022 and from $20.5 billion in 2021. Shares traded down about 5.5% Monday morning.
Walgreens and Leonardo DRS will report quarterly results first thing Tuesday morning.
Here is a preview of what to expect when these three companies report results late Tuesday or early Wednesday.
Lululemon
Lululemon Athletica Inc. (NASDAQ: LULU) has posted a share price decline of 1.4% over the past 12 months. The stock’s 52-week high was seen more than 11 months ago. Since hitting its 52-week low a month later, the share price has risen by about 20.3%. The company’s “We Made Too Much” sales refer to inventory, not revenue, alas. And that is Lululemon’s problem: getting rid of excess inventory. Expect the company to have more to say about inventory when it reports results after markets close Tuesday.
Of 33 brokerages covering Lululemon, 21 have a Buy or Strong Buy rating and eight more have Hold ratings. At a recent price of $313.00 a share, the upside potential based on a median price target of $385.00 is 23%. At the high price target of $470.00, the upside potential is 50.2%.
Fourth-quarter fiscal 2023 revenue is forecast at $2.7 billion, which would be up 45.4% sequentially and by 26.8% year over year. Adjusted EPS are forecast at $4.26, up 113.1% sequentially and 26.4% higher year over year. For the full fiscal year that ended in January, analysts expect Lululemon to report EPS of $9.92, up 27.4%, on sales of $8.04 billion, up 28.4%.
Lululemon stock trades at 31.6 times expected 2023 EPS, 57.7 times estimated 2024 earnings of $11.31 and 23.8 times estimated 2025 earnings of $13.20 per share. The stock’s 52-week trading range is $251.51 to $410.700. The company does not pay a dividend. Total shareholder return for the past year is negative 1.35%.
24/7 Wall St.Micron
Shares of semiconductor maker Micron Technology Inc. (NASDAQ: MU) have lost nearly 22% over the past 12 months. They started to decline almost exactly one year ago. For the year to date, Micron stock is up 22.4%, equal to its share price nine months ago. But it has been a rollercoaster ride, with three peaks and three valleys. The latest valley was not as deep as the first two, and the recovery, begun about two weeks ago, is nearing the height of its latest peak. A solid report after markets close Tuesday could push the shares higher. Micron’s outlook needs to offer investors some hope of a better-than-expected year.
Of 37 analysts covering Micron stock, 27 have a Buy or Strong Buy rating and another eight rate it at Hold. At a share price of around $61.00, the upside potential based on a median price target of $66.00 is 8.2%. At the high target of $100.00, upside potential is 39%.
Second-quarter fiscal 2023 revenue is forecast at $3.71 billion, down 9.3% sequentially and 110.0% lower year over year. Analysts expect an adjusted loss per share of $0.88, worse than the $0.04 loss in the prior quarter and well below EPS of $2.14 in the first quarter of fiscal 2022. For the full fiscal year ending in August, revenue is forecast at $15.91 billion, down 48.3%, and the full-year loss is forecast at $2.55, compared to last year’s EPS of $8.35.
Micron stock trades at 52.1 times estimated 2024 EPS of $1.17 and 14.2 times estimated 2025 earnings of $4.31 per share. The stock’s 52-week range is $48.43 to $86.24, and Micron pays an annual dividend of $0.46 (yield of 0.75%). Total return over the past 12 months was negative 21.2%.
Paychex
Paychex Inc. (NASDAQ: PAYX) is the country’s second-largest integrated human resources outsourcer of staffing and employment services such as payroll and insurance. The stock has lost nearly 15% from its share price over the past 12 months, including a decline of 5.8% so far in 2023. Paychex has only missed EPS estimates once since the August 2018 quarter and missed sales estimates only twice during the same period. Paychex reports quarterly results on Wednesday morning.
Earlier this month, the company released its small business job index indicating that employment growth had improved in each of the first two months of 2023. The index reading of 99.66 is near a record high set in February of 2022 of 101.33.
Of 19 analysts covering the stock, 13 have a Hold rating and three rate it at Buy or Strong Buy. At a share price of around $109.00, the upside potential based on a median price target of $119.50 is 9.6%. The high price target of $140.00 implies upside of about 28.1% to the current price.
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