After U.S. markets closed on Tuesday, AMD beat both earnings per share (EPS) and revenue estimates and issued third-quarter guidance in line with Wall Street estimates. The chipmaker also said it expects current quarter data center and client revenue to grow by double digits while gaming and embedded segments weaken. Shares traded down 6.6% in late morning action.
Devon Energy met EPS expectations and beat the consensus revenue estimate by almost 6%. However, revenue was down 38.6% year over year for the quarter, and shares traded down 6.6%.
Starbucks beat the consensus EPS estimate but missed on revenue, which rose by 12.5% year over year. The stock traded up 2.6%.
Virgin Galactic also beat the EPS estimate and missed on revenue. The company issued downside revenue guidance for the current and next quarters as well. The stock traded down 5.3%.
Before markets opened on Wednesday, Cameco reported a smaller loss per share than expected but missed the consensus revenue estimate. Revenue fell 13.6% year over year. Shares traded down 7.2%.
CVS Health beat estimates on both the top and bottom lines and reaffirmed fiscal 2023 EPS guidance. The stock traded up 3.9% Wednesday morning.
Kraft Heinz missed the consensus revenue estimate by about 1.1% and beat on EPS. Revenue rose 2.5% year over year. Shares traded down about 0.3%.
Albemarle, MGM Resorts, Occidental Petroleum, PayPal and Qualcomm will report quarterly results after markets close on Wednesday. The following morning, AB-InBev, ConocoPhillips and Warner Bros. Discovery are on deck to report quarterly earnings, followed by Airbnb, Amazon and Apple later on Thursday.
Here is a preview of what to expect from three more companies reporting results after Thursday’s closing bell.
Block
Over the past 12 months, the share price of Block Inc. (NYSE: SQ) has declined by only about 2%. But that is after a jump of almost 22% in the year to date. Since posting a 52-week low in early November, the shares have risen about 46.1%. That gain includes a 15% drop in late March on a short seller’s report. Investors will be watching for higher gross profits from Block’s Cash App business.
Analysts remain mostly bullish on the shares, with 33 of 47 brokerages having a rating of Buy or Strong Buy. Another 12 rate it at Hold. At a recent price of about $75.80 a share, the upside potential based on a median price target of $90.00 is 18.7%. At the high price of $147.00, the upside potential is almost 94%.
Second-quarter revenue is forecast at $5.1 billion, which would be up 2.2% sequentially and by 15.9% year over year. Adjusted EPS are expected to come in at $0.37, down 7.3% sequentially but 105.6% higher year over year. For the full 2023 fiscal year, estimates call for EPS of $1.71, up 70.7%, on sales of $20.73 billion, up 18.2%.
Block’s shares trade at 44.3 times expected 2023 EPS, 31.7 times estimated 2024 earnings of $2.38 and 24 times estimated 2025 earnings of $3.15 per share. Its 52-week trading range is $51.34 to $93.19. Square does not pay a dividend. The total shareholder return for the past year was negative 3.07%.
Coinbase
Coinbase Global Inc. (NASDAQ: COIN) posted its 52-week high almost exactly one year ago. Since then, the shares dropped 92% before battling back to show a gain of nearly 6% over the past 12 months. In early June, the Securities and Exchange Commission filed suit against the company for trading crypto assets that were not registered with the agency as securities. Coinbase has indicated it will fight the suit as a sort of white knight defending the entire cryptosphere.
Of 26 analysts covering the stock, just eight have a Buy or Strong Buy rating, and 11 rate it at Hold. At a price of around $92.50, the shares trade well above their median price target of $67.50. At the high target of $200.00, the upside potential is about 116.2%.
For the second quarter of 2023, the consensus revenue estimate is $638.79 million, down by 17.3% sequentially and by 21.0% year over year. Analysts are forecasting an adjusted loss per share of $0.62, compared to EPS of $0.45 in the first quarter and a per-share loss of $0.87 in the year-ago quarter. For the full year, analysts now expect a loss per share of $2.97, compared to a 2022 loss of $7.83 per share, on sales of $2.73 billion, down nearly 15%.
Coinbase is not expected to post a profit in 2023, 2024 or 2025. The enterprise value to sales multiple for 2023 is 7.5, 6.6 for 2024 and 6.0 for 2025. The 52-week trading range is $31.55 to $116.30. Coinbase does not pay a dividend, and the total shareholder return for the past year was 37.49%.
Livent
Lithium producer Livent Corp. (NYSE: LTHM) has seen its share price fall by about 3% over the past 12 months, including a year-to-date gain of 18.5%. Lithium carbonate prices have dropped by around 45% since reaching a peak in mid-November, returning to a level it first reached in December 2021 when shares were climbing.
In early May, the company agreed to an all-stock $10.6 billion merger with Australia’s Allkem, a lithium miner with assets near Livent’s Argentina brine operations. Current Allkem shareholders will own 56% of the yet-to-be-named new company that will be domiciled in the United States and traded on the New York Stock Exchange. The merger is expected to close this year.
Of 19 analysts covering the stock, 14 have a Buy or Strong Buy rating and the others have Hold ratings. At a share price of around $23.50, the implied upside based on a median price target of $32.00 is 36.2%. At the high price target of $45.00, the implied upside is 91.5%.
Second-quarter revenue is forecast at $251.56 million, down 0.8% sequentially but 15.0% higher year over year. Adjusted EPS are forecast at $0.46, down 22.6% sequentially but up 24.3% year over year. For the full 2023 fiscal year, EPS are currently forecast at $2.05, up 46.5%, on revenue of $1.08 billion, up 33.3%.
Livent stock trades at 11.4 times expected 2023 EPS, 9.7 times estimated 2024 earnings of $2.42 and 7.2 times estimated 2025 earnings of $3.26 per share. The 52-week trading range is $18.26 to $36.38. Livent does not pay a dividend. Total shareholder return for the past year was negative 9.95%.
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