The second week of June-quarter earnings results continues to see companies overwhelmingly beat or at least match analysts’ forecasts. Whether that is due to low expectations or a strong economic recovery probably depends on one’s point of view.
On Tuesday, we previewed four companies reporting results after markets close Wednesday (CSX, Kinder Morgan, Las Vegas Sands and Texas Instruments) along with four companies that will report before markets open Thursday morning (American Airlines, AT&T, Cleveland-Cliffs and Freeport-McMoRan).
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Here’s a look at three companies due to report results after markets close Thursday.
Intel
Semiconductor maker Intel Corp. (NASDAQ: INTC) has struggled in a market where its competitors have thrived. Over the past 12 months, the chipmaker’s shares have dipped by about 5.5%, although they have been recovering in 2021, up 12.2%, including a second-quarter share price drop of 11.7%. Last year, Intel stock dropped by more than 15%. The company is rumored to be preparing an offer in the neighborhood of $30 billion to acquire chip manufacturer GlobalFoundries.
Analyst sentiment on the stock is decidedly mixed. Of 42 surveyed analysts covering the company, 17 rate the shares a Hold while 15 have Buy or Strong Buy ratings on the stock. The other 10 rate the shares at Sell or Strong Sell. At a recent price of around $55.20, upside potential based on the median price target of $65.50 is about 18.7%. At the high price target of $90, the implied upside is 63%.
Second-quarter revenue is forecast to come in at $17.8 billion, about 4% lower sequentially and 9.8% lower year over year. Adjusted earnings per share (EPS) are forecast at $1.07, down 23% sequentially and 13% year over year. For the full year, current estimates call for a 12.7% drop in EPS to $4.63 and a 6.7% decline in revenue to $72.65 billion.
Intel stock trades at around 11.9 times expected 2021 EPS, 12.2 times estimated 2022 EPS and 11.3 times estimated 2023 earnings. The stock’s 52-week trading range is $43.61 to $68.49. The company pays an annual dividend of $1.39 (yield of 2.54%).
Snap
Snap Inc. (NYSE: SNAP) bills itself as a camera company, but most people probably think of it as a social media play that deletes photos and videos after several seconds. The share price is up more than 150% over the past 12 months, including an increase of almost 25% so far in 2021.
Snap’s key metric is daily active users. In the first quarter, that number rose by 16 million to 281 million. Analysts at Canaccord Genuity Snap’s daily active user total to rise by 22%, from 238 million in the second quarter of 2020 to 290 million. That should be an easy target to hit.
Of 38 analysts covering the company, 22 rate the stock a Buy and another six rate the stock at Strong Buy. There are nine Hold ratings and just one Sell rating. At a price of around $62.30, the implied upside based on a median price target of $79 is nearly 27%. At the high price target of $100, the upside potential is more than 60%.
The second-quarter revenue forecast calls for $846.57 million, up 10% sequentially and up 86% year over year. Snap is expected to post an adjusted per-share loss of $0.01 in the second quarter, compared to a break-even first quarter and a loss of $0.09 per share in the second quarter of last year. For the full year, adjusted EPS is forecast to reach $0.22, up from a loss of $0.06 in 2020. Revenue is expected to rise by 56% to $3.91 billion for the full year.
Snap stock trades at around 292.7 times expected 2021 EPS, 98.0 times estimated 2022 EPS and 47.0 times estimated 2023 earnings. The stock’s 52-week range is $20.61 to $73.59. The company does not pay a dividend.
Social media platform Twitter Inc. (NYSE: TWTR) has seen its share price increase by nearly 90% in the course of the past 12 months. For the year to date, Twitter stock has added more than 25%, including a drop of 15% in the first two weeks of January.
As with Snap, the daily active user count is Twitter’s most-watched metric. The company reported 186 million daily users in the second quarter of last year and is expected to report 206 million for the second quarter of 2021. That’s a growth rate of 11%, which includes last year’s spike due to pandemic-related stay-home orders.
Of 40 analysts covering the stock, 25 rate the shares a Hold while just 10 have assigned a Buy or Strong Buy rating. At around $67.90 apiece, the shares have outrun their median price target of $65. At the high target of $95, the implied upside on the stock is about 40%.
Analysts expect Twitter to report sales of $1.06 billion, up about 1.9% sequentially and up about 55% year over year. Adjusted EPS is forecast at $0.07 down by 56% sequentially and up from a per-share loss of $1.39 in the same quarter last year. For the full year, analysts expect Twitter to report EPS of $0.81, compare to a loss last year of $0.89 per share. Revenue for the year is forecast to rise by nearly 29% to $4.79 billion.
Twitter stock trades at around 253.1 times expected 2021 EPS, 112.6 times estimated 2022 EPS and 64.0 times estimated 2023 earnings. The stock’s 52-week range is $35.65 to $80.75. The company does not pay a dividend.
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