Shortly after Wednesday’s opening bell, the Dow Jones industrials were down 0.46%, the S&P 500 down 0.34% and the Nasdaq down 0.02%.
After U.S. markets closed on Tuesday, Box reported better-than-expected results on both the top and bottom lines. Second-quarter guidance was slightly above the consensus estimates, and full-year guidance was in line with expectations. Shares traded up by around 2.9% early Wednesday.
HP missed the consensus revenue but posted a beat on earnings per share (EPS). Revenue fell 21% year over year, and PC revenue tumbled by 29% and volume fell by 28%. Guidance for the current quarter and the full fiscal year were in line with expectations. The stock traded down 4.7% Wednesday morning.
Hewlett Packard Enterprise also posted better-than-expected EPS while missing on revenue. Investors did not appear to be in a congenial mood, however, as shares traded down about 9%.
Before markets opened on Wednesday, Frontline reported revenue and EPS above analysts’ estimates. The oil shipper expects demand for oil to rise by about 3 million barrels a day in the second half of this year. That is not out of the question, but not a slam dunk either. Shares traded down 6.1%.
After U.S. markets close on Wednesday, C3.ai, CrowdStrike, Nordstrom and Salesforce are expected to report quarterly results. Then look for reports from Bilibili, Dollar General and Macy’s the following morning.
Here is a preview of three companies releasing their quarterly results later on Thursday.
Broadcom
Chipmaker Broadcom Inc. (NASDAQ: AVGO) has added more than 28% to its share price in the past month, lifting the stock’s 12-month gain to nearly 38%. The company’s recent multiyear, multibillion deal to supply Apple with 5G radio frequency (RF) components and wireless chips certainly helped.
Add to that the company’s claims that its current network switch chips are the equal of Nvidia’s newest Spectrum-X and that the AI powerhouse’s new “lossless Ethernet” is just marketing speak, and Broadcom believes it is well-positioned to compete with Nvidia for a foothold in the AI and machine learning (ML) markets. Should be interesting. Broadcom is also working on getting its $61 billion acquisition of VMware past regulators by a new deadline of November 26.
Analysts remain strongly bullish on the stock, with 20 of 28 having Buy or Strong Buy ratings. Another five rate it at Hold. At a recent share price of around $803.00, the stock has outrun its median price target of $700.00. Based on a high price target of $925.00, the upside potential is 15.2%.
For Broadcom’s fiscal second quarter, analysts are looking for revenue of $8.71 billion, which would be down 2.3% sequentially but up 7.5% year over year. Adjusted EPS are forecast at $10.14, down 1.8% sequentially and 11.8% higher year over year. For the full 2023 fiscal year ending in October, estimates call for EPS of $41.33, up 9.8%, on sales of $35.46 billion, up 6.8%.
Broadcom trades at 19.4 times expected 2023 EPS, 18.1 times estimated 2024 earnings of $44.47 and 17.0 times estimated 2025 earnings of $47.15 per share. Its 52-week trading range is $415.07 to $921.78. Broadcom pays an annual dividend of $18.40 (yield of 2.26%). Total shareholder return for the past year was 42.22%.
Dell
Over the past 12 months, shares of Dell Technologies Inc. (NYSE: DELL) have shed 4.5% of their price. The company posted a new 52-week low in mid-October, and shares have bounced up by about 43.8% since then. Dell announced a 5% reduction of its workforce in February (about 6,650 jobs) in an effort to cut costs in the face of a sharp downturn in PC sales. The recent spike in AI-related stocks does not, alas, trickle down to desktops and laptops.
Sentiment among analysts remains bullish, with 12 of 19 brokerages having a Buy or Strong Buy rating and the rest rating it at Hold. At a share price of around $47.32, the upside potential based on a median price target of $47.55 is negligible. At the high price target of $55.00, the upside potential is about 16.2%.
The consensus revenue estimate for Dell’s first quarter of fiscal 2024 is $20.27 billion, down 19.0% sequentially and by 22.4% year over year. Adjusted EPS are forecast at $0.85, down 52.6% sequentially and 53.8% lower year over year. For the full fiscal year ending in January, analysts expect EPS of $5.30, down 30.4%, on sales of $87 billion, down 15%.
Dell stock trades at 8.9 times expected 2024 EPS, 7.5 times estimated 2025 earnings of $6.32 and 6.9 times estimated 2026 earnings of $6.85 per share. Its 52-week range is $32.90 to $51.75. Dell pays an annual dividend of $1.48 (yield of 3.08%), and the total shareholder return for the past year was negative 1.25%.
SentinelOne
Shares of cybersecurity software provider SentinelOne Inc. (NYSE: S) have declined by more than 21% over the past 12 months, including an increase of nearly 45% so far in 2023. More than 31% of that share price increase has come in the past month, riding the wave of investor interest in all things AI.
SentinelOne’s generative AI threat-hunting tool, Purple AI, integrated with the company’s Singularity platform, is better than either Microsoft’s or Google’s offerings, according to CEO Tomer Weingarten, but then, he would say that wouldn’t he? All these products are so new that it will take a while to sort them out. But SentinelOne is in the pack, now it has to prove that it can rise above it.
Of 30 brokerages covering the company, 18 have a Buy or Strong Buy, and the other 12 have Hold ratings. At a price of around $21.00, the shares already trade above their median price target of $20.50. At the high price target of $49.00, the upside potential is 133%.
24/7 Wall St.First-quarter revenue is forecast at $136.61 million, up 8.3% sequentially and by 74.6% year over year. The company’s adjusted loss per share is forecast at $0.17, compared to a loss of $0.14 sequentially, and better than the $0.21 per share loss in the year-ago quarter. For the full 2024 fiscal year ending in January, the company is expected to post a loss per share of $0.49, compared to a loss of $0.70 per share last fiscal year, on sales of $637.63 million, up 51%.
SentinelOne is not expected to post a profit in 2024 or 2025. Shares trade at 74.3 times estimated 2026 earnings of $0.43 per share. The stock’s 52-week range is $12.69 to $30.00. The company does not pay a dividend, and the total return for the past year was negative 21.65%.
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