Earnings Previews: Home Depot, iQIYI, Sea Limited, Tencent Music
In mid-morning trading on Friday, the Dow Jones industrials were down 0.17%, the S&P 500 down 0.21% and the Nasdaq 0.33% lower.
After U.S. markets closed on Thursday, Faraday Future reported a diluted net loss per share of $0.07, well below the single analyst estimate calling for a loss per share of $0.43. The company did not report any revenue but did report net income of $6.5 million, thanks to a change in its fair value measurement from a loss of $149 million in the first quarter of last year to a gain of $94.92 million this year. Shares traded up 16.7% Friday morning.
News Corp. reported better-than-expected earnings per share (EPS) and revenue, but the company’s only division to post a year-over-year revenue increase was its Dow Jones unit. The company is cutting headcount and implementing other cost-saving measures. Shares were up about 6.3%.
Petrobras reported first-quarter revenue of $26.77 billion, slightly higher than expectations, and net income of $7.34 billion. Based on approximately 6.5 billion shares outstanding, earnings per American depositary receipt (ADR) came in at about $1.13, also higher than analysts expected. ADRs traded up about 6.4%.
No notable earnings reports are due out Friday afternoon. Before U.S. markets open on Monday, Bitfarms and Workhorse are scheduled to release quarterly results. Later in the day, look for reports from Canoo and Nu Holdings.
Here is a look at four companies scheduled to report results before first thing Tuesday morning. One is a Dow stock, and the others are among U.S.-listed Asian stocks that get a lot of attention from investors.
Home Depot Inc. (NYSE: HD) has added about 2.5% to its share price over the past 12 months. Since posting its 52-week low late last June, the stock has increased by 9.6%, including a drop of more than 8% so far in 2023.
Sales growth turned negative in the December quarter after 11 straight quarters of increases. EPS have grown in 11 straight quarters, but the pace has slowed. The company already has indicated that sales are expected to be flat year over year and that profits are expected to decline slightly. The shares could be punished if they do not show some spirit in the April quarter.
Of 36 analysts covering the stock, 21 have a Buy or Strong Buy rating, and 14 rate it at Hold. At a recent share price of around $290.00, the upside potential based on a median price target of $335.00 is about 15.5%. At the high price target of $400.00, the upside potential is 37.9%.
Analysts expect Home Depot to report fiscal first-quarter revenue of $38.42 billion, which would be up 7.2% sequentially but down about 1.3% year over year. Adjusted EPS are forecast at $3.82, up 15.7% sequentially and 6.1% lower year over year. For the full 2024 fiscal year ending in January, EPS are forecast at $15.75, down 5.66%, on sales of $156.68 billion, down 0.5% year over year.
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Home Depot stock trades at 18.4 times expected 2024 EPS, 17.2 times estimated 2025 earnings of $16.79 and 16.3 times estimated 2026 earnings of $17.74 per share. The stock’s 52-week trading range is $264.51 to $347.25. The Dow component pays an annual dividend of $8.36 (yield of 2.88%). Total shareholder return for the past year was 4.78%.
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