Earnings Previews: Costco, Gap, Marvell, Pinduoduo
In the first half-hour of trading on Tuesday, the Dow Jones industrials were down 0.58%, the S&P 500 down 0.67% and the Nasdaq 0.62% lower.
After U.S. markets closed on Tuesday, Palo Alto Networks beat estimates on both the top and bottom lines. Guidance was a bit above expectations, and margins are improving. That was enough to push the stock up by around 8% in early trading on Wednesday.
VFC also beat the consensus earnings per share (EPS) and revenue estimates. Guidance was tepid, and the stock traded down about 1.2%.
Before Wednesday’s opening bell, Kohl’s posted positive surprises for both EPS and revenue. Same-store sales decreased, but so did inventory. That helped boost gross margins, but not by enough to embolden the company to raise guidance. Still, investors liked it enough to give the stock a 9% gain in the early going Wednesday.
Xpeng posted a smaller-than-expected loss per share, but revenue came in 46% lower than a year ago and 29% lower than the consensus estimate. Shares traded down 11% early Wednesday.
After markets close on Wednesday, Nvidia reports quarterly results, as do Snowflake and UiPath. Look for the latest results from Best Buy and Dollar Tree Thursday morning.
Here is what analysts are looking for from three companies reporting results after markets close on Thursday and one reporting first thing Friday morning. No notable earnings reports are due later on Friday, and U.S. markets will be closed on Monday.
Shares of Costco Wholesale Corp. (NASDAQ: COST) have added nearly 13% over the past 12 months, including a year-to-date increase of around 6.2%. In the February quarter, Costco reported net income of $1.47 billion. Membership fee revenue totaled $1.03 billion, or about 70% of net income. The company reported global memberships totaling 123 million at the end of the prior quarter, up from 114.8 million in the same quarter of 2023.
The company has not raised membership fees since 2017, but virtually everyone expects an increase sooner rather than later. Could the company announce a raise when it reports quarterly results late Thursday?
Analysts are solidly bullish on the stock, with 26 of 36 having a Buy or Strong Buy rating. The other 10 rate it at Hold. At a recent price of around $485.00 a share, the upside based on a median price target of $550.00 is 13.4%. At the high price target of $635.00, the upside potential is 30.9%.
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