While macro concerns and falling commodity prices have plagued the market in recent days, companies must overcome these challenges and focus on returning value to shareholders. Here’s what to watch for this week in earnings reports from Wal-Mart Stores, Inc. (NYSE:WMT), NVIDIA Corporation (NASDAQ:NVDA), Deere & Company (NYSE:DE), and Virgin America Inc (NASDAQ:VA).
Wal-Mart Stores, Inc.
Wal-Mart is set to release Q4:2015 earnings on Thursday, February 18 before market open. Analysts expect the retail giant to post revenues of $130.76 billion and earnings of $1.54 per share, compared to revenues of $131.56 billion and earnings of $1.61 per share from the same quarter of last year.
For this report, investors will be focused on the effects of the company’s recent restructuring. Last month, the company announced store closures in the U.S. of Walmart Express and some under-performing stores in Brazil, with the goal of focusing on its core Megacenters. However, the company has already announced plans to open more than 300 new stores in fiscal 2017.
Investors will also be focusing on the macro effects on Wal-Mart’s overseas markets coupled with with currency fluctuations and a strong U.S. dollar. Despite some headwinds, the company guided same store sale growth of 1% for the fourth quarter and an e-commerce sales growth rate in the mid-to-high teens. Other factors to watch for include higher wage and training expenses, growth investments, the release of e-payment strategy Wal-Mart Pay, and the effects of lower energy prices.
According to TipRanks’ statistics, out of the 9 analysts who have rated the company in the past 3 months, 2 are bullish while 7 remain neutral. The average 12-month price target for the stock is $65.50, marking a 1% downside from where shares last closed.
NVIDIA will release its Q4:2016 earnings on Wednesday, February 17 after market close. Analysts are expecting revenues of $1.31 billion, compared to $1.25 billion for the same quarter of last year, and earnings of $0.32 per share, compared to $0.35 for the same quarter of last year.
Following its record Q3 revenue release, the company expects to keep the momentum going as a result of gaming, particularly from eSports, virtual reality, and the release of new games. Investors are also watching for results from the company’s automotive segment, which reported 52% y/y growth last quarter.
Investors will be focused on increased competition, as Advanced Micro Devices tries to gain GPU market share through new product launches. Similarly, NVDA is battling NXP Semiconductors in automotive and Intel in its data segment center as well as gaming. Other factors to watch for include the slowdown in professional visualization, PC and Tegra OEM segments as a result of decelerating demand for consumer PCs. In an effort to combat some of these challenges, the company is aiming to generate revenues through licensing its GPU patents.
According to TipRanks’ statistics, out of the 5 analysts who have rated the company in the past 3 months, 3 gave a Buy rating, 1 gave a Sell rating, and 1 remains on the sidelines. The average 12-month price target for the stock is $33.40, marking a 30% upside from where shares last closed.
Deere & Company
Deere is set to release Q1:2016 earnings on Friday, February 19 before market open. Analysts expect the agricultural machinery giant to post revenues of $4.6 billion and earnings of $0.70 per share, compared to revenues of $6.38 billion and earnings of $1.12 per share from the same quarter of last year.
Investors will be watching for the effect of ever falling commodity prices, which have resulted in low demand for the company’s product and consequently hindered sales in the past few quarters. Other investor concerns include macro issues in Deere’s international segments. Paired with a strengthening dollar, some believe this combination will hurt the company’s export business, as prices will rise to adjust for the headwinds, and many are unsure if customers are willing to pay an increased price.
The company issued weak guidance for 2016, predicting major demand declines mainly from its U.S. and Canada divisions. However, the company plans to cut costs and improve technological efficiency, as well as improve asset turnover and increase international sales. Pointing to the cyclical nature of commodity prices along with a predicted population increase set to boost demand, some are optimistic DE stock will recover.
According to TipRanks’ statistics, out of the 9 analysts who have rated the company in the last 3 months, 3 are bullish, 3 are bearish, and 3 remain on the sidelines. The average 12-month price target for the stock is $76.56, marking a 2% downside from where shares last closed.
Virgin America Inc
Virgin America will release its Q4:2015 results on Thursday, February 18 before market open. For this earnings report, analysts expect the airline to post revenues of $392.1 million and earnings of $1.23 per share, compared to the same quarter of last year in which the company posted revenue of $372.2 million and earnings of $.71 per share.
For this report, investors are expecting solid growth based on recent initiatives such as adding routes and increasing existing routes. The airline had a successful launch of its new routes to Hawaii from San Francisco, directly competing with Hawaiian Airlines, and new routes from Dallas. Related, the company is discontinuing its short-haul Austin flights, which is expected to reduce unit costs. Virgin also recently announced plans on purchasing up to 10 new planes, with expected delivery in 2017 and 2018.
Other factors to consider for this report include easing competition for certain New York routes, better revenue management, and a 12.9% y/y increase in revenue passenger miles reported in its January traffic report.
According to TipRanks’ statistics, only 2 analysts have rated the company in the past 3 months, both with a bearish rating. The average 12-month price target for the stock is $35.50, marking a 27% upside from where shares last closed.