What to watch for this week from Seadrill Ltd (NYSE:SDRL), Palo Alto Networks Inc (NYSE:PANW), HP Inc (NYSE:HPQ), and Veeva Systems Inc (NYSE:VEEV).
Seadrill Ltd is expected to post Q3/2015 earnings before market open on Tuesday, November 24. Analysts expect earnings of $0.44 per share and revenues of $1.02 billion, compared to diluted earnings of $0.77 per share and revenues of $1.147 billion from last quarter.
Analysts note that the company exceeded estimates in the last 3 quarters, with last quarter beating estimates by 19 cents. Analysts believe this improvement is derived from better performance by the company’s jack up rigs as well as lower operating expenses. Some analysts reflect positive sentiment about the company’s offshore drilling contracts, noting that 70% of the company’s rigs are contracted through 2016. They expect these rigs to provide a consistent flow of income, noting that “economic utilization of the company’s fleet has been high over the past few quarters.” Despite these positive developments, investors remain concerned about this quarter’s falling oil prices, as the company relies on the oil and gas industry for revenue. Furthermore, these falling prices have deeply decreased demand for deep-water drilling and subsequently, the company’s bookings.
According to TipRanks’ statistics, out of the 3 analysts who have rated SDRL in the past 3 months, 2 gave a Sell rating while 1 remains on the sidelines. The average 12-month price target for the stock is $9.00, marking a 47% upside from where shares last closed.
Palo Alto Networks Inc
Palo Alto Networks is set to release Q1/2016 earnings on Monday after market close. Analysts expect the cyber-security company to post earnings of $0.32 per share and revenues of $284.4 million, compared to $0.28 per share $283.9 million, respectively, for the same quarter of last year.
Some analysts are expecting consistent revenue growth for this quarter due to the company’s strength in all of its regions and segments, new customers and expansion of existing customers, as well as product updates. Although posting disappointing Q4 earnings, many analysts believe that the upcoming earnings will reflect strong demand as well as international expansion opportunities, especially in Europe, the Middle East, and Asia. Analyst Andrew Nowinksi of Piper Jaffray stated, “We believe demand trends for Palo Alto Networks remained exceptionally strong in Q1 and that its pipeline heading into 2016 is also robust.” However, concerns include unbalanced spending and rising competition from Cisco and Check Point Software. Nowisnki continued, “We believe much of the selling pressure is attributable to investor concerns that the security spending environment is slowing.” Analyst Rob Owens of Pacific Coast also echoes a positive yet cautious sentiment, stating, “While we remain favorable on shares and the longer-term prospects for Palo Alto Networks, our near-term enthusiasm is muted into the print given a murky Q3 earnings season and a difficult sequential comparison.”
According to TipRanks’ statistics, out of the 19 analysts who have rated PANW in the last 3 months, 17 gave a Buy rating while 2 remain on the sidelines. The average 12-month price target for the stock is $201.18, marking an 18% upside from where shares last closed.
HP Inc is set to report Q4/2015 earnings on Tuesday after market close. Due to the company’s recent split into two separate companies focused on different markets and products, this is the last time that earnings from both companies will be reported together. Analysts expect combined earnings of $0.96 per share for the quarter, in accordance with company guidance of $0.92 to $0.98 per share, as well as a combined $26.36 billion in revenue.
Some analysts expect HP Inc, involved in the PC and printer sectors, to post higher than expected revenue for the quarter. They also believe that the company’s cost cutting measures for its printers and a general improvement in the PC market will reflect success in earnings. This follows last quarter’s concerns of a declining PC market, with the company posting Q3 5.5% y/y decrease in shipments. HPE, which focuses on newer technology and cloud computing, is expected to post revenues below analyst consensus due to growth concerns. However, investors are hopeful about HPE’s recent partnership with Microsoft. In this deal, HPE will offer cloud based solutions to Windows 10. Susan Hauser, corporate vice president of Microsoft Enterprise and Partner Group stated, “HPE and Microsoft can now offer enterprises a portfolio of tightly integrated services and solutions, designed to modernize and streamline their workflows and accelerate the transformation of their enterprise for continued growth.”
According to TipRanks’ statistics, out of the 18 analysts who have rated HP Inc in the last 3 months, 9 gave Buy rating while 9 remain on the sidelines. The average 12-month price target for the stock is $23.16, marking a 65% upside from where shares last closed.
Veeva Systems Inc
Veeva Systems, a cloud-based solutions company for the global life sciences industry, will report its Q3/2016 earnings on Tuesday, November 24 after market close. Analysts expect earnings of $0.11 per share and revenues of $103.64 million, compared to last quarter’s earnings of $0.10 per share and revenues of $98.1 million.
This bullish outlook stems from a few reasons. First, analysts note “extended use of multi-channel customer relationship by customers” continues to factor into overall growth. The company’s other products are also gaining traction. Second, the company’s cloud-based content solution Veeva Vault “holds substantial long-term prospects.” Additionally, analysts expect the company’s partnerships with Deloitte, HighPoint, ZS Associates, and Accenture will continue to fuel overall growth for Q3. Of concern to analysts are the company’s competition, foreign exchange fluctuations, and customer concentration.
According to TipRanks’ statistics, out of the 5 analysts who have rated Veeva in the last 3 months, 3 gave a Buy rating while 2 remain on the sidelines. The average 12-month price target for the stock is $28.33, marking a 4% upside from where shares last closed.