Earnings Previews: Alibaba, Baidu, Dollar Tree, Macy’s
The three major U.S. equity indexes closed higher on Monday, with the Dow Jones industrials and the S&P 500 up nearly 2%, while the Nasdaq was up 1.6%. Financial sector stocks rose 3.3% after JPMorgan lifted its outlook on net interest income. All 11 sectors closed higher, with consumer staples (the traditional defensive play when markets are lousy) up more than 2%. Shortly after Tuesday’s opening bell, all three indexes were lower, with the Nasdaq down more than 2%.
After markets closed on Monday, Zoom Video reported a solid beat on first-quarter earnings and an in-line number for revenue. Zoom also raised guidance. Shares traded down fractionally in Tuesday’s early action.
Before markets opened on Tuesday, Abercrombie & Fitch missed analysts’ profit estimate and beat the estimate for quarterly revenue. Downside guidance for the current quarter and the fiscal year had knocked the stock down nearly 27% Tuesday morning.
Best Buy beat the earnings estimate by a penny and also beat on revenue. It lowered fiscal year guidance as well. Shares traded up by about 3.1%.
Frontline reported an in-line loss per share and hammered revenue estimates. The stock traded up about 2.7%.
NetEase beat estimates on both the top and bottom lines. The stock traded down by about 1.8%.
Petco also beat estimates on the top and bottom lines and confirmed previous guidance. Shares traded down nearly 4% early Tuesday.
After markets close on Tuesday, Dick’s Sporting Goods, Intuit and Toll Brothers will report quarterly earnings, along with Grindrod, Nordstrom and Star Bulk Carriers. After Wednesday’s closing bell, results are due from Nvidia, Snowflake and Splunk.
Here is a look at four firms set to report earnings first thing Thursday morning.
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Over the past 12 months, shares of Alibaba Group Holding Ltd. (NYSE: BABA) have lost about 60% of their value. Tighter Chinese government regulation and heavier U.S. pressure for Chinese firms to comply with independent audit requirements in order to remain listed on U.S. exchanges have posed strong headwinds for Alibaba and its shareholders.
There are 43 analysts covering the company, and 37 of them have ratings of Buy or Strong Buy. The other six rate the stock at Hold. At a recent share price of around $83.60, the upside potential based on a median price target of $156.02 is about 86%. At the high price target of $264.10, the upside potential is 216%. The company’s median price target is down about $25.00 from its level three months ago, and the high target is down more than $40.
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