In this article, we will take a look at the 10 most awaited earnings to watch in August.
We are more than halfway through the second-quarter earnings season. However, several famous stocks, including Alibaba Group Holding Limited (NYSE:BABA), PayPal Holdings, Inc. (NASDAQ:PYPL) and Advanced Micro Devices, Inc. (NASDAQ:AMD), have yet to report their financial results.
In addition, entertainment giant The Walt Disney Company (NYSE:DIS) and financial software provider Intuit Inc. (NASDAQ:INTU) will also post their earnings in the coming weeks. We will discuss analysts’ expectations for these companies in the remaining article.
10. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 53
Eli Lilly and Company (NYSE:LLY) has performed well in recent months. Despite macro-economic headwinds, its share price has improved more than 20 percent so far in 2022. The stock is currently trading around $330, which is impressive considering its trading price of about $245 around the same time in 2021.
The Indiana-based pharmaceutical giant plans to release its financial results for the second quarter on August 4, 2022. Analysts expect Eli Lilly and Company (NYSE:LLY) to report earnings of $1.69 per share on revenue of $6.7 billion.
Earlier this year, asset management firm Baron Funds also talked about Eli Lilly and Company (NYSE:LLY) in its first-quarter 2022 investor letter, stating:
“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company with a diverse offering primarily focused on therapeutics. Performance was strong mostly due to consistent financial growth powered by its core diabetes (and future obesity) franchise, as well as the constant drumbeat surrounding the Alzheimer’s therapeutic market, of which Eli Lilly has one of the three potential winning blockbuster candidates in Donanemab. We retain conviction in Eli Lilly given the company’s strong long-term growth outlook.”
9. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 60
Walmart Inc. (NYSE:WMT) is next on the list of 10 most awaited earnings to watch in August. The retail giant will release its second-quarter results on August 16, 2022. Industry experts expect the inflationary pressure to weigh on the upcoming results.
Meanwhile, Walmart Inc. (NYSE:WMT) recently slashed its profit outlook for the second quarter. The company now expects its Q2 adjusted EPS to drop in the range of 8 – 9 percent. Previously, it was expecting adjusted EPS to be flat or marginally up.
Walmart Inc. (NYSE:WMT) blamed elevated inflation levels for the revised guidance. According to the company, shoppers have increased their spending on daily essentials such as food while cutting back on non-essential items.
Separately, Deutsche Bank analyst Krisztina Katai cut her price target for Walmart Inc. (NYSE:WMT) from $166 per share to $142 per share last week, following the updated outlook of the company.
8. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 66
Cisco Systems, Inc. (NASDAQ:CSCO) plans to announce financial results for its fiscal fourth quarter on August 17, 2022. The networking company is expected to earn 82 cents per share on revenue of $12.75 billion.
For the prior quarter, Cisco Systems, Inc. (NASDAQ:CSCO) had reported adjusted earnings of 87 cents per share, slightly higher than the consensus of 86 cents. However, its quarterly revenue of $12.84 billion missed the expectations of $13.34 billion.
Meanwhile, JPMorgan analyst Samik Chatterjee downgraded Cisco Systems, Inc. (NASDAQ:CSCO) from “Overweight” to “Neutral” last month. Chatterjee thinks that macroeconomic challenges and a drop in enterprise spending would likely hurt the growth of networking and hardware stocks.
7. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 72
CVS Health Corporation (NYSE:CVS) is one of the leading healthcare companies in the world. It is best known for its pharmacy business and health insurance plans. The company is set to report its second-quarter results on August 3, 2022.
Analysts are expecting CVS Health Corporation (NYSE:CVS) to post earnings of $2.17 per share on revenue of $76.37 billion. This compares to adjusted earnings of $2.22 per share on revenue of $76.83 billion reported by CVS for the prior quarter.
CVS Health Corporation (NYSE:CVS) has struggled to gain value so far in 2022, primarily due to fading demand for coronavirus testing and vaccinations. CVS shares are down nearly 8 percent on a year-to-date basis. That’s disappointing considering a jump of more than 50 percent in CVS share price in 2021.
Like CVS Health Corporation (NYSE:CVS), analysts are also keeping an eye on Alibaba Group Holding Limited (NYSE:BABA), PayPal Holdings, Inc. (NASDAQ:PYPL) and Advanced Micro Devices, Inc. (NASDAQ:AMD), ahead of their earnings.
6. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 75
The Home Depot, Inc. (NYSE:HD) plans to post its financial results for the second quarter on August 16, 2022. Analysts are calling for earnings of $4.94 per share on revenue of $43.32 billion for the quarter.
Industry experts have mixed opinions about The Home Depot, Inc. (NYSE:HD). Some expect the inflationary pressure and fading homebuilder sentiment to weigh on the results, while others believe the demand for Home Depot’s products might not decelerate as many predict.
The Home Depot, Inc. (NYSE:HD) also appeared in the first-quarter 2022 investor letter of investment management firm Diamond Hill Capital. Here’s what the firm said:
“Home Depot shares underperformed as continued solid fundamental results were outweighed by concerns about the impact rising mortgage rates may have on the housing market and general inflationary pressures potentially leading to a consumer spending slowdown. We view the long-term prospects and multi-year fundamental outlook as unchanged.”
5. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 82
Intuit Inc. (NASDAQ:INTU) is famous for its financial management and tax return applications. QuickBooks, TurboTax and Credit Karma are among its flagship software products.
The California-based company plans to release its fiscal fourth-quarter results after the market closes on August 23, 2022. Analysts expect Intuit Inc. (NASDAQ:INTU) to report earnings of $1.03 per share on revenue of $2.35 billion.
In its previous quarterly report, Intuit Inc. (NASDAQ:INTU) reported adjusted earnings of $7.65 per share on revenue of $5.63 billion, beating the consensus of $7.54 per share and $5.51 billion, respectively.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 83
Advanced Micro Devices, Inc. (NASDAQ:AMD) will announce its second-quarter earnings after the closing bell on Tuesday, August 2, 2022. The semiconductor giant is expected to earn $1.03 per share on revenue of $6.53 billion.
Meanwhile, Advanced Micro Devices, Inc. (NASDAQ:AMD) surpassed its biggest rival, Intel, in terms of market capitalization on Friday, July 29, 2022. AMD’s market cap is now hovering around $153 billion, compared to Intel’s market value of approx. $149 billion.
Advanced Micro Devices, Inc. (NASDAQ:AMD) has given tough competition to Intel in recent years. AMD chips have outperformed Intel chips in performance and efficiency. That’s also a key reason behind Intel losing market share in the global chip market against AMD.
3. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 100
Alibaba Group Holding Limited (NYSE:BABA) will announce its fiscal first-quarter results before the opening bell on Thursday, August 4, 2022. However, Alibaba stock has been losing value ahead of its earnings.
The stock plummeted over 11 percent on Friday, July 29, 2022, as analysts expect the Chinese e-commerce giant’s profit and sales to drop on a year-over-year basis. Alibaba Group Holding Limited (NYSE:BABA) is expected to earn $1.52 per share on revenue of $30.05 billion. That’s down from earnings of $2.57 per share on revenue of $32.37 billion reported by Alibaba Group Holding Limited (NYSE:BABA) for the comparable period of 2021.
Separately, investment management firm Artisan Partners mentioned Alibaba Group Holding Limited (NYSE:BABA) in its second-quarter 2022 investor letter, stating:
“Alibaba rose 4% during the quarter. We would love to say the share price performance was due to strong operational performance. Unfortunately, that was not the case. The most recent earnings results showed its core e-business still had not returned to growth, primarily due to the difficult retail environment caused by the government’s zero-COVID policy. Alibaba also appears to be losing market share due to its product mix tilted toward apparel and cosmetics, categories currently stalled in this environment. The share price performance this quarter was largely a function of exogenous items—specifically, government actions in the form of stimulus to support the economy and less regulations.
Despite the poor recent results, Alibaba remains a powerful economic engine. It is a global leader in e-commerce and cloud computing, both of which should grow nicely over time. Management has started taking actions to improve profitability, which has been burdened by significant investment in loss-making business ventures. The financial results should improve significantly when China’s economy starts to recover from COVID-19 outbreaks. The shares are incredibly cheap and have some of the highest upside potential in the portfolio. Even embedding significant losses from new ventures, we estimate they are trading at 11X-12X unlevered earnings. In our view, the shares could double, and they still would not be expensive.”
2. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 100
PayPal Holdings, Inc. (NASDAQ:PYPL) operates an online payment system that allows users around the world to send and receive payments. The fintech giant plans to release its second-quarter results on Tuesday, August 2, 2022.
Analysts expect PayPal Holdings, Inc. (NASDAQ:PYPL) to report earnings of 86 cents per share on revenue of $6.7 billion. Meanwhile, PayPal stock is down about 55 percent on a year-to-date basis. Let’s see if a potential earnings beat could lift the company’s share price in the coming days.
PayPal Holdings, Inc. (NASDAQ:PYPL) also appeared in the second-quarter 2022 investor letter of investment management firm Wedgewood Partners. Here’s what the firm said:
“PayPal Holdings detracted from performance despite the Company generating healthy growth. Revenue grew +8%, but closer to +15% when adjusted for the well-telegraphed roll-off of its eBay relationship. As the Company laps the headwinds of eBay and difficult year ago comparisons, we expect PayPal should drive long-term growth in the mid-teens. Much of this will be driven by further penetration into the Company’s nearly 450 million active users. PayPal’s user base has grown by +50% since the onset of the pandemic so it makes sense for management to focus on driving higher transactions per account and better monetize this historical windfall of users. In our opinion, the shares have discounted away all of PayPal’s pandemic user and revenue gains, so we added to positions during the quarter.”
1. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 113
The Walt Disney Company (NYSE:DIS) is scheduled to announce the financial results for its fiscal third quarter on Wednesday, August 10, 2022. Analysts are calling for earnings of 94 cents per share on revenue of $21.38 billion.
Meanwhile, some research firms recently trimmed their price target for The Walt Disney Company (NYSE:DIS) ahead of its earnings. Truist cut its price target for the entertainment giant from $135 per share to $125 per share on Tuesday, July 26, 2022. Moreover, Goldman Sachs also lowered its price target for The Walt Disney Company (NYSE:DIS) from $148 per share to $130 per share last week.
Separately, investment management firm Oakmark Funds talked about The Walt Disney Company (NYSE:DIS) in its second-quarter 2022 investor letter, stating:
“Disney (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade prior to the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.”
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Disclosure: None. 10 Most Awaited Earnings to Watch in August is originally published on Insider Monkey.
