Consumer Discretionary

Home Depot Likely to Post ‘Largely in Line’ Q1 Results, Reiterate Outlook, Wedbush Says

/ / Consumer Discretionary /

Home Depot’s (HD) Q1 results on May 14 will likely be “largely in line” with market expectations and the retailer will likely also reaffirm its “conservative” 2024 guidance, Wedbush said in a note to clients on Friday. “While we initially viewed the company’s 2024 guidance as conservative, we now see it as realistic given choppy sales trends partly driven by a delayed spring, increasing mortgage rates and a further-delayed housing recovery,” said Wedbush analysts including Seth Basham. However, the investment firm sees the retailer delivering a quarter-on-quarter improvement in comps to about -2%, which is in line with Wall Street estimates, and would be better than the -3.5% in Q4. Wedbush also sees Home Depot’s Q1 gross margins at 34.2% compared with consensus estimates at 34%, with “the slight upside driven by permanent cost cuts and reductions in product and transportation costs.” “All in, we see slight upside potential to […]

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Walmart Fiscal Q1 Adjusted Earnings Likely to Miss Market Estimates, BofA Says

/ / Consumer Discretionary /

Walmart’s (WMT) fiscal Q1 adjusted earnings and US comparable sales are expected to fall short of market estimates while traffic trends are seen remaining strong, BofA Securities said Friday. The retail giant is scheduled to report fiscal Q1 results Thursday. BofA expects adjusted earnings of $0.51 per share and US same-store sales growth of 3.5%. The market consensus is for $0.52 and 3.7% growth, respectively, according to the firm. “Our F1Q comp forecast implies a slight deceleration vs. F4Q’s +4.0% given moderating grocery inflation and likely continued softness in general merchandise,” BofA analyst Robert Ohmes said. “However, we think strong observed transactions for WMT in F1Q according to Bloomberg Second Measure card data implies continued strong underlying momentum for WMT.” BofA maintained its buy rating on the Walmart stock, with a $67 price objective.

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Home Depot, Lowe’s Likely Face ‘Subdued’ Expectations Heading Into Quarterly Prints, Oppenheimer Says

/ / Consumer Discretionary / ,

Home Depot (HD) and Lowe’s (LOW) likely face “subdued” expectations for their upcoming financial results amid continued macro headwinds for the home improvement retail sector, Oppenheimer said Friday. Home Depot is scheduled to report its fiscal first-quarter results Tuesday, while Lowe’s will report May 21. Oppenheimer expects Home Depot to report earnings of $3.49 a share and a comparable-store sales decline of 3.5%. Wall Street is looking for $3.60 and a 2.2% fall, respectively, the brokerage said in a note. Lowe’s EPS is pegged at $2.94, with comparable-store sales seen dropping 6.5%, versus the Street’s expectations for EPS of $2.95 and comparable sales down 5.7%, according to the note. “Consumer demand trends within home improvement retail remain challenged and are likely to stay sluggish, at least through 2024, owing to ongoing post-pandemic dislocations, weaker underlying confidence, and historically subdued housing activity, aggravated by elevated rates,” Oppenheimer analysts Brian Nagel, William

Home Depot, Lowe’s Likely Face ‘Subdued’ Expectations Heading Into Quarterly Prints, Oppenheimer Says Read Post »

Warner Bros. Discovery Eyes Turnaround With Upcoming Disney+ Bundle and NBA Deal, Analysts Say

/ / Consumer Discretionary /

Keybanc analyst Brandon Nispel upgraded Warner Bros. Discovery Inc (NASDAQ:WBD) from Sector Weight to Overweight and a $11 price target. WBD reported fiscal first-quarter revenue of $9.96 billion, a 6.9% year-on-year decrease, according to Nispel. This was against a consensus of $10.25 billion. The total adjusted EBITDA of $2.10 billion, a 19.5% year-on-year decrease, fell short of the consensus of $2.18 billion. Nispel added that a $200 million content impairment for the Studios segment negatively impacted the results. However, free cash flow (FCF) of $390 million exceeded the consensus of $8.0 million, thanks to a strike that improved working capital and reduced capital spending. Nispel noted that the numbers have likely bottomed out. Regardless, a resolution to the NBA issue is expected to be positive. Direct-to-consumer (DTC) profitability, subscriber growth, and average revenue per user (ARPUs) are all expected to continue improving. According to Nispel, the stock is washed out and likely ready for

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Airbnb Stock Plummets As JPMorgan Analyst Praises ‘Solid Q1, Stable Q2, Acceleration In Q3’

/ / Consumer Discretionary /

Shares of Airbnb Inc (NASDAQ:ABNB) declined by 7.69% to $147.75 in the premarket session on Thursday and continued to tank after the house-rental company reported first-quarter results. The results came amid an exciting earnings season. Here are some key analyst takeaways. JPMorgan analyst Doug Anmuth reiterated a Neutral rating, while raising the price target from $140 to $145. Goldman Sachs analyst Eric Sheridan maintained a Sell rating, while lifting the price target from $123 to $130. BMO Capital Markets analyst Brian Pitz reaffirmed a Market perform rating, while raising the price target from $135 to $151. Piper Sandler analyst Thomas Champion maintained a Neutral rating, while lifting the price target from $145 to $155. Wedbush analyst Scott Devitt reiterated a Neutral rating and price target of $160. JMP Securities analyst Nicholas Jones reaffirmed a Market Perform rating on the stock. KeyBanc analyst Justin Patterson maintained a Sector Weight rating on the stock.

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CFRA Keeps Buy Opinion On Shares Of Airbnb, Inc

/ / Consumer Discretionary /

We cut our 12-month target price to $170 from $188, on an above-peer P/E of 32x our 2025 view. We lift our 2024 EPS view to $4.67 from $4.61 and cut 2025’s to $5.30 from $5.36. ABNB posted Q1 adj. EBITDA of $424M vs. $262M, beating the $326M consensus. Revenue rose 18%, underpinned by a 12% increase in GBV. Top-line strength was driven by a 10% rise in Nights/Experiences booked to $133M, reflecting sustained vigor in travel demand and the favorable timing of Easter. Revenue was further driven by higher take rates and steady supply growth of 17%. Geographically, performance was mixed, with NA and EMEA remaining stable, while Latin America and Asia Pacific exhibited strong bookings growth of 19% and 21%, respectively. Looking ahead, we anticipate a moderation in nights growth across the industry, but expect ABNB to gain market share through new offerings like Icons, Group Trips, and

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Uber on Course for Long-Term Growth Despite Recent Potholes, BofA Securities Says

/ / Consumer Discretionary /

Uber Technologies (UBER) topped Wall Street expectations on most measures when it reported its Q1 results earlier this week and the ride-hailing company is poised to to catch up and eventually surpass many of its peers over the next year and beyond, BofA Securities said Thursday in a research note. Uber took a 6% hit during Wednesday trading after reporting an unexpected Q1 net loss, but the BoA analysts hardly mentioned the earnings miss, instead focusing on metrics like bookings, revenue and free cash flow growth. By those measures, the company was rolling along well, they said, writing Thursday Uber shares are now “attractively valued.” BoA Securities also lowered its price target for Uber shares to $87 from $91 previously to reflect a small discount for the company to the so-called FANG stocks – Facebook (META); Amazon.com (AMZN); Netflix (NFLX) and Google (GOOG, GOOGL) – setting the pace for consumer-oriented

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Airbnb’s Revenue Growth Likely to Accelerate in Second Half, Wedbush Says

/ / Consumer Discretionary /

Airbnb’s (ABNB) revenue growth is likely to accelerate in the second half of this year, though higher marketing expenses are likely to affect profitability, Wedbush said in a note Thursday. The firm said a “modestly higher” marketing expense, which is one of the reasons behind the company’s lower-than-expected EBITDA guidance for Q2, is likely to persist through yearend. Airbnb’s Q2 revenue guidance of $2.68 billion to $2.74 billion is also seen as modestly below analyst estimates and implying slower-than-expected room night growth and slight margin compression, it said. “We think the room night guidance may ultimately prove conservative and note that bookings in [Q2] are likely back-half weighted and build through the quarter into the beginning of the peak summer travel season,” Wedbush said. According to Wedbush, the company is seeing bookings for stays in Q3 outpacing last year, resulting in a backlog that is expected to drive accelerating revenue

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Warner Bros. Discovery Sees Wider-Than-Expected 1Q Loss

/ / Consumer Discretionary /

Warner Bros. Discovery is one of the most mentioned companies in the U.S. across all news items in the past 12 hours, according to Factiva data. Warner Bros. Discovery posted a wider-than-expected first-quarter loss and revenue that fell short of estimates. The company had a loss of $966 million, or 40 cents a share, narrower than the loss of $1.069 billion, or 44 cents a share, posted in the year-earlier period. Revenue fell to $9.958 billion from $10.700 billion. The FactSet consensus was for a loss of 20 cents and revenue of $10.223 billion. Dow Jones & Co. owns Factiva.

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CFRA Keeps Hold Opinion On Warner Bros. Discovery, Inc.

/ / Consumer Discretionary /

We think more work is needed to turn WBD around. We cut our target $0.50 to $8.50 on a forward TEV/EBITDA of 6.1x our ’24 EBITDA estimate of $9.9B, below peers. We lower our ’24 LPS to -$0.75 (-$0.50) and keep our ’25 EPS at $0.15; our respective revenue forecasts are $41.1B (prior $41.6B) and $42.2B ($42.5B). WBD posted a LPS of -$0.40, a wider loss than consensus. WBD will partner with Disney (DIS 105 ***) on a shared Direct to Consumer (DTC) platform for MAX, Disney+, and Hulu to drive revenue sharing, reduce customer churn, and remove middlemen like Roku (ROKU 59 ***) or Apple TV. DTC realized $86M adj. EBITDA and flat revenue Y/Y with advertising +70%, flat distribution, and content -46%. MAX’s domestic unit had 52.7M subs (+700K Q/Q) and ARPU of $11.72 vs. $11.65, while international had 46.9M subs (+1.3M) with ARPU of only $3.75 vs.

CFRA Keeps Hold Opinion On Warner Bros. Discovery, Inc. Read Post »

McDonald’s Makes Digital Funding Shifts

/ / Consumer Discretionary /

McDonald’s is trying to make more uniformity across its system, and says it’s taking a global approach to how its app and other digital systems are funded by franchisees in the U.S. and four other countries next year. U.S. franchisees will pay a percentage of their digital sales for the app and other services, while McDonald’s says it will invest in new digital products and functions, the company says in a message viewed by WSJ. Restaurants increasingly rely on digital sales, as they are more efficient and allow for targeted marketing to consumers.

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Warner Bros. Discovery Q1 2024 GAAP EPS $(0.40) Misses $(0.27) Estimate, Sales $9.958B Miss $10.231B Estimate

/ / Consumer Discretionary /

Warner Bros. Discovery (NASDAQ:WBD) reported quarterly losses of $(0.40) per share which missed the analyst consensus estimate of $(0.27) by 48.15 percent. The company reported quarterly sales of $9.958 billion which missed the analyst consensus estimate of $10.231 billion by 2.67 percent. This is a 6.93 percent decrease over sales of $10.700 billion the same period last year.

Warner Bros. Discovery Q1 2024 GAAP EPS $(0.40) Misses $(0.27) Estimate, Sales $9.958B Miss $10.231B Estimate Read Post »

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