Applied Materials 2Q Revenue Ticks Up, Surprising Wall Street

/ / Technology /

Applied Materials posted slightly higher revenue in the fiscal second quarter and forecast another rise on the top line in the current period, a positive sign for a recently down semiconductor market. The Santa Clara, Calif.-based semiconductor equipment company reported a profit of $1.72 billion, or $2.06 a share, in the quarter that ended April 28, compared with a profit of $1.58 billion, or $1.86 a share, a year earlier. Analysts polled by FactSet expected a per-share profit of $2. Stripping out certain one-time items, the company posted an adjusted profit of $2.09 a share, greater than the $1.99 expected by analysts surveyed by FactSet. Revenue rose from a year earlier to $6.65 billion, beating the $6.54 billion expected by analysts polled by FactSet, which would have represented a slight drop from a year earlier. A year-on-year drop in revenue from its semiconductor systems segment was offset by higher revenue […]

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Walmart Continues to Benefit From Upper-Income Households, But Average Ticket Flat

/ / Consumer Discretionary /

Walmart’s share gains continued to be mainly driven by upper-income households in the 1Q, the retail giant says. U.S. comparable stores sales excluding fuel rose 3.8% in the period. Still, its average ticket remained flat. Overall in the quarter, Walmart saw strength across all operating segments, with global ecommerce sales growing 21% as a result of its in store-fulfilled pickup and delivery. Shares rise 5.5% to $63.14 in premarket trading.

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Walmart Lifts Fiscal 2025 Outlook Following First-Quarter Beat

/ / Consumer Discretionary /

Walmart (WMT) on Thursday recorded better-than-expected fiscal first-quarter results buoyed by gains across all operating segments, prompting the retail giant to raise its full-year guidance. The company now anticipates to be at the high end or “slightly” above its original fiscal 2025 outlook for per-share adjusted earnings and sales growth. In February, Walmart issued a forecast for adjusted EPS to be between $2.23 and $2.37, with sales to increase by 3% to 4% at constant currency. The consensus on Capital IQ is for normalized EPS of $2.37 and revenue of $670.35 billion for the fiscal year. “We’ll revisit our full-year guidance as we exit (the second quarter),” Chief Financial Officer Rainey said on an earnings call, according to a Capital IQ transcript. “This is more aligned with our historic cadence of updates and consistent with the philosophy we have as a management team to recognize early momentum, but to also

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ConocoPhillips’ Diverse Asset Base Offer Flexibility on Managing Commodity Volatility, RBC Says

/ / Energy /

ConocoPhillips’ (COP) “large and diverse asset base” offers flexibility in managing commodity price volatility, RBC Capital Markets said in a report emailed Wednesday. The investment firm raised the company’s price target to $140 from $135 and maintained the outperform rating. RBC recently added the company to its Global Top Energy list due to its “extensive, high-quality, and geographically diverse inventory that surpasses” rivals in exploration and production, according to the report. ConocoPhillips’ “robust balance sheet grants a competitive edge in enhancing shareholder value throughout various commodity price cycles,” the report said. ConocoPhillips may deliver free cash flow of $10.1 billion in 2024 and $10.7 billion in 2025 representing 7% and 8% yields, “which are slightly below large cap peers,” RBC said. The company “does not hedge commodity prices, but its large diversity of production in terms of product and locations offers natural hedges” to counter price volatility, the report said.

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Home Depot to Continue Share Gains Amid Choppy Macro Conditions, BofA Securities Says

/ / Consumer Discretionary /

Home Depot (HD) is set for continued share gains amid choppy macro conditions and expected pressure in 2024 following its Q1 results, BofA Securities said in a note. “While the macro remains choppy, and we expect continued pressure in 2024 on discretionary and big ticket, we expect HD to see continued share gains as it accelerates growth and capabilities with the complex pro, both organically and inorganically,” BofA analyst Robert Ohmes said. On Tuesday, the company reported better-than-expected Q1 EPS, supported by lower tax, while delayed spring & large project softness weighed on comparable sales. The analyst said he expects the company’s strong exposure to pro customers, on-shelf availability improvements, value proposition, and strategic investments to support its comparative sales. BofA raised its full-year estimate for Home Depot earnings per share to $15.15, from $15.10 previously, expecting higher interest income to offset the recent pause in share buybacks. BofA reiterated

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Salesforce Set to Exceed Q1 Estimates as Partners Report Healthy Deal Activity, BofA Says

/ / Technology /

Salesforce (CRM) is expected to beat estimates for Q1 as feedback from its partners suggested that deal activity remained healthy, BofA Securities said in a note Wednesday. The firm said it expects Salesforce to report a 1 percentage point upside to its current remaining performance obligation, or cRPO, growth estimate of 12% and “some upside” to its earnings estimate of $2.37 per share for Q1. The company is scheduled to report its Q1 financial results on May 29. The company’s solid pipeline builds confidence in potential growth and supports cRPO growth outlook for Q2, BofA added. “We expect management to flow through Q1 upside to the outlook for [fiscal year] 2025 subscription growth and margin of above 10% [constant currency] and 32.5%,” according to the note. The firm said the company was meeting its partners’ expectations overall with a higher mix indicating better than expected results. Strong performance was noted

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Will Home Depot Continue To Weather Macro Challenges? ‘Continued Softness In Discretionary Projects,’ But ‘Compelling Recovery Opportunity’ Say Analysts

/ / Consumer Discretionary /

Home Depot Inc (NYSE:HD) shares were climbing in early trading on Wednesday, despite the company reporting disappointing first-quarter sales. The results came amid an exciting earnings season. Here are some key analyst takeaways. Truist Securities On Home Depot Analyst Scot Ciccarelli reiterated a Buy rating while cutting the price target from $417 to $406. Home Depot reported its first-quarter results broadly in line with expectations, with comps down 2.8%, Ciccarelli said. While the company was tracking short of expectations for most of the quarter, “trends improved as Spring weather arrived later in April,” he added. Comps for Complex Pros were positive “in markets where it has invested in its supply chain and outside sales force,” the analyst wrote. He further stated that pricing pressures could ease through the year and “should be an incremental driver to comp performance” in the back half of the year. BofA Securities On Home Depot Analyst Robert Ohmes maintained a

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Dell Technologies AI Server Momentum Quickens, Boosting Outlook in 2025, 2026, Morgan Stanley Says

/ / Technology /

Dell Technologies (DELL) remains “the best way to play” prospects for artificial-server momentum, storage demand and an improving personal-computer market, boosting prospects for fiscal 2025 and 2026, Morgan Stanley said Wednesday in a report. Morgan Stanley raised its price target on Dell to $152 from $128 and maintained an overweight rating on the stock. Dell shares jumped 9.5% in recent trading Wednesday. Customer and supply chain checks in the past month show Dell gaining momentum “in enterprise infrastructure, including competitive AI server wins and inflecting storage strength,” the report said. The trend suggests Dell’s “strongest forward spending intentions” in more than six years, Morgan Stanley said. Recent checks also indicate that component vendors and partners are aiming for the higher end of the estimate for AI server builds in 2024, potentially reaching 60,000 for Dell, the report said. “All in, we are hearing about more AI server momentum” at Dell

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Nvidia Set for Robust Q1 Revenue Fueled by Reduced Lead Times, UBS Says

/ / Technology /

Nvidia (NVDA) is poised for a strong Q1 revenue, likely reaching $26 billion, owing to reduced lead times on chips, UBS Securities said in a note emailed Wednesday. The mid-December initial shipment timing for the Blackwell processors has some investors concerned about the transition, UBS said. The launch of Blackwell chips is expected to drive even stronger demand for next-generation GB200 rack system for data centers, leading to increased revenue and EPS forecasts for next year, the note said. But these concerns are likely overstated, the firm said, and recent talks with customers and supply chain assessments suggest strong demand for its graphics processing unit microarchitecture “Hopper” that will persist throughout the year. Despite the sell side lagging in projections for 2025, UBS believes most investors expect EPS in the high-$30s, below its estimates following recent checks. With this demand outlook, “we would expect and hope to see another substantial

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Amazon Prime Video Should Continue Growth but Financial Results Will Take Time, Oppenheimer Says

/ / Consumer Discretionary /

Amazon.com (AMZN) continues to be one of the few large-cap companies thriving from the public’s shift to ecommerce, with the company succeeding on multiple fronts, including its Prime Video unit, Oppenheimer said in a note emailed Wednesday. Following the launch last year of an ad-supported tier for Prime Video, Amazon this week hosted an Upfront presentation for the first time to attract advertisers to its movie and TV content. The event had plenty of “star power ” to get advertisers’ attention – including projects led by Jake Gyllenhaal, Will Ferrell and Reese Witherspoon – although the Oppenheimer analysts said the Upfronts traditionally have focused on selling ad space for TV series rather than movies. Oppenheimer also said that bringing on top-shelf talent for its movies and television shows is expensive and that spending will likely pay off with increased viewership. Sports similarly will attract viewers over time as Prime secures

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Cisco Systems Fiscal Q3 Non-GAAP EPS, Revenue Fall; 2024 Guidance Revised — Shares Up After Hours

/ / Telecommunications /

Cisco Systems (CSCO) reported fiscal Q3 non-GAAP earnings late Wednesday of $0.88 per diluted share, down from $1.00 a year earlier. Analysts polled by Capital IQ expected $0.82. Revenue for the quarter ended April 27 was $12.70 billion, down from $14.57 billion a year earlier. Analysts surveyed by Capital IQ expected $12.63 billion. The company expects fiscal Q4 non-GAAP EPS between $0.84 and $0.86 and revenue ranging from $13.4 billion to $13.6 billion. Analysts polled by Capital IQ expect $0.84 and $13.54 billion, respectively. The company now expects fiscal 2024 non-GAAP EPS of $3.69 to $3.71 and revenue between $53.6 billion and $53.8 billion. The previous guidance was for non-GAAP EPS between $3.68 to $3.74 and revenue between $51.5 billion and $52.5 billion. Analysts surveyed by Capital IQ expect $3.64 and $53.54 billion. The company maintained its quarterly dividend at $0.40 per share, payable July 24 to stockholders of record

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