Earnings to Watch Next Week: Coca-Cola, United Airlines, NetFlix and SVB Financial in FocusFollowing is a list of company earnings scheduled for release April 19-23, along with earnings previews for select companies. Next week’s earnings are of much significance for major market movements as Q1 is believed to be a quarter of significant recovery, with growth accelerating and the outlook for the coming periods gradually improving.
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COCA-COLA: The world’s largest soft drink manufacturer is expected to report its first-quarter earnings of $0.50 per share, which represents a year-over-year decline of about 2% from $0.51 per share seen in the same quarter a year ago.
The company’s revenue growth to be flat at $8.6 billion. However, in the last two years, on average, Coca-Cola has beaten revenue estimates over 70% and earnings estimates of nearly 90%.
“Coca-Cola, which has still not seen a full recovery to its pre-COVID-19 level, may be a decent investment opportunity at the moment. The stock traded around $60 pre-COVID in February 2020 and is 11% below that level. However, the stock has gained 40% since its March lows of $37, following the Fed’s stimulus package and measures announced by other economies. The gradual lifting of lockdowns and successful vaccine rollout has further enthused markets in anticipation of faster economic recovery,” noted analysts at TREFIS.
“However, the stock is unlikely to surpass its pre-Covid level anytime soon, as most of its business depends on demand from people going to entertainment venues, sporting events, etc. These locations are not yet fully operational in most parts of the world. With the recent spike in Covid cases, there are some forms of lockdowns imposed again in certain economies, thus slowing the recovery in demand. Therefore, in the absence of another complete lockdown (as was seen in 2020) and implementation of the vaccination program the stock is likely to rise, but full recovery to February 2020 levels looks unlikely in the near term. KO stock has a potential upside of about 10%.”
UNITED AIRLINES: One of the largest airlines in the world is expected to report a loss for the fifth consecutive time of $6.91 in the first quarter of 2021 on April 19 as the aviation service provider continues to be negatively impacted by the ongoing COVID-19 pandemic and renewed travel restrictions.
That would represent a year-over-year decline of over 168% from -$2.57 per share seen in the same quarter a year ago. The Chicago-based airline’s revenue would decline about 60% to around $3.3 billion.
“Most of the US airlines will report 1Q21 earnings the week of April 19 and 26. We expect the focus to be on higher fuel costs, the nascent traffic recovery, and improving the balance sheet. Our focus remains on domestic leisure airlines while watching borders reopening to determine recovery for international traffic. We also expect airlines to talk about repairing their balance sheet,” said Helane Becker, equity analyst at Cowen and Company.
|ONB||Old National Bancorp||$0.41|
|UAL||United Airlines Holdings||-$6.98|
|PNFP||Pinnacle Financial Partners||$1.43|
|ACC||American Campus Communities||$0.15|
|HDS||HD Supply Holdings||$0.39|
|EIDX||Eidos Therapeutics Inc||-$0.80|
|CDNS||Cadence Design Systems||$0.74|
Tuesday (April 20)
IN THE SPOTLIGHT: NETFLIX
The California-based global internet entertainment service company is expected to report its first-quarter earnings of $2.97 per share, which represents year-over-year growth of over 90% from $1.57 per share seen in the same quarter a year ago. The streaming video pioneer would post revenue growth of over 23% to around $7.15 billion.
“We expect paid net adds to be in line with guide, helped in part by ongoing COVID shutdowns in some markets. Our view is supported by our positive 1Q survey data, which implies NFLX continues to lead living room TV apps. We also view the 45% of survey respondents who share passwords as a LT opp’ty for incremental subs. Reiterate Outperform & $675 Price Target,” noted John Blackledge, equity analyst at Cowen and Company.
|ABF||Associated British Foods||£17.31|
|JNJ||Johnson & Johnson||$2.33|
|PG||Procter & Gamble||$1.19|
|PM||Philip Morris International||$1.40|
|FITB||Fifth Third Bancorp||$0.69|
|EDU||New Oriental Education Tech||$0.06|
|SFNC||Simmons First National||$0.52|
|HWC||Hancock Whitney Corp||$0.97|
|UCBI||United Community Banks||$0.64|
|FMBI||First Midwest Bancorp||$0.37|
|ELS||Equity Lifestyle Properties||$0.35|
|BECN||Beacon Roofing Supply||$0.08|
Wednesday (April 21)
IN THE SPOTLIGHT: SIGNATURE BANK
The New York-based full-service commercial bank is expected to report its first-quarter earnings of $2.85 per share, which represents year-over-year growth of over 50% from $1.88 per share seen in the same quarter a year ago. The bank would post revenue growth of about 18% to around $428 million.
“SBNY has a unique business model, with its single-point-of-contact bankers, excellent credit culture, and a highly efficient operating structure. Its loan growth continues to outpace peers, given its relatively new focus on growing its PE/VC capital call lending business, while strategically de-emphasizing its NYC MF portfolio,” Ken Zerbe, equity analyst at Morgan Stanley.
“While we do expect losses in SBNY’s CRE portfolio, we believe the market is overly discounting this in the stock price, particularly given its strong underwriting history and conservative lending.”
|RCI||Rogers Communications USA||$0.53|
|BKR||Baker Hughes Co||$0.11|
|FHN||First Horizon National||$0.35|
|NEP||Nextera Energy Partners||$0.33|
|CP||Canadian Pacific Railway USA||$4.35|
|CMG||Chipotle Mexican Grill||$4.89|
|DFS||Discover Financial Services||$2.81|
|GL||Globe Life Inc||$1.63|
|REXR||Rexford Industrial Realty||$0.06|
|FR||First Industrial Realty||$0.24|
|SLG||SL Green Realty||-$0.14|
|UFPI||Universal Forest Products||$0.87|
|TCBI||Texas Capital Bancshares||$1.09|
|SNBR||Scs Group Plc||$1.85|
|CNS||Cohen & Steers||$0.76|
|CCI||Crown Castle International||$0.53|
|RHI||Robert Half International||$0.80|
|LVS||Las Vegas Sands||-$0.27|
Thursday (April 22)
IN THE SPOTLIGHT: SVB FINANCIAL
The parent of Silicon Valley Bank is expected to report its first-quarter earnings of $6.47 per share, which represents year-over-year growth of about 153% from $2.55 per share seen in the same quarter a year ago.
In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 45%. The Santa Clara, California-based company would post revenue growth of over 50% to about $1.24 billion.
“SIVB is one of the fastest-growing banks in our coverage universe, with an average of 20%+ loan and deposit growth annually since 2010, with the growth driven by its unique niche of lending to the technology and life sciences industries, including PE and VC capital call lines. While we expect growth to slow, we still see low-teens loan growth (well above peers) for the next several years,” noted Ken Zerbe, equity analyst at Morgan Stanley.
“We are Equal-weight the shares due to valuation. SIVB is trading at just over 20x forward earnings and more than 10 P/E points above its peers (versus a 4-6x multiple premium that we believe it deserves). SIVB‘s earnings are highly sensitive to changes in Fed funds. Rate increases would drive higher EPS.”
|PNR||Pentair Ordinary Share||$0.61|
|SASR||Sandy Spring Bancorp||$1.02|
|ORI||Old Republic International||$0.46|
|FAF||First American Financial||$1.31|
|RS||Reliance Steel & Aluminum||$3.55|
|TPH||Tri Pointe Homes||$0.47|
|AEP||American Electric Power||$1.18|
|EWBC||East West Bancorp||$1.25|
|CLF||Cliffs Natural Resources||$0.35|
|IQV||IQVIA Holdings Inc||$1.85|
|ODFL||Old Dominion Freight Line||$1.58|
|FFBC||First Financial Bancorp||$0.47|
|WWE||World Wrestling Entertainment||$0.20|
|ARI||Apollo Commercial Real Est Finance||$0.33|
|SBCF||Seacoast Banking Of Florida||$0.48|
|ADS||Alliance Data Systems||$3.21|
|PBCT||People’s United Financial||$0.34|
|WST||West Pharmaceutical Services||$1.42|
|FFIN||First Financial Bankshares||$0.37|
|SAFE||3 Sixty Risk||$0.33|
|ASR||Grupo Aeroportuario Del Sureste||$23.55|
Friday (April 23)