Earnings Previews: APA, Home Depot, Macy’s, Medtronic, Williams

Markets

After markets closed on Thursday, lithium producer Livent reported results that beat on both the top and bottom lines and issued upside revenue guidance for 2022. The report partially salved investors’ disappointment with another lithium miner, Albemarle, that reported results on Wednesday. Livent’s report lifted both stocks Friday morning.

Even though markets are closed on Monday to observe the President’s Day holiday, several companies are scheduled to release results at some point. We have previewed two of them here.

On Tuesday morning, we will hear from a Dow Jones industrial average component and a bellwether department store chain, among others.

APA

Independent oil and gas producer APA Corp. (NYSE: APA) is scheduled to release quarterly results on Monday. Over the past 12 months, the company’s stock price has increased by nearly 76%, with virtually all the growth coming since late September when crude oil prices began their steady climb higher. It will be interesting to see whether APA follows the lead of other independents like Pioneer, Devon and Continental in limiting production increases to no more than 5% and returning more cash to investors, rather than spending more on new capital projects.

Analysts remain bullish on the stock, with 13 of 29 giving the shares a rating of Buy or Strong Buy and 15 more rating the stock a Hold. At the recent price of around $32.00 a share, the upside potential based on a median price target of $36 is about 12.5%. At the high price target of $58, the upside potential is about 81.3%.

For the company’s fourth quarter of fiscal 2021, analysts expect APA to report revenue of $1.94 billion, which would be up 17.7% sequentially and 50% higher year over year. Adjusted earnings per share (EPS) are expected to come in at $1.46, up 49% sequentially and up from a per-share loss of $0.05 year over year. For the full fiscal year, EPS is forecast at $4.13, up from a year-ago loss of $1.08 per share, on sales of $6.95 billion, up 61.4%.

The stock trades at 7.8 times expected 2021 EPS, 5.3 times estimated 2022 earnings of $6.14 and 5.5 times estimated 2023 earnings of $5.93 per share. APA’s 52-week trading range is $15.54 to $36.46. The company pays an annual dividend of $0.14 (yield of 1.54%). Total shareholder return for the past year was 85.4%.

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