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Earnings week ahead: Nvidia poses pivotal test to rally amid sky-high expectations


Earnings week ahead: Nvidia poses pivotal test to rally amid sky-high expectations By

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AuthorDavit KirakosyanStock Markets

Published Feb 18, 2024 10:34

© Reuters. — Here is your Pro preview of the upcoming major earnings reports next week: Nvidia, Walmart, Palo Alto Networks, and Rivian Automotive.


In what has been deemed the market’s greatest test yet this year, NVIDIA (NASDAQ:NVDA) will unveil Q4 earnings on Feb 21, after the market closes.

Analysts predict EPS of $4.63 and revenues of $20.52 billion. The company has surpassed earnings expectations for the past four quarters. Its stock price has increased by 46% since the start of the year, reaching a record high of $746 earlier this week.

On Friday, Loop Capital initiated coverage on Nvidia, assigning a Buy rating and setting a price target of $1,200, marking a new Street high. Despite the rise of new silicon providers, including private entities and major corporations like AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC), and the anticipated introduction of Hyperscale specific internal silicon solutions in the coming years, the analyst believes Nvidia’s biggest customers are expected to take “everything NVDA can give them in 2024 and 2025.”

Another Wall Street firm, Oppenheimer, increased its price target for Nvidia to $850.00 from $650.00 while maintaining an Outperform rating, in anticipation of another earnings outperformance.

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Walmart (NYSE:WMT) is scheduled to release its Q4/24 earnings results on Feb 20, before the market opens. Wall Street analysts expect EPS of $1.65 and revenues of $169.3B.

Earlier this week, BofA Securities reiterated its Buy rating and $190.00 price target on Walmart, noting it sees ‘potential F4Q sales upside’.

Meanwhile, Evercore ISI added Walmart to Its Tactical Underperform list,

We believe Walmart is likely to meet Street estimates for F4Q, but see potential near term downside of around mid single digits for the stock due to what we believe is likely to be conservative guide/tone on the consumer.

Our ProTips – exclusive to InvestingPro users – underline Walmart’s strength, highlighting that the company has raised its dividend for 28 consecutive years, 13 analysts have revised their earnings upwards for the upcoming period, the stock is trading at a low P/E ratio relative to near-term earnings growth, and it generally trades with low price volatility.

Rivian Automotive

Rivian Automotive (NASDAQ:RIVN) is expected to release its Q4/23 earnings on Feb 21, after the market closes. Analysts anticipate an EPS of ($1.32) on revenues of $1.26B.

According to ProTips, Rivian holds more cash than debt on its balance sheet and analysts anticipate sales growth in the current year. However, ProTips also highlights the weak points of the company, such as quickly burning through cash and suffering from weak gross profit margins.

Earlier this week, Barclays downgraded Rivian from Overweight to Equalweight with a price target of $16.00 (from $25.00), noting that the company has a great product, but its technology is not enough to avoid increased signs of demand pressure amid a broader EV slowdown.

Additionally, the bank believes demand softness implies risk from pricing and slower volume growth. As a result, there is a “longer path to breakeven.” Barclays (LON:BARC) also sees an ongoing need for capital raises at Rivian. They said the consequences of weak demand are significant.

Palo Alto Networks

Palo Alto Networks (NASDAQ:PANW) is set to report Q2/24 earnings on Feb 20, after the market closes. Street estimates stand at $1.30 for EPS and $1.97B for revenues.

This week, several Wall Street analysts lifted their price targets on Palo Alto Networks ahead of the announcement.

Jefferies raised the price target on the company to $450.00 from $350.00 while maintaining a Buy rating, noting that Palo Alto is ‘capable of meeting elevated expectations’.

Meanwhile, JPMorgan raised its price target to $380.00 from $326.00 while maintaining an Overweight rating. Wells Fargo increased its price target on Palo Alto Networks to $450.00 from $280.00 while reiterating an Overweight rating.

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Earnings week ahead: Nvidia poses pivotal test to rally amid sky-high expectations

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