Fourth-quarter earnings reports continue to come in with mixed results. Overall, companies listed on the S&P 500 index have, so far, reported a 30.3% annual growth rate in earnings per share (EPS) for the fourth quarter of 2021 — marking the fourth-consecutive year-over-year (YOY) reading of 30% or higher.
However, there are clouds forming on the horizon. For Q4, S&P 500 listed companies have issued negative earnings guidance (looking ahead) at the highest level in a decade. High inflation, looming interest rate increases, wage pressures and persistent supply chain bottlenecks are conspiring to dampen sentiment.
Yet, amidst the gloom, many companies continue to outperform and issue earnings and guidance that are better than Wall Street had forecast. Over the next week, we’ll get earnings reports from a number of household names, including big box retailers, pharmaceutical companies and leading technology concerns. With that in mind, here are seven stocks with earnings reports next week that investors should keep an eye on.
- Home Depot (NYSE:HD)
- eBay (NASDAQ:EBAY)
- Alibaba (NYSE:BABA)
- Block (NYSE:SQ)
- Moderna (NASDAQ:MRNA)
- Coinbase (NASDAQ:COIN)
- Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B)
Now, let’s dive in and take a closer look at each one.
Earnings Reports Next Week: Home Depot (HD)
How is the home building market holding up? Are homeowners still upgrading and improving their domiciles? We’ll get an idea when Atlanta, Georgia-based Home Depot reports its fourth-quarter results on Feb. 22.
Analysts are expecting the big-box retailer to report EPS of $3.17 on revenue of $34.85 billion. Key to the company’s success will be if consumer spending on home upgrades has held up in the face of the biggest spike in inflation in 40 years.
Moreover, HD stock is down more than 16% year-to-date (YTD) amid widespread market volatility. However, even with that decline, Home Depot’s share price is up 25% over the past 12 months. The company, and its share price, have benefitted from strong consumer spending throughout the pandemic. For the previous third quarter, Home Depot reported sales growth of about 10%. That was impressive as it came on top of 23% sales growth in the third quarter of 2020.
Additionally, remote work trends and higher home prices have fueled Home Depot’s results. But will it continue?
The share price of e-commerce giant eBay is also down 16% so far in 2022 to $55.60. The company’s stock has taken a hit as investors reposition their portfolios to move away from technology names and into value and cyclical securities. eBay is also widely viewed as a company that benefitted when stay-at-home orders were in place and shopping malls closed at the height of the novel coronavirus pandemic. However, with economies now reopening, eBay’s growth is expected to slow.
Case in point, from Q2 2020 to Q1 2021, eBay’s total active buyers increased from 182 million to 187 million. However, they have since fallen back to 154 million total active buyers in Q3 2021. Any further erosion of this key metric in the Q4 numbers released on Feb. 23, and EBAY stock is likely to fall further. Also, Wall Street is looking for eBay to report Q4 EPS of $1 on revenue of $2.61 billion.
Additionally, it will be interesting to see how inflation is impacting pricing on eBay’s platform, which sells everything from toasters to baseball cards.
Earnings Reports Next Week: Alibaba (BABA)
How is embattled Chinese e-commerce juggernaut Alibaba holding up? China’s answer to Amazon (NASDAQ:AMZN) has been relatively quiet in recent months after experiencing a public drubbing throughout most of 2021. The company founded and run by Jack Ma was targeted by Chinese authorities and regulators as part of their broad and brutal crackdown on publicly-traded companies. In turn, Alibaba was hit with a record antitrust fine and had its planned initial public offering (IPO) of Ant Group canceled.
The crackdown has hurt Alibaba’s finances and its stock. The share price of BABA stock is down 56% over the past year to now trade at $119.60. While hard to bear for shareholders, there is cautious optimism that the stock may have bottomed and is beginning to heal as Chinese authorities start to back off.
YTD, Alibaba stock is basically flat, and seems to have hit a trough of $110.06 in late January. Thus, better-than-expected fourth quarter earnings could go along way to giving BABA stock a boost.
With that in mind, analysts anticipate that Alibaba will report EPS of $2.55 on revenue of $38.84 billion when the company issues its Q4 print on Feb. 24.
Speaking of badly beaten down stocks, the company formerly known as Square could use some good news.
It’s been a house of pain for shareholders ever since the fintech and digital payments company announced that it is rebranding to now be called “Block,” reflecting its growing focus on cryptocurrencies and the blockchain technology that underpins digital coins and tokens. In the past six months, SQ stock has fallen 62%, including a YTD decline of 39%, and now changes hands at under $100 per share. Last August, the share price was at a 52-week high of $289.23.
Moreover, analysts and shareholders will be watching to see how much Bitcoin (BTC-USD) and other cryptocurrency assets the company had on its books at the end of 2021, as well as how the volatility in cryptocurrencies has impacted Block’s finances. Also, news from company founder Jack Dorsey that Block plans to go all-in on cryptocurrencies and is developing an open-source Bitcoin mining system has largely overshadowed the company’s bread-and-butter Cash App that enables people to transfer money using a mobile phone app and is popular among small businesses and the self-employed.
Overall, for Q4, Wall Street expects Block to report EPS of 23 cents on revenue of $4.04 billion.
Earnings Reports Next Week: Moderna (MRNA)
Can Moderna get its mojo back? The best performing stock in the S&P 500 index during the first half of 2021, the once high-flying Covid-19 vaccine maker has come back down to Earth in recent months as vaccination levels plateau, the Omicron variant dissipates and governments around the world loosen their vaccine requirements.
Moderna chief executive officer Stephane Bancel made headlines around the world earlier this month when he said that we’re likely approaching the final stages of the pandemic. That’s good news for humanity, but bad news for vaccine manufacturers.
In turn, MRNA stock has been taking it on the chin as expectations that global sales of its Covid-19 vaccine will slow throughout this year. YTD, Moderna’s share price is down 42% to $147.90. And in the past six months, the stock has come down 63%. Nonetheless, Moderna is at a particular disadvantage with its Covid-19 vaccine as it is the first and only product that the Boston-based company has had approved by the U.S. Food and Drug Administration (FDA). Moreover, coming out of the pandemic, Moderna will have to turn to its pipeline of cancer and HIV drug candidates.
So, with earnings due up on Feb. 24, Wall Street analysts have forecast that Moderna will report EPS of $9.90 on revenue of $6.79 billion.
On Feb. 24, we’ll also get a report from cryptocurrency exchange Coinbase. This will provide an opportunity to see how bad the volatility in cryptocurrencies has been since the sector turned negative last November.
Furthermore, Coinbase’s earnings will also let Wall Street know if crypto investors continue to remain bullish, or if the ups and downs at the end of last year drove many participants away from the market. At its current price of $40,000, Bitcoin is 40% below the all-time high it reached last fall.
The churn has had an impact on COIN stock, which has declined 25% YTD to now trade at around $190 per share. As a cryptocurrency exchange, Coinbase’s fortunes are intimately tied to the prices of digital coins and tokens such as Bitcoin and Ethereum (ETH-USD). It will be difficult for the company’s stock to regain its footing while cryptocurrency prices see-saw higher and lower.
Nevertheless, the company continues to improve its platform in hopes of attracting and retaining users. And for its earnings report next week, analysts expect Coinbase to report EPS of $1.85 on revenue of $1.91 billion for the fourth quarter of last year.
Earnings Reports Next Week: Berkshire Hathaway (BRK-A, BRK-B)
The week concludes with Q4 results from Berkshire Hathaway, the holding company of legendary investor Warren Buffett.
We already got some insight into what the “Oracle of Omaha” has been up to in recent months thanks to the latest 13F filing released by the U.S. Securities and Exchange Commission (SEC). The filing showed that Buffett increased his holdings of oil giant Chevron (NYSE:CVX), and took a well-timed stake in video game maker Activision-Blizzard (NASDAQ:ATVI) just months before Microsoft (NASDAQ:MSFT) bought the company for $68 billion.
Investments aside, the Q4 report will show us how the businesses Berkshire Hathaway owns, which include the Dairy Queen fast food restaurant chain and Geico insurance, held up in the current high inflation environment. Berkshire’s stock has been rejuvenated lately, as investors dump high-valued technology names in favor of more stable and reliable value stocks. YTD, BRK-B stock is up 5% at $314 a share — outperforming the S&P 500 index which is down almost 9% on the year.
So, with its track record of consistent performance, Berkshire Hathaway is the type of stock that attracts money in times of turmoil. For its Q4 report, analysts forecast Q4 EPS of $2.88 on revenue of $68.92 billion.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.