Earnings Watch: Season Ends With Lowe's, Nvidia, Moderna and More

The season ends on a down week. Will earnings boost these stocks and the markets higher?
Anna VodFeb 23,2021,19:16

Earnings season is nearing closing time, but a few high-profile reports are still awaited amid a general downward market trend. Financials for the year-end quarter and full year 2020 are expected this week from Moderna, Lowe’s, and Nvidia, among others, while Home Depot and Macy’s have already beat analysts’ expectations.

Macy’s (NYSE: M) is the only stock in the green in this list, trading up 2%, at $15.58 per share, on Tuesday afternoon. The company reported per-share adjusted earnings of 80 cents for the three months through January, down 62% year-over-year but still better than analysts expected. That was Macy’s first profitable quarter in the pandemic-stricken year, as the company took cost-cutting measures, slashed inventory, and focused on online sales. Revenue was $6.78 billion, down 19%, while net income halved to $160 million, the company said.

The fashion retailer also issued a $20 billion sales forecast for the year 2021 – which it called a year of “recovery and rebuilding.” The company does, however, see declining sales at its malls amid continued Covid-19 restrictions and the changing consumer spending habits.

Home Depot (NYSE: HD) posted its fourth quarter results Tuesday morning, topping estimates, but its stock declined nevertheless, down 4% in the afternoon, at $265.13 per share. The home improvement store reported earnings of $2.9 billion, or $2.65 per share, on revenue of $32.3 billion, up 25% year-over-year. That exceeded analysts’ expectations on both markers, according to Barron’s. However, Home Depot did not provide an outlook for fiscal 2021, citing ongoing uncertainty from the pandemic.

Home Depot and its rival, Lowe’s (NYSE: LOW), have seen their stocks surge over nationwide lockdowns throughout most of 2020. CapitalWatch’s Anthony Russo has closely followed these two stocks since June, when both traded roughly 25% lower. As we see on Tuesday, Home Depot’s improved sales failed to ease investor fears, and the same may be expected from Lowe’s, which is scheduled to release its financial results on Wednesday. However, as The Motley Fool noted, Lowe’s comparable-store sales have significantly exceeded Home Depot, at 35% in the third quarter, and this figure may translate into more market-share wins, says author Demitri Kalogeropoulos.

On Tuesday, Lowe’s also traded lower, at $167.20 per share, down 3% from yesterday’s close.

Nvidia Corp. (Nasdaq: NVDA) is expected to release its results on Wednesday evening. Since Friday, NVDA shares slid from near $600 apiece to today’s $553.26 per share, riding the red wave. This was despite Susquehanna’s upgrade to $700 from $625 per share of the stock on Monday.

"From a high level, we expect another beat-and-raise quarter as continued stay-at-home dynamics, Ampere gaming ramp, and a resurgence in crypto-mining drives GPU demand to all-time highs," wrote analyst Christopher Rolland, as cited by MarketWatch.

Nvidia’s earnings are expected to indicate where the chip industry is heading. Forbes highlights the company’s solid gaming and data center segments, expected product launches, and a possible major acquisition. Analysts expect record sales of nearly $5 billion from the holiday quarter marked by shortages of the company’s gaming cards.

Moderna (Nasdaq: MRNA) is scheduled to post before markets open Thursday, and this will be the first report to reflect its Covid-19 vaccine sales. Having worked on the development of the cure since January 2020, the biotech company is now to reap the results. On Tuesday, MRNA stock was down 9%, at $144.83 per share. Still, despite the recent slide from peaking at $189 in early February, the stock is a long way from an $18 per share price just last year .

Moderna’s mRNA-1273 received FDA approval for emergency use in December, and likely began shipping doses that month, which is the reason Zacks Equity Research expects to see vaccine sales reflected in the year-end quarter.

This week, Moderna announced it will include the number of vaccine doses to 15 from 10 in each vial. The plan, aimed to ease the production delays, will quicken the delivery pace and increase the number of vaccinated patients, as reported by Benzinga. Earlier, the company said it expects the manufacturing bottleneck to be short-term and will not affect its monthly delivery targets. By the end of the first quarter of 2021, Moderna expects to deliver 100 million doses of its mRNA-based Covid-19 vaccine. The second 100 million-dose delivery is scheduled for the end of May 2021, and the third batch for the end of July 2021, according to a mid-February official company statement.

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Topics:low, nvda, hd, macy's, mrna, Covid-19, earnings