Earnings Previews: Palantir, Sabre, CVS

No earnings reports are scheduled for release after markets close Friday, and no earnings are scheduled for release on Monday, February 15, when markets will be closed for the Presidents Day holiday.

We get back into the height of the season first-thing Tuesday morning with more than 30 earnings releases on the schedule. Here we focused on three companies with stocks that trade more than 7 million shares a day.

Palantir

Palantir Technologies Inc. (NYSE: PLTR) trades an average of more than 72 million shares a day. The company provides a software platform for the U.S. government’s intelligence operations, among other products. Since coming public in a direct listing last September, the stock price has more than tripled. The stock got a boost on Monday after Palantir announced a partnership with IBM, after expanding deals earlier this month with energy giant BP and mining company Rio Tinto.

Palantir stock also got a jolt higher late last month from Reddit’s r/wallstreetbets forum, squeezing short sellers and cutting short interest in the stock by more than a third in just two weeks.

Analysts expect the company to report earnings per share (EPS) of $0.02 for the fourth quarter, on revenue of $301 million. For the full fiscal year, the forecast calls for EPS of $0.07 on sales of $1.1 billion.

The stock was trading at around $34 a share in the noon hour Thursday, down by around $4 since Tuesday. At the current price, the stock trades at 460 times expected 2020 earnings, 290 times expected 2021 EPS and 218 times expected 2022 EPS. Shares also trade at about double the consensus price target and $4 higher than the highest price target.

Sabre

In 2020, Sabre Corp. (NASDAQ: SABR) had a tough year, but not one as bad as it looked to be in last March when shares were down about 85% since the beginning of the year. The stock ended the year down 45% from its closing price in December 2019, and so far in 2021 shares trade essentially flat.

The company supplies technology for the travel and tourism industry, both of which suffered a miserable year in 2020. The stock trades about 8.5 million shares a day, which seems like a lot because most of the shares are held by institutions and mutual funds.

Analysts have a dim view of the company’s fourth-quarter and full-year results, projecting per-share losses of $0.66 for the quarter and $2.93 for the year. In 2019, the full-year profit was $1.01 per share. Revenue is expected to dive by 65% in the quarter to $329 million and by 66% for the year to $1.34 billion.

At the current trading price near $12, the stock trades at less than 2% below its consensus price target. Analysts are forecasting a net loss per share of around $1.40 for fiscal 2021 and EPS of $0.01 in fiscal 2022.

CVS

CVS Health Corp. (NYSE: CVS) operates nearly 10,000 retail pharmacies and more than 1,100 rapid care locations, as well as pharmacy management programs and health insurance plans through its 2018 acquisition of Aetna. The rollout of COVID-19 vaccines to pharmacies has been slow, and CVS expects to begin vaccinating people in some of its stores in 11 states on Friday. New CEO Karen Lynch took over on February 1.

Analysts expect CVS to post EPS of $1.24 for the quarter, a decline of some 28% year over year. Revenue for the quarter is pegged at $68.8 billion, up nearly 3% year over year. For the full year, estimates call for revenue of $268 billion, an increase of 4.4%.

Shares traded Thursday at around $73, implying a potential upside of around 18% to the consensus 12-month price target of $85.42. Using the high target of $102, the stock’s potential upside is nearly 40%. Shares trade at around 10 times expected 2020 and 2021 EPS.

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