Stock Markets Analysis and Opinion

3 Companies That More Than Doubled Analyst EPS Estimates

2024.02.07 15:05

  • Merck & Co. beat This fall 2023 analyst estimates for a lack of 11 cents by 14 cents.
  • Seagate Technology beat fiscal Q2 2024 analyst estimates for a lack of 6 cents by 18 cents, marking its first worthwhile quarter in a 12 months and potential backside to the extended bearish cycle.
  • Southwest Airlines (NYSE:LUV) nearly tripled This fall 2023 analyst EPS estimates.

Earnings season is effectively underway, and the winner-and-loser separation continues to develop. Of the businesses that beat consensus analyst estimates, even fewer go effectively past and exceed analyst expectations.

Are these one-off occasions, monetary engineering, lowballed forecasts or an indication of an enhancing development? Three firms have greater than doubled their EPS estimates within the transportation, laptop and expertise and medical sectors.

Merck & Co. Inc.

Merck & Company Inc (NYSE:), a number one world prescribed drugs firm, develops and manufactures prescribed drugs for a various vary of therapeutic areas, together with cardiovascular ailments, neurosciences, oncology, immunology, infectious illness, vaccines and ladies’s and animal well being.

Its blockbuster medication embrace Keytruda, with This fall 2023 gross sales rising 22% year-over-year (YoY) to $6.6 billion. Oncology noticed Lynparza gross sales rise 8% YoY to $315 million. Gardasil gross sales rose 27% YoY to $1.9 billion, with sturdy world demand in China. Animal well being gross sales rose 4% to $1.3 billion YoY in This fall 2023.

Triple flush

Merck reported This fall 2023 EPS of three cents, beating analyst estimates for a lack of 11 cents by 14 cents. Revenues grew 5.8% to $14,63 billion versus $14.49 billion consensus analyst estimates. Check out the sector heatmap on MarketBeat.

Raising 2024 steerage

Merck raised its full-year 2024 steerage with EPS of $8.44 to $8.59 versus $8.40 consensus analyst estimates. Revenues are anticipated between $62.7 billion to $64.2 billion versus $63.47 billion analyst estimates.

For the following decade, Merck raised its outlook for oncology revenues to develop over $20 billion, up from $10 billion. Cardiometabolic revenues ought to develop over $15 billion, up from $10 billion. Immunology ought to develop into the multi-billion vary.

Merck CEO Robert Davis commented, (*3*)

Look for Merck & Co. analyst scores and worth targets at MarketBeat. Find Merck & Co. friends and competitor shares with the MarketBeat inventory screener.

3 Companies That More Than Doubled Analyst EPS Estimates

Daily rectangle consolidation breakout

The day by day candlestick chart for MRK illustrates a rectangle consolidation breakout sample. MRK shares surged to $119.97 on January 9, forming a multi-week consolidation in an oblong buying and selling vary between $117.72 and $119.97.

The day by day relative energy index (RSI) began the 12 months surging via the 70-band and has remained elevated in an overbought situation since then and is presently on the 83-band. The breakout occurred on January 24 and continued to grind increased, pushed by its This fall 2023 earnings launch reaching a peak of $127.56. Pullback help ranges are $122.77, $120, $117.72 and $115.86.

Seagate Technology Inc.

Seagate Technology PLC (NASDAQ:) is the world’s largest producer of arduous disk drives (HDDs). HDDs are a legacy expertise as increasingly more pocket book computer systems are manufactured with out HDDs however strong state drives (SSDs) utilizing flash reminiscence with no transferring elements.

However, HDDs are nonetheless more cost effective than SSDs and have extra capability for less expensive. Seagate has additionally improved its expertise past the standard perpendicular magnetic recording (PMR) expertise with heat-assisted magnetic recording (HAMR) expertise that may enhance HDD capability two to 5 instances, as much as three terabytes (TB) per platter versus 1.3 TB for PMR expertise.

Return to profitability, however revenues proceed to slip.

Seagate reported fiscal Q2 2024 EPS of 12 cents, beating analyst estimates for a lack of six cents by 18 cents. The firm returned to profitability for the primary time in a 12 months, indicating the underside of the extended bearish cycle. Revenues fell 17.6% YoY to $1.55 billion, matching consensus analyst estimates.

Flat steerage

The firm issued in-line steerage for fiscal Q3 2024 EPS of 5 cents to 45 cents versus 19 cents analyst estimates. Fiscal Q3 2024 revenues must be between $1.5 billion and $1.8 billion versus $1.64 billion consensus estimates. Get AI-powered insights on MarketBeat.

Built for AI purposes and knowledge facilities

Its newest Mozaic drives meet the calls for of synthetic intelligence (AI) CPUs and have began launching.

Seagate Technology CEO Dave Mosley commented, “For context, the latest AI GPUs consume up to 700 watts, which is roughly 100 times more power-intensive than a hard drive operating at maximum performance. Our products can help data center operators store more exabytes using less power and space. For an example to quantify this, a single 32-terabyte Mozaic drive can replace three 10-terabyte drives storing more capacity at 1/3 of the power and footprint.”

The firm has the best product on the proper time, heading into the gradual mass capability market restoration.

Seagate Technology analyst scores and worth targets are at MarketBeat.

Seagate Technology - Stock ChartSeagate Technology – Stock Chart

Daily bull flag sample set-up

The day by day candlestick chart on STX illustrates a possible bull flag breakout. The flag began forming after peaking at $92.04 on January 26.

Lower highs and decrease lows shaped in a parallel channel because the day by day MSL set off shaped at $87.51. An MSL set off breakout can even set off the day by day bull flag. The day by day RSI is attempting to bounce towards the 60-band. Pullback help ranges are at $83.31, $79.39, $76.23 and $73.44.

Southwest Airlines Co.

Major low-cost airline service Southwest Airlines Company (NYSE:) has the biggest fleet of Boeing (NYSE:) Co.’s NYSE: BA 737 MAX planes.

Using these single-aisle jets helps maintain upkeep prices low and, with shorter turnaround instances, allows extra frequent flight departures. The firm additionally does not nickel and dime passengers with rescheduling and baggage charges; not like most carriers, Southwest nonetheless presents a two-free checked luggage coverage. This has allowed them to keep up and develop a loyal following, particularly throughout rising ticket costs.

Blowout quarter

On January 25, Southwest Air reported This fall 2023 EPS of 37 cents, crushing consensus analyst estimates for 12 cents by 25 cents. Revenues rose 10.5% YoY to a file $6.82 billion, beating $6.75 billion consensus estimates.

RASM and ASM forecasts

The firm forecasts that Q1 2024 for accessible seat miles (ASM) will rise to 10% YoY, referring to the variety of seats accessible for passengers to buy or potential revenue-generating capability. For instance, a 1000-mile flight with 100 seats would equate to 100,000 ASMs.

It forecasts income per accessible seat mile (RASM) to rise 2.5% to 4.5% YoY in Q1 2024. In 2024, ASMs ought to rise to six% YoY.

Southwest Airlines CEO Bob Jordan commented, “We completed a comprehensive winter action plan, restored our network, reached full utilization of our fleet, delivered significant new capabilities for our Customers, and had our best fourth quarter completion factor in more than a decade.”

Jordan concluded, “Our 2024 plan leverages a set of initiatives which, most importantly, includes better aligning the route network to new demand patterns. While it is early in the first quarter, these initiatives are delivering value, and we expect them to contribute roughly $1.5 billion in incremental year-over-year pre-tax profits. As a result, we expect double-digit year-over-year operating revenue growth and year-over-year operating margin3 expansion.”

Southwest Airlines analyst scores and worth targets are at MarketBeat.

Southwest Airlines - Stock ChatSouthwest Airlines – Stock Chat

Daily ascending triangle sample and hole and crap

The day by day candlestick chart on LUV shaped an ascending triangle breakout via the $30.07 flat-top higher trendline on January 24.

The $30.07 can be a day by day MSL purchase set off. The This fall 2023 earnings report induced a niche to $32.80 however resulted in a niche and crap as shares offered off again down into the ascending triangle vary.

Shares proceed to tease a breakout try however maintain getting offered off again to the triangle higher trendline. Pullback help ranges are at $29.41, $28.19, $27.25 and $25.78.

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