The three major US stock indices closed higher on Friday. The Dow Jones Industrials ended the day up 1.26%, the S&P 500 closed 1.36% higher and the Nasdaq posted a gain of 1.28%. All 11 sectors closed higher, with Materials (3.41%) and Financials (1.87%) posting the largest gains. Utilities and healthcare (both 0.57%) posted the smallest gains.
This week’s economic calendar includes the monthly Consumer Price Index (CPI) report. Economists expect Thursday morning’s release to show the index rose 0.7% month-on-month in October. Core CPI (excluding food and energy) is expected to fall to 0.5% from 0.6%. The weekly report on new unemployment insurance claims will be released on Wednesday. The number of new applications is expected to rise to 220,000 from 217,000 last week.
The three main indices traded higher in Monday’s premarket session.
Before the markets opened up, Palantir Technologies was reporting a penny shortfall in earnings per share and in-line sales. The company lowered fourth-quarter revenue guidance to a new range of $603 million to $505 million. Analysts had a consensus estimate of $506.6 million. The stock was down about 2% premarket on Monday.
NiSource reported adjusted earnings per share (EPS) that matched consensus estimates while revenue came in better than expected at $1.09 billion. The company lowered its full-year EPS guidance to a new range of $144-$1.46 from a previous range of $1.50-$1.57. NiSource also announced a growth plan that aims to grow adjusted EPS by 6% to 8% annually through 2027. Shares were trading 1.1% lower on Monday morning.
Ballard Power reported inline EPS and missed revenue. Shares rose about 0.7%.
Activision Blizzard and Lyft took turns in the earnings spotlight after U.S. markets closed on Monday. Before US markets open on Tuesday, Constellation Energy and GlobalFoundries are on deck to report quarterly results.
Here’s a preview of three companies set to report quarterly results after the US close on Tuesday.
Shares in payments processor Affirm Holdings Inc. (NASDAQ:AFRM) are down around 90% since hitting their year-high exactly a year ago. Most of this decline (84%) occurred this year. Affirm, a buy-it-now-later-payment lender, hit its 52-week low after reporting March quarter earnings. The bad news continued with the June earnings report, and expectations for the September quarter, the first of Affirm’s fiscal 2023, are not encouraging.
Out of 18 analysts covering Affirm, eight have a buy or strong buy rating and seven others have a hold rating on the stock. With the current share price at around $16.10, the implied profit based on a median price target of $28.50 is 77%. Based on the high price target of $53.00, the stock’s upside potential is almost 230%.
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Analysts expect Affirm to report first-quarter revenue of $360.47 million, down 1.0% sequentially but up 33.8% year-on-year. They also expect the company to report adjusted loss per share of $0.88, worse than the loss of $0.65 per share in the previous quarter but better than the loss of $1.13 in the first quarter last year. For the full fiscal year ending June, Affirm is expected to report a loss per share of $3.28, worse than last year’s loss of $2.51 per share, on sales of 1 $.7 billion, up 26.1%.
Affirm is not expected to report a profit in 2023, 2024 or 2025. The enterprise value-to-sales multiple is expected to be 4.3 in 2023. Based on average estimated sales of $2.22 billion and $2.8 billion for 2023 and 3.3 for 2023 and 2.6 for 2024, respectively. The stock’s 52-week trading range is $13.64-up $176.65. Affirm does not pay a dividend. Total shareholder return for the past year was a negative 90.2%.
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