Earnings Previews: ON Semiconductor, Tyson Foods

Wednesday’s big earnings shocker came after the closing bell, when Meta Platforms missed earnings estimates and offered weak guidance. Analysts reacted quickly to the report, and while most have maintained upbeat ratings, price targets have been lowered across the board.

After markets close Thursday, four firms will report quarterly results: Activision Blizzard, Amazon, Ford and Snap. There are no notable reports due out after markets close Friday.

Here is a look at two firms scheduled to report results before markets open on Monday.

ON Semiconductor

In early December, ON Semiconductor Corp. (NASDAQ: ON) posted an all-time high share price of $71.25. Since then, the stock dropped by nearly 25%, before adding about 14% as of Wednesday night’s close. For the past 12 months, the stock is up about 58%.

The company has beaten earnings and revenue estimates in each of the last six quarters. Like most other chipmakers, ON Semi experienced stronger demand than it was able to supply, particularly from automakers. How that demand is stacking up for this year and how the company plans to meet it are going to be pivotal points in its fourth-quarter earnings report.

Of the 30 analysts covering the stock, however, most are bullish, with 20 giving the stock a Buy or Strong Buy rating. Another nine rate the stock at Hold. At the recent share price of around $58.20, the implied share price gain based on a median price target of $65 is 10.5%. At the high price target of $82, the implied gain is nearly 51%.

Quarterly revenue is forecast at $1.79 billion, which would be up 2.8% sequentially and 23.4% higher year over year. Adjusted earnings per share (EPS) are forecast at $0.94, up 8% sequentially and up 169% year over year. For the full fiscal year, analysts have estimated EPS of $2.84, up 230%, on a sales jump of 27.2% to $6.69 billion.

The stock trades at 20.8 times expected 2021 EPS, 17.8 times estimated 2022 earnings of $3.27 and 16.5 times estimated 2023 earnings of $3.53 per share. The stock’s 52-week range is $34.01 to $74.26. The chipmaker does not pay a dividend, and total shareholder return over the past year was 57.6%.

Tyson Foods

Tyson Foods Inc. (NYSE: TSN) stock has added about 45% to its value over the past 12 months. Just two weeks ago, the stock was up more than 50%. Tyson, a global supplier of beef, chicken, pork and prepared food, is among consumer staples stocks that have fallen to levels last seen in June, since reaching a peak in early January. The U.S. cow herd has down by 2% year over year, which means lower supply going forward and rising costs for food preparers like Tyson. Investors and analysts will want to hear the company’s outlook for 2022.

Analysts remain bullish on the stock, probably because people have to eat and lots of them get their food from Tyson. Of 15 analysts covering the stock, eight have ratings of Buy or Strong Buy and all the rest have Hold ratings. At a share price of around $90.95, the stock has outrun the median price target of $90. At the high price target of $110, the implied gain is 26.4%.

For Tyson’s first quarter of fiscal 2022, analysts are expecting revenue of $12.19 billion, down 14.8% sequentially and 16.5% year over year. Adjusted EPS are forecast at $1.96, down 22.5% sequentially but up 1.5% year over year. For the full fiscal year, Tyson is currently expected to report EPS of $7.38, down nearly 11%, on sales of $50.32 billion, up 7%.

Tyson stock trades at 12.3 times expected 2022 EPS, 12.0 times estimated 2023 earnings of $7.57 and 11.2 times estimated 2024 earnings of $8.14 per share. The stock’s 52-week range is $63.22 to $94.09. The company pays an annual dividend of $1.84 (yield of 2.01%). Total shareholder return over the past year was 42.2%.

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