SKIL - Earnings Week Ahead: JP Morgan Wells Fargo Citi Delta Air Lines and more

2023-04-06 16:08:08 ET

The second quarter’s first full week will include a number of economically significant earnings reports, not least of which is a slate of big bank earnings including JP Morgan ( JPM ) and Wells Fargo ( WFC ).

The coming week will start slowly, with a modest slate of reports due Monday through Wednesday. Greenbrier Cos. ( GBX ) -- which plays an integral role in the now heavily scrutinized railroad industry -- and Albertsons ( ACI ), which is still pursuing a merger with Kroger ( KR ), headline the week’s first half.

Action then picks up on Thursday with Delta Air Lines ( DAL ) offering the quarter’s first major airline-earnings report, followed by Friday’s slate of bank earnings that includes JP Morgan ( JPM ), Citi ( C ) and Wells Fargo ( WFC ).

Below is a list of major earnings report due in the week of April 10-14:

Monday, April 10

The Greenbrier Cos. ( GBX )

Railroad freight-car manufacturer Greenbrier ( GBX ) is set to post its fiscal second-quarter earnings results after the bell on Monday. Just about three weeks prior to the print, the company provided preliminary Q2 results that projected $1.1B in revenue, deliveries of 7,200 units and GAAP EPS of $0.95 to $1 per share. Those figures outpaced the previous Street expectations by a wide margin and helped lift the consensus. While GBX has gained about 15% in the past six months, the stock has nonetheless declined about 9% year to date. The analyst consensus remains a Buy , though Bank of America became the first to rate the stock a Sell in January .

• Consensus EPS Estimates: $0.97
• Consensus Revenue Estimates: $1.07B
• Earnings Insight: Greenbrier has beaten EPS expectations in 6 of the past 8 quarter, rising above revenue estimates in 5 of those reports.

Also reporting: Tilray Brands ( TLRY ), PriceSmart ( PSMT ) and iMedia Brands ( IMBI )

Tuesday, April 11

Albertsons Companies ( ACI )

Supermarket chain Albertsons ( ACI ) is set to report its fiscal fourth-quarter results prior to the bell on Tuesday. ACI continues to face scrutiny over its proposed blockbuster merger with Kroger ( KR ). The two outlined plans in February to to divest 250-300 stores ro satisfy antitrust regulators, though reports indicate this number might be insufficient to win the deal’s approval.

As uncertainty remains, analysts at both Morgan Stanley and RBC have taken the view that Albertson’s ( ACI ) provides more upside than downside .

“We believe that while shares may trade sideways near-term, the risk to reward ultimately skews positive,” RBC analyst Steven Shemesh wrote in late March. “While we think a discount is warranted given ACI's concentrated shareholder base, it's worth noting that ACI has out-comped KR in 12 of the last 14 quarters and is currently operating at a higher margin profile.”

• Consensus EPS Estimates: $0.68
• Consensus Revenue Estimates: $18.17B
• Earnings Insight: Albertsons has beaten revenue expectations in 8 consecutive quarters, but has beaten EPS estimates in only half of those reports.

Also reporting: CarMax ( KMX ), ING Groep ( ING ), Skillsoft Corp. ( SKIL ), Cognate Software ( CGNT ) and Splash Beverage Corp. ( SBEV )

Wednesday, April 12

Apogee Enterprises ( APOG )

Apogee industries ( APOG ) is set to post its earnings results before the bell on Wednesday. Shares of the Minnesota-based architectural-products company have fallen about 10% in the past year, edging about 5% lower year to date. Despite that downbeat performance, Seeking Alpha contributor Daniel Jones advised the stock is a Buy at current levels.

“It's unclear what the picture holds for the business, but the overall picture looks positive for shareholders at the moment,” he wrote in a recent analysis . “Given how cheap shares are, additional upside from here is likely warranted.”

Seeking Alpha’s Quant team, meanwhile, shifted the stock to a Hold in late March . Ahead of the report, the company announced Matt Osberg as its next EVP and CFO, effective April 28 . He most recently served as CFO at Helen of Troy Limited.

• Consensus EPS Estimates: $0.85
• Consensus Revenue Estimates: $346.58M
• Earnings Insight: Apogee has beaten EPS and revenue expectations in 7 of the past 8 quarters

Also reporting: Rent the Runway ( RENT ) and Sportsman Warehouse Holdings ( SPWH )

Thursday, April 13

Delta Air Lines ( DAL )

Delta Air Lines ( DAL ) will be the first major airline to report earnings this season, with its fiscal first-quarter earnings update scheduled for premarket hours. Shares of Delta Air Lines ( DAL ) have risen about 4% to start 2023, extending about a 10% rebound in the past six months. The Seeking Alpha Quant team and sell-side analysts rate the stock a Strong Buy. Delta was also recently upgraded to Buy at Evercore ISI , and maintained as the only Buy among major airlines at Jefferies. However, Jefferies trimmed earnings expectations following the recent surprise output cut from OPEC, which is likely to increase jet-fuel costs . Analysts have cut DAL’s first-quarter EPS expectations multiple times in the past 90 days amid rising cost expectations.

The carrier recently reaffirmed its first quarter forecast at a JP Morgan conference in mid-March. However, airfare prices have declined modestly into 2023, according to recent channel checks from TD Cowen.

• Consensus EPS Estimates: $0.32
• Consensus Revenue Estimates: $12.25B
• Earnings Insight: Delta has flown above EPS estimates in 5 of the past 8 quarters, rising above revenue expectations in each of those reports

Also reporting: Progressive Corp. ( PGR ), Fastenal ( FAST ), and Infosys ( INFY )

Friday, April 14

Sector Spotlight: Big Bank Earnings

Bank-earnings season kicks off on Friday, with Citi ( C ), JP Morgan ( JPM ) and Wells Fargo ( WFC ) all due to report. The reports will be the first slate of bank results since Silicon Valley Bank’s collapse in March.

Many of the major banks due to report are said to be in the FDIC’s crosshairs to bear the brunt of costs associated with the failures of Silicon Valley Bank ( OTC:SIVBQ ) and Signature Bank ( OTC:SBNY ). Citi analyst Keith Horowitz estimated that this increased FDIC assessment means ~3.5% headwind for 2024 EPS for major banks. Wells Fargo (NYSE:WFC) is expected to face a 4.5% impact to 2024 EPS, JPMorgan Chase ( NYSE: JPM ) 3.8%, and PNC Financial ( PNC ), which is also due to report on Friday, is expected to feel a 4.5% headwind.

Many major banks reportedly received billions in deposits amid concerns about the stability of regional banks. However, they also worked jointly to support troubled smaller banks like First Republic ( FRC ). The largest banks -- including JPMorgan ( JPM ), Bank of America ( BAC ), Citi ( C ) and Wells Fargo ( WFC ) -- agreed to contribute $5B in deposits each, while PNC Financial ( PNC ) agreed to contribute $1B. In total, 10 big banks contributed $30B to First Republic .

“This action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes,” a joint statement read.

The SPDR S&P Bank ETF ( KBE ), which counts many of the banks to report on Friday among its top holdings, has fallen more than 20% year to date. The ETF has remained depressed despite the apparent rise in deposits for major banks as of late.

Also reporting: UnitedHealth Group ( UNH ), BlackRock ( BLK ) and Byrna Technologies ( BYRN )

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