Daily Update - April 12, 2023
Selected highlights of the day
By: Matthew Otto
ADTRAN Holdings faces logistical challenges
Has announced preliminary unaudited financial results for the first quarter ended March 31, 2023. The preliminary revenue is expected to be between $322 million and $326 million, primarily due to customer inventory corrections and supply constraints. The GAAP operating margin is expected to be between -14% and -17%, and the non-GAAP operating margin is expected to be between -1% and -2.5%. The final results will be released on May 8, 2023. The company’s CEO, Tom Stanton, expects the inventory impact to be transitory, and they plan to adjust expenses to reflect current conditions.
Wall Street did not take the delay well.
- Northland Capital Markets analyst Tim Savageaux has downgraded the stock from Outperform to Market Perform with a price target of $13.
- Needham analyst Ryan Koontz maintains a Buy rating on Adtran but lowered the price target from $28 to $21.
- Rosenblatt analyst Mike Genovese also reduced the price target to $16.00 from $23.00 but keeps a Buy rating.
CarMax has reported Q4 2023
Net revenues of $5.7bn, down 25.6% YoY, with retail used unit sales declining 12.6%, wholesale units down 19.3%, and comparable store used unit sales declining 14.1%. Gross profit per retail unit increased by $82 to $2,277 YoY, while gross profit per wholesale unit remained relatively flat. Net earnings per diluted share decreased from $0.98 to $0.44 YoY. CEO Bill Nash said the company is continuing to “prioritize initiatives to increase efficiencies and create better experiences for our associates and customers”.
- Seth Basham from Wedbush has a Neutral rating and a price target of $55.
- Scot Ciccarelli from Truist Securities has a Hold rating and a lowered price target of $64 ,down from $66.
- Craig Kennison from Baird has an Outperform rating and increased his price target from $65 to $80.
- Michael Montani from Evercore has an In Line rating and raised her price target from $66 to $70.
American Airlines disappoints Wall Street
The Fort Worth, Texas based company has updated its profit outlook for the first quarter and the new guidance fell short of analysts’ expectations. American Airlines stated that it expects to report adjusted earnings per share of between 1 cent and 5 cents, which is an improvement from its previous guidance of break-even. However, the guidance falls below the 5 cents per share expected by analysts, according to FactSet data.
- No new analysts recommendation are provided at this time
Global Payments gets a vote of confidence
Goldman analyst Will Nance expressed his belief that the company’s merchant business is positioned to sustain somewhat better than feared trends as currency headwinds fade, aided by a stronger start to the year in 1Q23.
- Nance upgraded Global Payments from Neutral to Buy and with a $127 price target.
Crypto receives a positive feedback
- Wells Fargo analyst Jeff Cantwell maintained his Equal-Weight rating on Riot Platforms and raised the price target from $5 to $6.
- Needham analyst John Todaro kept his Buy rating on Riot Platforms and upgraded his price target from $9 to $15.
Ives gives a vote of confidence for Microsoft
- Wedbush analyst Daniel Ives maintains Microsoft with a Outperform and raises the price target from $290 to $315.
The chart below demonstrates how Ives performed with predicting Microsoft price target. As you can see, Ives did very well in predicting the rise of the stock in the last four years.
