Four major earnings
Stocks recap
Stocks recap
TESLA
Tesla (NASDAQ:TSLA) posted earnings of $0.91 per share on better-than-anticipated revenue of $24.93 and margins that were better than expected late Wednesday. Shares fell 9.7% Thursday.
Following Tesla’s recent price reduction, gross margins plummeted 6.8% to 18.2% in Q2, beating analysts’ projections of 16.9%.
Tesla delivered 466,140 EVs in Q2, up 86% from Q1.
After the news, Wedbush dubbed the price cuts a “smart strategy,” saying they “have been in a homerun success in China, Europe, and the US.” In a word, we regard Tesla where Apple (NASDAQ:AAPL) was in 2008/2009 when Cupertino was just starting to monetize its services and golden ecosystem with the Street not recognizing the bigger golden vision.
Needham and Company maintained its Hold rating due to valuation, but it is “more bullish when thinking about TSLA’s positioning vs legacy [original equipment manufacturer] peers.”
Goldman Sachs maintained its Neutral recommendation on the company, calling the report “solid” but noting challenges. Bofa maintained Neutral due to price cuts, competition, and near-term macro issues, but noted cost reduction and “its ability to remain agile.”
Wells Fargo stated Tesla had “a low quality” EPS beat “driven mostly by other income.”
Netflix
Netflix (NASDAQ:NFLX) fell 8.4% Thursday after lackluster Q2 earnings: EPS of $3.29 beat the forecast of $2.84, but revenue of $8.19 billion fell short of $8.27B.
As it expanded paid sharing to over 100 countries in Q2, the company added 5.9 million paid net members, accounting for 80% of its income. Buyside expected 4M net subscriber increases.
After “a mother of a quarter,” Evercore ISI raised its price target to $550 and withdrew its Tactical Underperform rating. The business “would encourage investors to buy NFLX shares on this (small) pullback” due to expectations correction, not fundamental correction.
NFLX shares were upgraded by $35 to $525 per share by BofA. “Healthy,” remarked the analyst:
NFLX’s content richness and breadth should help them weather production cuts.
IBM
After better-than-expected Q2 earnings of $2.02 a share on below-par revenues of $15.58, IBM International Business Machines (NYSE:IBM) shares gained more than 2%.
IBM expects 3%–5% constant currency revenue growth in 2023. Currency is neutral to revenue growth at current exchange rates.
IBM stock has a Sell rating and a $110 price target from UBS, which anticipates sales to come in at the low end of the full-year 2023 “implied” projection.
“We believe the turnaround at IBM ([revenue] growth and [free cash flow] improvement) will continue,” BofA said, maintaining its Buy rating and raising the price target by $8 to $160 per share. The company has a protective portfolio, good dividend yield, and underrated AI portfolio.”
Goldman Sachs
Goldman Sachs (NYSE:GS) reported lower revenue of $10.89B and earnings per share of $3.08, missing forecasts.Shares rose 1% Wednesday.
One-time costs for the banking giant’s home renovation lending arm GreenSky and losses on its consumer and real estate loan portfolios caused the results. Company leaders warned that this quarter would be difficult.
Investment banking fees fell 20% to $1.43B, and trading revenue from fixed income, currencies, and commodities fell more than a fourth.
Goldman’s investment and trading unit, like some of its banking rivals, has suffered from a dealmaking slowdown and a series of Federal Reserve interest rate hikes that have strained the U.S. economy.
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