Earnings Previews: Albemarle, APA, Qualcomm, Robinhood

Albemarle increased its dividend payment last week and closed the $200 million acquisition of a China-based lithium refiner. Prices for battery-grade lithium carbonate have reached an all-time high of around $77,000 per metric ton, a near-doubling of the price since the beginning of the year. Albemarle also received $150 million from the federal Inflation Reduction Act to help pay for a new lithium concentrator in North Carolina.

Analysts are bullish on Albemarle. Of 22 brokerages covering the stock, 13 have a Buy or Strong Buy rating and seven rate the shares at Hold. At a recent price of around $250.00 a share, the implied gain based on a median price target of $314.00 is 12.1%. Based on the high price target of $440.00, the upside potential is 57.1%.

Third-quarter revenue is forecast at $2.21 billion, which would be up nearly 50% sequentially and 166% higher year over year. Adjusted EPS are forecast at $6.99, up over 102% sequentially and by 566% year over year. For the full 2022 fiscal year, analysts expect Albemarle to report EPS of $21.31, up 427%, on sales of $7.51 billion, up more than 125%.

Albemarle stock trades at about 13.1 times expected 2022 EPS, 10.7 times estimated 2023 earnings of $26.08 and 11.4 times estimated 2024 earnings of $24.57 per share. The stock’s 52-week trading range is $169.93 to $308.24. Albemarle pays an annual dividend of $1.58 (yield of 0.56%). Total shareholder return over the past year was 12.5%.

APA

Independent oil and gas producer APA Corp. (NYSE: APA) has added about 74% to its share price over the past 12 months. Since posting a 52-week high in early June, however, the stock dropped 38% after four weeks, before bouncing higher to narrow the loss since June to about 8.3%.

Crude oil prices have dropped by about 28% since early June, primarily due to recession fears and the continuing Russian war on Ukraine. In an early October press release, APA estimated its average realized price per U.S. barrel of oil would be $94 in the third quarter and that U.S. production would exceed 212,000 barrels of oil equivalent. International prices are expected to average $100 per barrel of oil and production is forecast at around 171,000 barrels of oil equivalent

Analysts remain bullish on the stock, with 17 of 28 having a rating of Buy or Strong Buy and 10 more rating the shares at Hold. At a share price of around $45.50, the upside potential based on a median price target of $52.00 is about 14.3%. At the high price target of $75.00, the upside potential is about 64.8%.

For the company’s third quarter of fiscal 2022, analysts expect APA to report revenue of $2.35 billion, down 22.9% sequentially but up 42.4% year over year. Adjusted EPS are expected to come in at $1.78, down 24.8% sequentially and 81.6% higher year over year. For the full fiscal year, EPS are forecast at $8.30, up nearly 113%, on sales of $10.66 billion, up 34.5%.

APA stock trades at about 5.5 times expected 2022 EPS, 4.8 times estimated 2023 earnings of $9.49 and 5.2 times estimated 2024 earnings of $8.79 per share. APA’s 52-week range is $22.94 to $51.95. The company pays an annual dividend of $1.00 (yield of 2.2%). Total shareholder return for the past year was 76.3%.

Qualcomm

Networking chip and equipment maker Qualcomm Inc. (NASDAQ: QCOM) has lost more than 11% from its share price over the past 12 months. For the year to date, the share price is down by nearly 35%.