Earnings Previews: ASML, Microsoft, Texas Instruments

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In early trading Monday, the Dow Jones industrials traded down 0.01%, the S&P 500 up 0.22% and the Nasdaq up 0.54%.

Before U.S. markets opened on Monday, Synchrony Financial reported results that beat consensus estimates for earnings per share (EPS) and revenue. The bank’s provision for credit losses doubled year over year as charge-offs rose by 111 basis points to 3.48%. Shares traded down 0.7% early Monday.

Baker Hughes missed both earnings and revenue estimates but issued in-line guidance for both the first quarter and the full 2023 fiscal year. Activity has picked up but remains below pre-pandemic levels. Crude oil producers are raising shareholder payouts, not drilling activity. That is why the shares were up 0.9% in early trading Monday.

Before markets open on Tuesday, D.R. Horton, General Electric, Halliburton, Lockheed Martin and Raytheon will report quarterly results. Three other companies are also on deck for earnings reports first thing Tuesday: Johnson & Johnson, 3M and Verizon.

After U.S. markets close Tuesday or before Wednesday’s open, these three companies will report quarterly results.

ASML

Semiconductor manufacturing equipment maker ASML N.V. (NASDAQ: ASML) stock has lost around 8% from its share price over the past 12 months, including a 48% share price gain over the past three months. For the year to date, ASML shares are up nearly 19%. ASML is due to report results before U.S. markets open on Wednesday.

The Netherlands-based firm opposes the U.S. ban on shipments of its most advanced chipmaking equipment to China, even though it agreed to a similar restriction from the Dutch government in 2019. But announcements of new U.S. chipmaking facilities have pushed the stock higher regardless.

Of 35 analysts following the stock, 30 have a Buy or Strong Buy rating and four others have Hold ratings. At a recent price of around $648.90 a share, the implied upside based on an average price target of about $764.00 is 17.7%. At the high price target of $940.00, the upside potential reaches nearly 45%.

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Analysts expect the company to report revenue of $6.94 billion for the December quarter, which would be up by 22% sequentially and by 21.9% year over year. Adjusted EPS are forecast at $4.72, up 12.4% sequentially and 5.4% higher year over year. For the full 2022 fiscal year, analysts anticipate EPS of $15.30, down by about 3.3% year over year, on revenue of $23.2 billion, up 9.5%.

ASML stock trades at 42.0 times expected 2022 EPS, 31.5 times estimated 2023 EPS of $20.37 and 25.1 times estimated 2024 earnings of $25.57 per share. The stock’s 52-week trading range is $363.15 to $721.20. The company pays an annual dividend of $6.63 per share (yield of 1.02%). Total shareholder return for the past 12 months was negative 7.2%.