Wall Street Will Lift Price Target For This Portfolio Holding
One of our holdings had a beat-and-raise quarter and we'll be revisiting our price target.
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*Earnings season heats up and we’ll be using it to update our investment outlook
*Lockheed Martin delivers a beat-and-raise quarter, confirming its F-35 target for 2024
*Inter Parfums shares pop on upside for June quarter revenue, bolstering our view on Coty
With modest, fresh economic data on the horizon for Tuesday, just the June existing home sales report and no Fed speakers on deck, we will be picking through Lockheed Martin’s LMT beat-and-raise June quarter, but also results from NXP Semiconductor NXPI, General Motors GM, UPS UPS, Coca-Cola KO, Polaris Inc. PII and others.
With Lockheed and, after Tuesday's market close, Alphabet GOOGL, we’ll be parsing their results and guidance for 2H 2024 and updating our price targets to reflect what we learn. We’ll also be sifting through comments from other companies to fine-tune expectations for upcoming earnings from other portfolio companies or get some additional perspective on ones that have already reported.
As we do this, we’ll be looking for nuggets about various parts of the economy and, as more companies in the S&P 500 basket report their quarterly results, we’ll be revisiting 2H 2024 EPS expectations for that basket. That means keeping in mind the difference between operating performance versus the impact of share buyback programs. With the June quarter earnings season heating up as we move through the week, and again next week, there will be a plethora of insights and learnings for us to share as we update the portfolio’s investment “mosaic,” “tapestry” or whatever you might call it.
Here we go.
Lockheed Martin
Lockheed reported June quarter EPS of $7.11, well ahead of the $6.46 consensus as revenue for the period climbed 8.6% year over year to $18.12 billion, besting the $17.05 billion market consensus. The company also lifted its 2024 EPS forecast to $26.10 to $26.60 from $25.65 to $26.35 compared to the $6.28 market consensus. Supporting that outlook, Lockheed’s backlog exiting the June quarter stood at $160 billion, more than double the $70.5 to $71.5 billion in revenue it sees for this year.
Yesterday, we discussed the initial ramp in F-35 deliveries, and today Lockheed shared it anticipates meeting its 2024 target of 75-110 F-35s.
The company will hold its earnings call at 11 a.m. ET, and as we shared yesterday, we expect potential 2025 F-35 deliveries to be a key topic. Based on what we learn, we will revisit our above consensus price target of $520, but we do see those with targets at the lower end of the range lifting their targets after today’s beat and raise quarter.
Inter Parfums and Coty
Shares of fragrance company Inter Parfums IPAR are moving higher this morning after the company shared that its June quarter revenue will come in at $342 million, better than the $338.4 million consensus and $302.7 million in the year-ago quarter. Looking at the June quarter compared to the March quarter’s $324 million in revenue, the 5.5% sequential growth shows consumers continued to spend on fragrance despite concerns of overall slower consumer spending
We see this as positive for Coty COTY, but we will look for further confirmation when we chew through quarterly results later today from LVMH LVMHF. That report should be out soon after the Paris Stock Exchange closes at 11:30 a.m. ET. In it, we will have to delineate across LVMH’s various segments or houses as it calls them, focusing on perfumes and cosmetics.
At the time of publication, TheStreet Pro Portfolio was long LMT, GOOGL and COTY.
