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Major stocks were in focus premarket Friday after several companies released quarterly results and outlooks. Shares of Kroger slipped lower while DocuSign rallied on upbeat guidance.
Kroger Stock Dips On Q2 Revenue Miss, Up To $1.2B Opioid Settlement
Kroger shares fell 2.8% in early trading after the supermarket chain reported mixed second quarter results.
The company posted adjusted earnings of $0.96 per share, beating analyst forecasts of $0.91 per share. However, revenue of $33.85 billion missed expectations of $34.13 billion.
Kroger also announced it will pay up to $1.2 billion to settle lawsuits related to the nation’s opioid crisis. The settlement establishes a framework to resolve claims against Kroger’s pharmacy business.
“Kroger is committed to being part of the solution to the opioid crisis,” said CEO Rodney McMullen. The company said its pharmacies appropriately dispensed medications prescribed by DEA-licensed doctors.
Planet Labs Drops On Disappointing Q2 Results, Weak Outlook
Planet Labs, which operates a constellation of Earth imaging satellites, saw shares fall 2.6% after its latest quarterly figures missed estimates.
The company reported a Q2 loss of $0.14 per share on revenue of $53.8 million. Analysts expected a smaller loss of $0.08 per share on $54.1 million in sales.
Planet Labs also issued full-year revenue guidance of $210 million to $220 million, below Wall Street’s forecast of $226 million. Ongoing supply chain constraints will continue to challenge operations in the near term, the company said.
DocuSign Jumps As Q2 Beat, Upbeat Q3 Outlook Boost Shares
DocuSign stock climbed 2.4% premarket after better-than-expected second quarter results and an upbeat third quarter outlook.
The e-signature software firm posted adjusted EPS of $0.72 on revenue of $688 million, beating estimates. DocuSign sees Q3 sales of $624 million to $628 million, above analysts’ consensus of $617 million.
“We delivered strong second quarter results…and we continue to drive growth at scale while delivering profitability,” said CEO Dan Springer.
DocuSign has been working to reaccelerate growth after a pandemic-fueled boom. The company aims to expand usage among existing customers to drive sales.
Snowflake Rises As Analyst Says Stock Is ‘Uniquely Positioned’
Shares of cloud data platform Snowflake inched up nearly 2% after DA Davidson began coverage with a buy rating.
Analyst Rishi Jaluria said Snowflake is “uniquely positioned” to capitalize on strong demand for data & analytics, application development and artificial intelligence.
With “best-in-class growth at scale,” the company should see revenue expand rapidly for years to come, the analyst wrote. He set a price target of $242.
Snowflake offers a data cloud that enables customers to unite siloed data and conduct analytics. Its clients include DoorDash, Instacart, McKesson and others.
First Solar Gains On Upgrade As Deutsche Bank Turns Bullish
First Solar shares rose 2.8% premarket after Deutsche Bank upgraded the solar company to buy from hold and boosted its price target to $235 per share.
Analyst Vishal Shah cited First Solar’s “strong growth setup” after attending the company’s investor day. Management laid out a path to achieve over 25 gigawatts of annual panel shipments by 2025.
First Solar expects to benefit from the Inflation Reduction Act, which includes tax credits to spur U.S. clean energy manufacturing. Deutsche Bank’s new price target implies 30% upside from Thursday’s close.
Adobe Up On Upgrade As Web Traffic Growth Seen Accelerating
Software maker Adobe rallied nearly 2% in early trading after Mizuho upgraded the stock to buy from neutral on Friday morning.
Analyst Siti Panigrahi said Adobe is poised to benefit as accelerating web traffic growth drives demand for its creative and document cloud offerings.
Panigrahi believes traffic has reached an inflection point that will support multiple years of above-trend growth. Adobe remains well-positioned to capitalize given its leading market share.
Adobe is slated to report its fiscal third quarter results on September 14. Strong digital media revenue growth will be a key focus for investors.
Gilead Rises On Upgrade As Pipeline Called Underappreciated
Shares of biopharma company Gilead Sciences ticked 1.6% higher premarket after Bank of America upgraded the stock to buy from neutral.
Analyst Tazeen Ahmad said investors are undervaluing Gilead’s pipeline opportunities. Its HIV portfolio remains underappreciated while new antiviral and oncology drugs offer upside potential, Ahmad wrote.
The analyst also boosted Gilead’s price target to $95 from $88 per share, pointing to more than 25% potential upside from Thursday’s close.
Gilead produces remdesivir, an antiviral used to treat COVID-19. But the company aims to expand in oncology and grow HIV drug sales to boost revenues.
RH Tumbles As Q3 Guidance Trails Estimates
Luxury home furnishings retailer RH saw its shares fall 7.3% early Friday after providing a disappointing Q3 sales outlook.
RH said it expects third quarter revenue to range from $2.49 billion to $2.54 billion. That trailed analysts’ estimates of $2.75 billion, according to FactSet.
The company cited cooling housing demand and high mortgage rates for the softness. RH also announced a new $2 billion stock repurchase program.
CEO Gary Friedman said macroeconomic challenges are likely to persist into fiscal 2023. But RH remains confident in its long-term growth potential.
In summary, stocks were driven by major quarterly results and outlooks Friday. While some companies impressed, others faced pressure after underwhelming Wall Street forecasts. The reports highlighted difficult operating conditions amid high inflation and slowing growth.