Investing.com -- Here is your Pro Recap of the biggest earnings reports you may have missed this week and how analysts responded: numbers out of Tesla, Netflix, IBM, and Goldman Sachs.
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Tesla
Tesla (NASDAQ:TSLA) late Wednesday reported earnings of $0.91 per share - surpassing the $0.79 Wall Street consensus - on better-than-expected revenue of $24.93, and margins were also less bad than feared.
Still, shares sank 9.7% in Thursday trading.
Excluding regulatory credits, gross margins - which have been closely watched following recent price cuts on Tesla's electric vehicles - fell 6.8% to 18.2% in Q2 from the prior year, better than analysts' estimates of 16.9%.
The price cuts helped the EV giant boost its installed base and rake in new customers, with vehicle deliveries surging 86% to 466,140 EVs in Q2, marking a record quarter for the company.
Wedbush called the move a "smart strategy," saying after the report that the price cuts "have been in a homerun success in China, Europe, and the US… In a nutshell, we view Tesla where Apple was in the 2008/2009 period as Cupertino was just starting to monetize its services and golden ecosystem with the Street not seeing the broader golden vision at the time."
Needham and Company reiterated its Hold rating due to valuation, adding that it leans "more bullish when thinking about TSLA's positioning vs legacy [original equipment manufacturer] peers."
Goldman Sachs said the report was "solid" but that headwinds remain, reiterating its Neutral rating on the stock. Bofa also reiterated Neutral given risks from price cuts, increasing competition, and near-term macro considerations - while also noting the positive factors of cost reduction and "its ability to remain agile."
Wells Fargo, meanwhile, said Tesla delivered "a low quality" EPS beat "driven mostly by other income."
Netflix
Netflix (NASDAQ:NFLX) dropped 8.4% on Thursday, following mixed Q2 earnings: While EPS of $3.29 came in better than the consensus of $2.84, revenue of $8.19 billion missed the consensus estimate of $8.27B.
The company added 5.9 million paid net subscribers in Q2 as it successfully rolled out paid sharing to more than 100 countries, representing over 80% of its total revenue. Buyside expectations were around 4M net subscriber additions.
Evercore ISI lifted the price target to $550 after "a mother of a quarter" and removed its Tactical Underperform rating on the stock. The firm blamed the move lower in shares on expectations correction, and not a fundamental correction, and "would encourage investors to buy NFLX shares on this (small) pullback."
BofA, meanwhile, bumped the price target by $35 to $525 per share on Buy-rated NFLX shares. The analysts said the results were "healthy," adding:
Within the Media ecosystem, we believe NFLX’s depth/breadth of content positions them well to withstand the production reductions.
IBM
International Business Machines (NYSE:IBM) shares rose more than 2% after better-than-expected Q2 earnings of $2.18 a share on below-par sales of $15.58B.
IBM said it continues to expect full-year 2023 constant currency revenue growth of 3% to 5%. At current foreign exchange rates, currency is expected to be neutral to revenue growth.
UBS reiterated a Sell rating and a $110 per share price target on IBM stock, as the analysts believe the reiterated guidance bears a risk: They say they expect revenue to come in at the low end of the full-year 2023 "implied" guidance.
BofA, however, kept its Buy rating on the stock and raised the price target by $8 to $160 per share, saying, "We believe the turnaround at IBM ([revenue] growth and [free cash flow] improvement) will continue. The company has a defensive portfolio, attractive dividend yield and an underappreciated AI portfolio."
Goldman Sachs
Goldman Sachs (NYSE:GS) on Wednesday said earnings per share plunged 60% to $3.08 in Q2, missing estimates, on lower revenue of $10.89B that squeaked past consensus.
Still, shares ticked up by 1% in Wednesday trading.
The results were attributed to one-off charges related to the banking giant's home improvement lending group GreenSky and losses on its consumer and real estate loan portfolios. Company top brass had already previously warned that this would be a challenging quarter.
Investment banking fees also dropped by 20% to $1.43B, which trading revenue from fixed income, currency, and commodities slipped by more than a fourth.
Like some of its banking rivals, Goldman's investment and trading business has suffered from a slowdown in dealmaking followed by a string of Federal Reserve interest rate hikes that have put pressure on the U.S. economy.
Yasin Ebrahim, Liz Moyer, Senad Karaahmetovic, and Davit Kirakosyan contributed to this report.
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