TD SYNNEX (NYSE: SNX) has confirmed that it will release its fiscal Q4 earnings on January 11, 2022, before the market opens.
What to look for
TD SYNNEX was previously known as SYNNEX Corporation, but it changed the name on September 1, 2021, following the acquisition of Tech Data Corporation. The company is expected to report a YoY increase in revenue attributed to revenues from the merger with Tech Data Corp, but that might be partially offset by revenue loss following the separation of its Concentrix business. In addition, steady IT spending due to fast-growing digital transformation will also boost Q4 earnings.
Earnings: Stockearning’s estimated EPS for the fiscal fourth quarter will be $2.6 per share. Consensus estimates peg the earnings at $2.67, suggesting a YoY decline of 48.8%. In the third quarter, the company reported diluted EPS from ongoing operations of $1.81 and non-GAAP EPS of $2.14, representing a 13.8% change. Historical EPS Performance shows that the company has topped EPS estimates in the past 12 quarters.
Revenue: for the fourth quarter, the company is projecting revenue between $15 billion and $16 billion. In the third quarter, the company had revenue of $5.2 billion, mostly impacted by the industry-wide supply chain problems.
Stock movement: SYNNEX has been UP 25 times out of the past 47 quarters. So, the historical price reaction suggests a 53% probability of the share price going UP once the company reports its fiscal Q4 earnings. According to the Stockearning algorithm, the predicted first-day move is 6%, while the predicted move on the seventh day is 6%.
What analysts are saying
Northcoast analyst Keith Housum commenced coverage on the stock with a “Buy” rating and a price target of $136.
Loop Capital analyst Ananda Baruah raised his price target on SNX from $150 to $165 and maintained a "Buy" rating on the shares. According to the analyst, the 9% drop in the shares price following revenue miss in the last quarter due to supply chain constraints is an attractive buying chance considering the landmark combination with Tech Data that closed in September. Baruah added that there are "material cost synergies" and market share gains for the stock as new geographical entries will now be possible.
Barrington analyst Vincent Colicchio lowered his price target in SNX Shares from $140 to $128 but maintained a “Buy” rating on the shares post Q3 earnings. In a research note, the analyst told investors that demand in the quarter was "solid and relatively broad-based" with considerable strength in commercial software, security, notebooks, and networking. Colicchio explained that the price target reduction was because he was "disappointed by the growth prospects for the company in fiscal 2022 due to supply constraints."
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