Earnings Previews: Accenture, Darden Restaurants, KB Home

U.S. markets were closed Monday in observance of Juneteenth. In the first half-hour of Tuesday trading, the Dow Jones industrials were down 0.62%, the S&P 500  down 0.41% and the Nasdaq down 0.04%.

The last earnings report of note was released by Adobe after markets closed last Thursday. The company beat consensus estimates on both the top and bottom lines and issued upside earnings per share (EPS) guidance for the current quarter and for the full 2023 fiscal year. Revenue guidance was in line with estimates.

After U.S. markets close on Tuesday or before they open for regular trading on Wednesday, FedEx and Winnebago are scheduled to release results.

Here is a look at three companies that report quarterly results late Wednesday or early Thursday.

Accenture

Management and technology consulting giant Accenture PLC (NYSE: ACN) is the largest firm (by market cap) in the IT services industry, bigger than IBM and 65 other rivals. Over the past 12 months, the stock has added 18%, while IBM stock is up 1.3%. For the year to date, shares are up nearly 20%, and IBM stock is trading 2.4% lower. Accenture reports quarterly results before markets open on Thursday.

In March, Accenture acquired India-based industrial AI firm Flutura, and last week, CEO Julie Sweet said the company will invest $3 billion in AI technology over the next three years. The firm, which employs about 738,000 people, plans to double its AI staff to around 80,000.

Of 26 brokerages covering the stock, 16 have a Buy or Strong Buy rating and 10 more rate it at Hold. At a recent trading price of about $319.50, the upside potential based on a median price target of $326.00 is 2.0%. At the high target of $377.00, the potential upside is about 18%.

Analysts are expecting fiscal third-quarter revenue of $15.49 billion, which would be up 4.3% sequentially and up by about 2% year over year. Adjusted EPS for the quarter are forecast at $3.00, up 25.6% sequentially and 3.4% higher year over year. For the full 2023 fiscal year ending in August, analysts estimate EPS of $11.55, up 6.7%, on revenue of $64.32 billion, up 4.4%.

Accenture shares trade at 27.7 times expected 2023 EPS, 25.6 times estimated 2024 earnings of $12.50 and 22.9 times estimated 2025 earnings of $13.95 per share. Their 52-week range is $242.80 to $327.93. The company pays an annual dividend of $4.48 (yield of 1.4%). Total shareholder return for the past 12 months was 19.86%.

Darden Restaurants

Darden Restaurants Inc. (NYSE: DRI), the owner and operator of more than 1,800 restaurant locations, including Olive Garden and  Longhorn Steakhouse, has added more than 48% to its share price over the past 12 months. Darden reports quarterly results Thursday morning.

Last week, Darden completed its acquisition of Ruth’s Hospitality Group, adding the Ruth’s Chris Steak House brand to its stable. Ruth’s owns and operates 81 restaurants and franchises another 74. In May, food prices rose 8.3% at U.S. restaurants, down from an 8.7% year-over-year increase in April.

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