RBC Capital analysts provided a review of Medtronic plc (NYSE:MDT) following the company’s reported Q4 results last week and their meeting with management to get greater clarification on the Q1 outlook, 2023 sales ramp, and color on supply chain disruptions that the company is experiencing.
The company guided to Q1/23 organic sales decline of 4.5-5.5%. The questions the analysts have been fielding from investors are around what the company’s underlying growth looks like and what impact of supply disruptions is included in its guidance.
As per their conversation with the company, the analysts note that on a comp-adjusted basis, the company is looking for an organic sales decline of 0.15% in Q1/23 vs. growth of 0.25% in Q4/22, reflecting typical seasonality.
The balance reflects supply headwinds, which management assumes will worsen from Q4 to Q1. The analysts noted that the year-over-year growth looks more challenging as it laps comps of 19.0% underlying growth in the prior year’s quarter.

Deutsche Bank analysts provided their outlook on Campbell Soup Company (NYSE:CPB) ahead of upcoming Q3/22 earnings, expected to be reported on June 8.
Although nominal dollar-based consumption remains solid, the analysts mentioned that the company’s market share performance continues to be affected by supply chain constraints and early signs of consumer trade down in categories like soup and crackers.
Furthermore, the analysts noted that consistent with the broader CPG space, the path toward margin recovery is still unclear. Consequently, while the analysts continue to expect more reinvestment than consensus, they acknowledge that the company will likely have less flexibility to spend on incremental A&P, which could hamper EPS and/or adversely affect top-line momentum and brand equity moving forward.

Ambarella, Inc. (NASDAQ:AMBA) reported its Q1 results, with EPS of $0.44 coming in better than the Street estimate of $0.36. Revenue was $90.3 million, compared to the Street estimate of $90.08 million.
In addition to the 14nm wafer shortage highlighted a quarter ago (Samsung), the company further lowered its Q2 guidance citing China covid lockdown-related supply/logistics disruptions. The company expects Q2 revenue in the range of $78-82 million, compared to the consensus estimate of $91.5 million.
Looking beyond Q2, and taking a more optimistic tone, the company expects supply to rebound in H2/22 as China lockdowns are removed and 14nm supply rebounds.
While the analysts at Deutsche Bank agree that Q2 is likely to mark the near-term revenue trough and remain impressed with the company’s CV-led technology leadership/growth, the combination of ongoing macro/sector-specific uncertainties and the company’s already premium valuation lead them to reiterate their hold rating.

HP Inc. (NYSE:HPQ) shares were trading around 4% higher Wednesday afternoon following the company’s reported Q2 results, with revenue of $16.5 billion coming in better than the Street estimate of $16.17 billion. EPS was $1.08, compared to the Street estimate of $1.05.
On the demand side, continued strength in Commercial was encouraging, offsetting the softness in Consumer. On the supply side, incremental supply chain challenges in PS are driving some revenue pushout from Q3 to Q4, but the company seems to have the “line of sight” that the supply chain will improve in Q4.
Despite a shift in revenue toward F4Q, the company reiterated its full 2022-year free cash flow target of over $4.5 billion, which takes into consideration the recovery in the PS supply chain and the reduction in inventory.
For Q1/22, the company expects EPS in the range of $1.03-$1.08, compared to the Street estimate of $1.02. For the full 2022-year, the EPS is expected to range from $4.24 to $4.38, compared to the Street estimate of $4.25.

Deutsche Bank analysts released their outlook on Brown-Forman Corporation (NYSE:BF-B) ahead of the upcoming Q4 earnings, expected to be reported on June 8.
Overall, the analysts are biased higher on revenues versus the consensus estimates heading into Q4 results, albeit lower on margins/EPS–noting cost inflation pressure, lingering translational/transactional FX headwinds, and elective investments in A&P/other capabilities. While the analysts see the company benefitting from still-solid/strong consumer demand across most markets, the company’s ongoing supply-side challenges with glass sourcing may have partially held back growth in the quarter. Moreover, the analysts noted that stronger Q4 depletions may delay the company’s efforts to replenish distributor/retailer inventory.