Pitney Bowes Stock Is A Rebound Play

On Apr. 30, 2021, Pitney Bowes released its fiscal first-quarter 2021 results for the quarter ending March 2021. The Company reported an earnings-per-share (EPS) profit of $0.07 excluding non-recurring items versus consensus analyst estimates for a profit of $0.05, a $0.02 beat. GAAP earnings were (-$0.18) which includes a loss related to debt financing. Adjusted EPS includes a $0.02 tax benefit from affiliate reorganization. Revenues grew 14.9% year-over-year (YoY) to $915.2 million beating analyst estimates for $873.82 million. The Company reduced debt by $126 million from year-end 2020. Global Ecommerce revenues rose 41% YoY. Pitney Bowes CEO Mark Lautenbach stated:

Pitney Bowes expects to grow full-year 2021 annual revenues in the low-to-mid single digits. Adjusted EPS is expected to grow over the prior year driven by improvement in Global Ecommerce. However, the Company expects lower free cash flow due to one-time benefits in 2020, not expected in 2021.

CEO Lautenbach set the tone:

He also detailed the Presort business continued momentum in 2020. Global Ecommerce is the growth driver with 40% YoY growth and a nearly 400 basis point improvement in EBIT margins. However, transportation costs has remained high for both E-commerce and Presort but plans to fix that with automation solutions and insource transportation. He concluded, “ It’s hard to call the first quarter an inflection point given the nominal EBIT increase, but revenue and profit did increase and are very much like our position going forward. Each business is poised to continue to make progress during this year and for that matter, going forward beyond this year. All in all, I’m quite pleased with the quarter. It turned in another strong revenue performance and improved EBIT across each segment compared to the prior year.”

Using the rifle charts on the weekly and daily time frames provides a precision view of the playing field for PBI shares. The weekly rifle chart peaked off $15.53 Fibonacci (fib) level. The weekly 5-period moving average (MA) went flat at $8.70 with the 15-period MA at the $8.42 fib. The weekly stochastic is crossing down indicating the momentum is failing. The weekly form a market structure high (MSH) sell triggered under $8.70. The weekly market structure low (MSL) buy triggers on the breakout through $9.28. The daily rifle chart is also starting to peak out as the 5-period MA is falling at $8.80 for a potential crossover breakdown through the 15-period MA at $8.75. The daily stochastic failed the mini pup attempt and crossed back down as the divergence top resumes with lower Bollinger Bands (BBs) at $7.88. Prudent investors can monitor for opportunistic pullback levels at the $7.88 daily lower BBs/fib, $7.52 stinky 2.50s, $6.97 fib, $6.53 fib, and the $5.86 fib. The upside trajectories range from the $10.47 fib up towards the $15.53 fib level.

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