This week’s earnings will be focused on retailers. Beginning Tuesday morning, with Dow Jones industrial average components Home Depot and Walmart take center stage, but reports are also due from another Dow stock, a chipmaking giant, and China’s largest e-commerce company.
Though not in the same market-cap league as those stocks, three companies reporting results after markets close Monday will garner some attention: Bitfarms, IonQ and Lucid. One is a bitcoin miner, one is a quantum computer maker and the other is a hot electric vehicle maker.
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Here’s a look at four companies set to report results either after markets close on Tuesday or before they open on Wednesday.
Lowe’s
First thing Wednesday, Home Depot rival Lowe’s Companies Inc. (NYSE: LOW) will report third-quarter fiscal 2022 results. Over the past 12 months, the share price has risen by just over 50%, with half that gain coming in the October quarter. Over the same 12-month period, Home Depot shares are up about 38%.
What analysts are likely to be paying closest attention to is how much of Lowe’s business is not coming from professional contractors, electricians and plumbers. The company claimed that 25% of second-quarter revenue came from professionals. Any increase or decrease will weigh heavily on how investors react to earnings.
Of 32 analysts covering the company, 25 rate the shares as a Buy or Strong Buy. Another seven give the stock a Hold rating. At a recent price of around $235.10, Lowe’s stock trades essentially at the median price target of $235. At the high price target of $281, the upside potential is 19.5%.
Third-quarter revenue is forecast at $21.99 billion, which would be down 20% sequentially and 5.9% lower year over year. Adjusted earnings per share (EPS) are expected to come in at $3.25, down 45% sequentially but up 18% year over year. (The July quarter is historically the best for both home improvement giants.) For the full year, analysts expect EPS of $11.44, up 29%, on sales of $93.66 billion, up 4.5%.
Lowe’s share price to earnings multiple for the 2022 fiscal year is 20.6. For the 2023 fiscal year, the multiple to an estimated $12.22 EPS is 19.3, and for 2024, it is 17.2 times estimated EPS of $13.67. The stock’s 52-week range is $146.72 to $239.27. Lowe’s pays an annual dividend of $3.20 (yield of 1.35%).
StoneCo
StoneCo Ltd. (NASDAQ: STNE) provides fintech services to merchants and their partners in Brazil. The company is headquartered in the Cayman Islands and is a subsidiary of HR Holdings. Over the past 12 months, the shares have dropped about 53%, including a spike to a gain of around 45% in mid-February. For the year to date, including that spike, the stock is down about 39%.
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At the end of June, Cathie Wood’s ARK Fintech Innovation ETF owned 585,570 shares of StoneCo stock. That investment more than doubled to 1.82 million shares as of September 30. By Friday’s close, the fund had pared its holdings to 1.77 million shares, valued at roughly $60 million.
Analysts are mostly bullish on the shares, with 10 of 16 giving the stock a Buy or Strong Buy rating while the other six rate it at Hold. At a price of around $30.60, the upside potential based on a median price target of $57.32 is 87%. At the high price target of $96.35, the upside potential is about 215%.
When StoneCo reports third-quarter results late on Tuesday, analysts are estimating revenue of $262.74 million, up 113% sequentially and 59% year over year. Adjusted EPS are forecast at $0.11, up from a loss per share of $0.09 in the prior quarter and down 39% year over year. For the full year, analysts are expecting EPS of $0.45, down 30.4%, on revenue of $825.8 million, up 29.2%.
StoneCo’s share price to earnings multiple for the 2022 fiscal year is 69.5. For the 2022 fiscal year, the multiple to estimated EPS of $1.00 is 35.9, and for 2023, it is 23.5 times estimated EPS of $1.32. The stock’s 52-week range is $28.40 to $95.12. StoneCo does not pay a dividend.
24/7 Wall St.Target
Target Corp. (NYSE: TGT) is also reporting quarterly results before Wednesday’s opening bell. The company’s stock has added about 66% to its share price over the past 12 months, including a drop of 15% in early August. Since then the shares have managed only to pull back to even with the August peak.
The recent slowdown notwithstanding, Target’s share price growth has dwarfed competitor Walmart’s, which has seen its stock price rise by less than 1% over the past 12 months. The company has set a high bar for itself, and that piles up the pressure from investors for more, more, more. For Target, getting a share price bump may depend on how big a beat it can report on revenue and profits.
Of 31 analysts covering Target, 23 have given the stock a Buy or Strong Buy rating and seven others rate the shares at Hold. At a price of around $267, the upside potential based on a median price target of $285 is 6.7%. At the high price target of $320, the upside potential is 13%.
The consensus third-quarter revenue estimate is $24.58 billion, down 2.3% sequentially and up 8.6% year over year. Adjusted EPS are forecast at $2.80, down 23% sequentially and up by a penny year over year. For the full year, analysts expect Target to report EPS of $13.03, up 38.4%, on sales of $104.48, up 11.7%.
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Target’s share price to earnings multiple for the 2022 fiscal year is 20.5. For the 2023 fiscal year, the multiple to estimated EPS of $12.97 is 20.6, and for 2024, it is 19.1 times estimated EPS of $15.46. The stock’s 52-week range is $160.51 to $267.84. The high was posted early Monday morning. Target pays an annual dividend of $3.60 (yield of 1.38%).
TJX Companies
TJX Companies Inc. (NYSE: TJX) operates around 3,000 retail stores worldwide under well-known names like T.J. Maxx, Marshall’s and HomeGoods. The company’s stock has risen by about 19% over the past 12 months but has stalled since the beginning of the year, adding just 4% so far in 2021. TJX’s outlook for the 2021 holiday season will play a big role in how the stock moves after the earnings report is released. The company reports third-quarter results early Wednesday.
Of 25 analysts covering the company, 21 have a Buy or Strong Buy rating on the stock, and three more rate the shares at Hold. At a price of around $70, the upside potential based on a median price target of $84 is 20%. At the high price target of $101, the upside potential is 44%.
Third-quarter revenue is forecast to come in at $121.24 billion, which would be 1.4% higher sequentially and up 21% year over year. Adjusted EPS are pegged at $0.81, up 26.5% sequentially and 14% year over year. For the fiscal year ending in January 2022, analysts expect EPS of $2.92, up more than 1,000%, on sales of 48.13, up 50%.
TJX’s share price to earnings multiple for the 2022 fiscal year is 24.0. For the 2023 fiscal year, the multiple to estimated EPS of $3.40 is 20.6, and for 2024, the multiple is 18.7 times estimated EPS of $3.74. The stock’s 52-week range is $59.12 to $76.16. TJX pays an annual dividend of $1.04 (yield of 1.51%).
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