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Earnings Previews: Best Buy, Bilibili, Canadian Natural Resources, Kroger
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U.S. markets continue to be attuned to developments in Europe and Ukraine and what they could mean going forward. Energy stocks continue to trade higher, as crude oil prices continue rising (up about 7% currently) while financial stocks are threatened by a Russian ban on foreign companies from dumping their investments in the country.
Electric vehicle maker Lucid traded down about 14.3% Tuesday morning and another EV maker that reported results late Monday, Canoo, traded down about 1.2%. Velodyne Lidar beat expectations on both the top and bottom lines but issued downside revenue guidance for the first quarter and traded down about 1.6%.
We already have previewed five earnings reports due out after markets close Tuesday (AMC, Nio, Nordstrom, Salesforce and SoFi) three due to report first thing Wednesday morning (Abercrombie & Fitch, Dollar Tree and Lithium Americas) and three more due to release results after markets close Wednesday (Coupang, Snowflake and Splunk.)
Here is a look at four companies scheduled to report quarterly results before Thursday’s opening bell.
Best Buy
Over the past 12 months, shares of technology retailer Best Buy Co. Inc. (NYSE: BBY) could do no better than remain essentially flat. Since late November when shares traded up about 40%, the shares have dropped more than 29%. The stock hit its 52-week low last week. Investors and analysts will be paying close attention to a promised update on strategic initiatives and guidance during Thursday’s conference call.
Analysts have mixed sentiments on the stock. Of 29 brokerages covering the company, 13 rate the shares at Hold and an equal number have Buy or Strong Buy ratings. At a recent price of around $97.25 a share, the upside potential based on a median price target of $116.00 is 19.3%. Based on a high price target of $155, the upside potential is almost 59%.
For the company’s fiscal 2022 fourth-quarter revenue, analysts are forecasting $16.57 billion, which would be up 39% sequentially but down 2% year over year. Adjusted earnings per share (EPS) are forecast at $2.71, up 30.3% sequentially and 22.1% lower year over year. For the full fiscal year that ended in January, current estimates call for EPS of $9.99, up 26.3%, on sales of $51.95 billion, up 9.9%.
The stock trades at 9.8 times expected 2022 EPS, 10.6 times estimated 2023 earnings of $9.25 and 9.7 times estimated 2024 earnings of $11.22 per share. The stock’s 52-week range is $85.58 to $141.97. Best Buy pays an annual dividend of $2.80. Total shareholder return for the past year is negative 1.54%.
Bilibili
Bilibili Inc. (NASDAQ: BILI) offers gaming, video and live broadcasting platforms for children and teens in the People’s Republic of China. Over the past year, its shares have dropped by more than 74%. The government’s regulatory battles with the country’s tech companies have taken a toll on Bilibili as it has on all the others. In early February, a content moderator for the company died at his desk. The death once again raised questions about China’s work culture. The company has promised to add 1,000 content moderators (censors) to its current total of more than 2,400 monitors.
The vast majority (30 of 35) brokers rate the stock a Buy or Strong Buy, with the rest having a Hold rating. At a share price of around $32.70, the upside potential based on a median price target of $89.48 is 174%. At the high target of $131.31, the implied upside is a whopping 300%.
The consensus estimates call for fourth-quarter revenue of $911.79 million, up nearly 13% sequentially and 55% higher year over year. Analysts forecast an adjusted loss per share of $0.67, slightly worse than the prior quarter’s loss per share of $0.65 and considerably worse than the year-ago loss of $0.29 per share. For full fiscal 2021, analysts are expecting Bilibili to post a per-share loss of $2.24, compared to a loss last year of $1.14, on sales of $3.07 billion, up nearly 67%.
Bilibili is not expected to post a profit in 2021, 2022 or 2023. The stock trades at a 2021 sales to enterprise value multiple of 3.3 times. The estimated multiple for 2022 is 2.3 and for 2023 it is 1.8. The stock’s 52-week range is $28.01 to $145.91. Total shareholder return for the past year is negative 77.8%.
Canadian Natural Resources
Calgary-based oil and gas producer Canadian Natural Resources Ltd. (NYSE: CNQ) has seen its share price rise by about 115% over the past 12 months. That’s not a big surprise given the rising prices for both oil and gas. In late January, the stock’s total return to shareholders was around 80% for the prior 12 months. That return is 30% higher currently. About the only suspense for investors is whether the company decides to raise its dividend or buy back more stock.
Of 23 analysts covering the company, seven rate the shares at Hold and the remaining 16 have a Buy or Strong Buy rating. At a share price of around $55.95, the stock has outrun its median price target of $54.17. Shares also trade above the high price target of $54.78.
Fourth-quarter revenue is forecast at $6.75 billion, up almost 11% sequentially and 34.5% year over year. Adjusted EPS are forecast at $1.64, or 33.3% higher sequentially and up from just $0.12 year over year. For full fiscal 2021, analysts are looking for EPS of $4.76, up from a year-ago loss of $0.50 per share, on sales of $23.56 billion, up 77.5%.
The stock trades at 11.7 times expected 2021 EPS, 9.7 times estimated 2022 earnings of $5.75 and 10.3 times estimated 2023 earnings of $5.42 per share. The stock’s 52-week range is $27.71 to $56.88, and the high was posted earlier in the morning. Canadian Natural Resources pays an annual dividend of $1.45 (yield of 2.87%). Total shareholder return for the past year is about 104%.
Kroger
Grocery store operator Kroger Co. (NYSE: KR) has added about 51% to its share price over the past 12 months. The company’s efforts to improve its digital channel are paying off, according to Telsey Advisory analyst Joseph Feldman, who raised his rating on the stock to Outperform and his price target to $54 Tuesday morning. Kroger expects fiscal 2023 (which began on February 1) to include $20 billion in revenue, an amount equal to about 15% of expected total revenue for the 2022 fiscal year.
Of 27 analysts covering the stock, 15 have a Hold rating on the shares. The other 12 are evenly divided by Buy/Strong Buy and Sell/Strong Sell ratings. At a share price of around $47.70, the stock has outrun its median price target of $46.00. At the high price target of $56.00, the upside potential is 17.4%.
Fourth-quarter revenue is forecast at $32.62 billion, up about 2.4% sequentially and 8.0% year over year. Adjusted EPS are tabbed at $0.74, down 5.6% sequentially and 8.6% year over year. For the full 2022 fiscal year that ended in January, Kroger is expected to post EPS of $3.52, up 1.4%, on sales of $137.27 billion, up 3.6%.
The stock trades at 13.5 times expected 2022 EPS, 13.8 times estimated 2023 earnings of $3.44 and 13.5 times estimated 2024 earnings of $3.54 per share. The stock’s 52-week range is $32.00 to $50.15. Kroger pays an annual dividend of $0.74 (yield of 1.76%). Total shareholder return for the past year is 47.6%.
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