Investing

Earnings Previews: Campbell Soup, Express, Stitch Fix, W&T Offshore, Zim Integrated Shipping

Paul Ausick

Published: March 7, 2022 12:03 pm

The number of companies reporting earnings this week begins the end-of-season drop before the next one begins in mid-April. That does not mean that nothing is happening. There are a couple of biggies coming (Campbell Soup and Oracle) along with some new favorites (CrowdStrike and Rivian).

The broad markets opened somewhat lower Monday morning, but well off their premarket lows. Crude oil, which traded above $125 a barrel very early in the morning, was last seen at around $118. Reports that the United States and its sanctions partners are considering a ban on importing Russian oil drove crude prices higher and shares of oil producers much higher. Both have moderated following reports of a Thursday meeting between Ukrainian and Russian foreign ministers in Turkey.

We already have previewed four firms reporting quarterly earnings after markets close Monday or before they open on Tuesday: Dick’s Sporting Goods, Lithium Americas, 908 Devices and Petco.

Here is a look at five companies set to report results after markets close Tuesday or before they open on Wednesday.

Campbell Soup

Over the past 12 months, shares of Campbell Soup Co. (NYSE: CPB) are up about 2.7%, while the consumer staples sector has gained about 22%. The company is not a growth stock, but it does pay a robust dividend, and the dividend is fully paid out of operating income. Even net income is more than double dividend payments. Campbell Soup reports results before markets open Wednesday.

Sentiment on the stock is mixed, with 12 of 19 brokerages giving the stock a Hold rating. Just three have a Buy or Strong Buy rating, and the rest rate the stock a Strong Sell. At a recent price of around $45.00 a share, the stock trades right at its median price target. At the high price target of $51, the upside potential is about 13.3%.

For the company’s second quarter of fiscal 2022, the consensus revenue estimate is $2.25 billion. That would be up by less than 1% sequentially and down about 1.3% year over year. Adjusted earnings per share (EPS) are forecast at $0.68, up 23.4% sequentially and down 20% year over year. For the full fiscal year, current estimates call for EPS of $2.78, down 6.6%, on sales of $8.42 billion, down by less than 1%.

Campbell Soup stock trades at 16.1 times expected 2022 EPS, 15.5 times estimated 2023 earnings of $2.90 and 14.7 times estimated 2024 earnings of $3.06 per share.

The stock’s 52-week range is $39.76 to $52.23. The company pays an annual dividend of $1.48 (yield of 3.30%). Total shareholder return for the past year was negative 0.44%.

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Apparel retailer Express Inc. (NYSE: EXPR) has added nearly 82% to its share price over the past 12 months. For the year to date, shares are up almost 45%. The shares spiked in last year’s meme stock runup, adding around 900% before falling back. Since touching a post-meme stock low in late February of 2021, the shares are up about 95%. The company reports results before markets open on Wednesday.

The stock is barely covered by brokerage houses. Just two have ratings on the stock, and both are Hold. At a share price of around $4.50, the stock trades at its current median and high price targets.

For the fourth quarter of fiscal 2022, Express is expected to report revenue of $602.95 million, up nearly 28% sequentially and 40% year over year. Analysts expect adjusted EPS of $0.07 per share for the quarter, down 58.8% sequentially and better than the loss per share of $0.66 in the year-ago quarter. For the full fiscal year that ended in January, the loss per share is forecast at $0.26, down from a loss per share of $4.86 in fiscal 2021. Sales for the year are forecast to rise by 55.4% to $1.88 billion.

At the current share price, the stock’s multiple to estimated 2023 EPS is 22. No other estimates are available. The stock’s 52-week range is $2.30 to $18.67, and Express does not pay a dividend. Total shareholder return in the past year was 78.5%, thanks to that late February spike.

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Stitch Fix

Online apparel retailer Stitch Fix Inc. (NASDAQ: SFIX) has seen its stock price drop by about 85% over the past 12 months. In December, the company reported a smaller-than-expected loss and beat on revenues, but it also cut sales guidance, citing supply chain issues and a campaign to attract new users. How investors react to quarterly earnings this time depends on how successful Stitch Fix has been at handling the supply chain problems and its success at attracting new customers. The company reports second-quarter fiscal 2022 results after the closing bell on Tuesday.

Analysts are mixed on the stock, with 11 of 16 rating the shares at Hold and three more at Buy. At a share price of around $10.70, the upside potential based on a median price target of $23.00 is 115%. At the high target of $40.00, the upside potential is 274%.

Fiscal second-quarter revenue is forecast at $514.89 million, down 11.4% sequentially but up 2.1% year over year. Stitch Fix is expected to post an adjusted per-share loss of $0.24, compared to a loss of $0.02 in the prior quarter and a loss of $0.20 per share a year ago. For the full fiscal year, the adjusted net loss is currently forecast at $0.77, worse than last year’s loss of $0.08 per share. Full-year revenue is forecast at $2.27 billion, up 8.3% compared to the prior year.

Stitch Fix is not expected to post a profit in 2022 or 2023. The share price to earnings multiple for 2024 based on a full-year EPS of $0.74 is 47.2. The stock’s 52-week range is $10.63 to $75.78. The low was posted earlier in the morning. Stitch Fix does not pay a dividend, and the total shareholder return for the past year is negative 85.3%.

W&T Offshore Inc. (NYSE: WTI) is a producer of oil and natural gas on the U.S. continental shelf in the Gulf of Mexico. Over the past 12 months, the stock has added 44.4% to its share price, all of it in the past two weeks. During that period, shares have traded at nearly double their average 30-day volume. W&T’s market cap is nearing $1 billion for the first time in about three years. High and rising oil prices can do that. The company reports quarterly results on Tuesday after the markets close.

This is another lightly tracked stock, with just two analysts covering the shares. One has given the stock a Buy rating and the other a Strong Buy rating. At a share price of around $6.70, the upside potential is 3.7% based on a median price target of $6.95. At the high target of $7.40, the upside potential is 10.4%.

For the company’s fourth quarter of fiscal 2021, the consensus revenue estimate is $144.98 million, up by 8.2% sequentially and by 53% year over year. Adjusted EPS are forecast at $0.09, up from flat sequentially and from a loss per share of $0.05 year over year. For the full fiscal year, current estimates call for EPS of $0.23, compared to last year’s loss of $0.16 per share, on sales of $537.19 million, up by 55%.

W&T Offshore stock trades at 28.8 times expected 2022 EPS, 6.3 times estimated 2023 earnings of $1.05 and 5.3 times estimated 2024 earnings of $1.25 per share. The stock’s 52-week range is $2.64 to $6.68. The high was posted earlier in the morning The company does not pay a dividend. Total shareholder return for the past year was 44.3%.

Zim Integrated Shipping

Shares of Zim Integrated Shipping Inc. (NYSE: ZIM) have added about 300% over the past 12 months. The Israel-based company provides container shipping internationally, as well as in Israel, and has seen a surge in demand and pricing since coming public in January of last year. The company reports results first thing Wednesday morning.

It remains to be seen what effect President Biden’s remarks last week will have on shipping companies. In his State of the Union address, Biden announced a  crackdown on “foreign-owned [shipping] companies [that have] raised prices by as much as 1,000% and made record profits.” Since those remarks, Zim’s stock fell then rose, and, at last look, traded about flat with its pre-speech level.

Of eight brokerages covering the company, five have a Buy rating, two have rated the shares at Hold and the other has a Strong Sell rating on the stock. At a share price of around $69.70, the upside potential based on a median price target of $85.00 is 22%. At the high target of $100.00, the upside potential is 43.4%.

For the company’s fourth quarter of fiscal 2021, the consensus revenue estimate is $3.37 million, up by 7.3% sequentially and by 148% year over year. Adjusted EPS are forecast at $13.20, up 8.5% sequentially and 280% higher year over year. For the full fiscal year, current estimates call for EPS of $38.28, up 674%, on sales of $10.63 billion, up by 166%.

Zim stock trades at 1.8 times expected 2021 EPS, 2.1 times estimated 2022 earnings of $33.63 and 6.1 times estimated 2023 earnings of $11.46 per share. The stock’s 52-week range is $18.70 to $75.33. The high was posted last Friday. The company pays an annual dividend of $2.50 (yield of 14.30%). Total shareholder return for the past year was 298.7%.