Investing

Earnings Previews: Adobe, General Mills, JinkoSolar, PagSeguro, Winnebago

Paul Ausick

Published: March 21, 2022 12:05 pm

There are relatively few earnings reports due out this week, and even fewer that generate a lot of investor interest (which we define as an average daily trading volume of around 2 million or more shares). Few doesn’t mean there are none, however.

Chinese agricultural products platform Pinduoduo reported quarterly results Monday morning that missed both earnings and revenue estimates, but the stock traded up more than 5% shortly after Monday’s opening bell.

After markets close on Monday, Nike and Tencent Music are on deck for earnings, with Carnival Cruise Lines and Chinese gaming platform Huya set to report on Tuesday morning. We have already taken a look at what to expect from these reports

Here we feature five companies set to report quarterly after markets close Tuesday or before markets open on Wednesday.

Adobe

Software maker Adobe Inc. (NASDAQ: ADBE) is expected to report fourth-quarter fiscal 2021 results after Tuesday’s closing bell. Over the past 12 months, the stock has added just 2.2% to its share price, including a drop of about 22% in late November. Last week, Adobe added a feature to its Behance creative showcase platform that allows artists to connect their Behance accounts to a Phantom wallet and show off their Solana NFTs in their account profiles. Behance already has the ability to display its work on Ethereum’s blockchain.

Of 32 analysts covering the stock, 26 have given the shares a Buy or Strong Buy rating, and the other six have Hold ratings. At a recent price of around $450.50 a share, the upside potential based on a median price target of $640.00 is 42%. At the high target of $750, the upside potential is nearly 67%.

Fiscal first-quarter revenue is forecast at $4.24 billion, which would be up 3.1% sequentially and 8.4% higher year over year. Adjusted earnings per share (EPS) are forecast at $3.34, up 4.5% sequentially and 6.4% year over year. For the full fiscal year ending in November, analysts are currently forecasting EPS of $13.78, up 10.4%, on sales of $17.93 billion, up 13.6%.

Adobe stock trades at 32.6 times expected 2022 EPS, 27.7 times estimated 2023 earnings of $16.26 and 24.1 times estimated 2024 earnings of $18.70 per share. The stock’s 52-week trading range is $407.94 to $699.54. Adobe does not pay a dividend. Total shareholder return for the past year was 2.1%.

General Mills

Shares of food products giant General Mills Inc. (NYSE: GIS) have added about 8.3% over the past 12 months, including a drop of nearly 10% since mid-January. The company is set to report results first thing Wednesday morning.

General Mills has suspended its marketing and capital investment in Russia, a move expected to nick less than 1% off its sales. The company’s Russian business is a joint venture with Nestle. While General Mills will feel the effect of rising raw materials costs, the company has sufficient pricing power to pass along at least some of that to consumers, but the impact on earnings will be noticeable.
Sentiment on the stock is muted. Of 20 analysts covering the shares, 13 have a Hold rating and only four rate the stock at Buy or Strong Buy. The stock trades at around $63, implying an upside of 4.8% based on a median price target of $66.00. At the high target of $74, the implied upside is 17.5%

Third-quarter fiscal 2022 revenue is forecast at $4.54 billion, down 9.2% sequentially but up 4.1% year over year. Adjusted earnings per share (EPS) are forecast at $0.78, down 21% sequentially and about 4.9% lower year over year. The current estimates for the fiscal year ending in May call for EPS of $3.74, down 1.3%, on sales of $18.81 billion, up 3.8%.

General Mills stock trades at 16.9 times expected 2022 EPS, 16.2 times estimated 2023 earnings of $3.90 and 15.3 times estimated 2024 earnings of $4.11 per share. The stock’s 52-week range is $56.67 to $69.95. General Mills pays an annual dividend of $2.04 (yield of 3.23%). Total shareholder return for the past year was 8.5%.

JinkoSolar

Solar module maker JinkoSolar Holding Co. Ltd. (NYSE: JKS) has added about 15.5% to its share price over the past 12 months. The company’s stock has bounced around between a 45% gain and a 30% decline since last March. Since last Monday, the stock has added 30% to its share price on reports that demand for solar energy will increase significantly while fossil fuel prices remain high. The question going forward is whether strong demand will continue. Its quarterly results are anticipated before markets open on Wednesday.

Of eight analysts covering the company, three have a Hold rating on the shares and four have a Buy or Strong Buy rating. At a share price of around $50.00, the upside potential based on a median price target of $55.50 is 11%. The upside potential based on the high price target of $74.53 is 51%.

Fourth-quarter revenue is forecast at $2.14 billion, up nearly 61.0% sequentially and 48.6% year over year. Adjusted EPS are forecast at $0.90, up 1,700% sequentially and more than 700% year over year. For full fiscal 2021, analysts are looking for EPS of $1.80, down about 45%, on sales of $5.62 billion, up 9.9%.

JinkoSolar stock trades at 27.7 times expected 2021 EPS, 12.2 times estimated 2022 earnings of $4.10 and 10.7 times estimated 2023 earnings of $4.65 per share. The stock’s 52-week range is $28.39 to $66.37. JinkoSolar does not pay a dividend. Total shareholder return for the past year was 14.3%.

PagSeguro

Since coming public in January of 2018, Brazil-based fintech company PagSeguro Digital Ltd. (NYSE: PAGS) has seen its stock price soar to more than $62 and plummet to less than $12 just last week. Other Brazilian fintechs that soared before falling include recently public Nu Holdings and StoneCo. All three trade down by at least 17% so far in 2022, and PagSeguro trades down about 34% as of Monday morning.
New reserve requirements for fintech equaling requirements for the country’s large financial institutions are the primary reason for the recent declines in share prices. PagSeguro reports quarterly results after markets close on Thursday.

Of 18 analysts covering the company, eight have a Hold rating on the shares and 10 have a Buy or Strong Buy rating. At a share price of around $17.25, the upside potential based on a  median price target of $33.84 is about 96%. The upside potential based on the high price target of $61.73 is about 258%.

Fourth-quarter revenue is forecast at $620.55 million, up nearly 20% sequentially and by more than a third year over year. Adjusted EPS are forecast at $0.26, up 12.4% sequentially and a penny higher year over year. For full fiscal 2021, analysts are looking for EPS of $0.88, down about 5.6%, on sales of $2.04 billion, up 55.7%.

PagSeguro stock trades 19.5 times expected 2021 EPS, 16.5 times estimated 2022 earnings of $1.04 and 11.1 times estimated 2023 earnings of $1.55 per share. The stock’s 52-week range is $11.76 to $61.65. PagSeguro does not pay a dividend. Total shareholder return for the past year was negative 64.2%.

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Winnebago

Recreational vehicle maker Winnebago Industries Inc. (NYSE: WGO) has dropped about 24.5% of its value over the past 12 months. Over the past two years, the share price has added more about 185%, posting an all-time high in March of last year. The company enjoyed a boom over the past two years as consumers purchased RVs at a record pace in an effort to enjoy some freedom from travel restrictions.

Winnebago’s market share growth is being challenged by competitors, and materials costs and availability continue to stress pricing. The company reports quarterly results early Wednesday morning.

Of 10 analysts covering the stock, seven rate the shares at Buy or Strong Buy and the other three have a Hold rating. At a share price of around $60.60, the upside potential to a median price target of $85 is 40.2%. At the high price target of $115, the upside potential is nearly 90%.

Fiscal second-quarter revenue is forecast at $1.10 billion, down 4.7% sequentially but up 19.2% year over year. Adjusted EPS are forecast at $2.91, down 17.1% sequentially and up 37.3% year over year. For full fiscal 2022 ending in August, current estimates call for EPS of $11.97, up 40%, on sales of $4.6 billion, up 26.6%.

Winnebago stock trades at 5.1 times expected 2022 EPS, 5.9 times estimated 2023 earnings of $10.31 and 9.8 times estimated 2024 earnings of $6.20 per share. The stock’s 52-week range is $56.58 to $85.44. Winnebago pays an annual dividend of $0.54 (yield of 1.18%). Total shareholder return for the past year was negative 24.6%.