Earnings Previews: Jabil, Kroger

The broad markets roared higher to start out Tuesday, with the S&P 500 leading the charge with a gain of nearly 0.5%. The Dow Jones industrials and Nasdaq each followed, but only up roughly 0.3%. This comes after the consumer price index (CPI) print for inflation came in lower than expected—in fact, it hit its lowest level in the past two years.

For the month of May, CPI inflation came in at 4.0%, which is just below the consensus estimate of 4.1%. While this is still a historically high number, it does signal a slowdown in the rate of increase of inflation. It also may have implications for what actions the Federal Reserve will take going forward.

The Fed is scheduled for its policy meeting and announcement on Wednesday, where it will decide whether to increase interest rates. However, many analysts are of the same mind that the Fed will hold off in this session as its previous measures to slow inflation have proven effective.

While there is a lot of action taking place on the macro stage, a few companies are reporting earnings later this week and they could prove to be newsworthy as well. Here is a look at a couple of companies reporting results before the markets open on Thursday and what analysts have to say about them.

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Jabil

Jabil Inc. (NYSE: JBL | JBL Price Prediction) will report its fiscal third-quarter financial results. The consensus estimates are calling for $1.87 in earnings per share (EPS) on $8.2 billion in revenue. The same period of last year had $1.72 in EPS on $8.33 billion in revenue.

Of 13 brokerages covering Jabil, five have a Buy or Strong Buy rating and six rate the stock at Hold. At a recent trading price of about $98, the downside potential based on the consensus price target of $96.88 is 1.1%. At the high target of $110, the potential upside is about 12%.

Jabil’s shares trade at 11.7 times expected 2022 EPS, 11.8 times estimated 2023 earnings of $8.37 and 10.8 times estimated 2024 earnings of $9.14 per share. The stock’s 52-week trading range is $48.80 to $100.32. The company pays an annual dividend of $0.32 (yield of 0.3%).

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Kroger

For the most recent Kroger Co. (NYSE: KR) quarterly results, analysts are calling for $1.45 in EPS on $45.22 billion in revenue. The fiscal first quarter of last year had $1.45 in EPS on $44.6 billion in revenue.

Of 25 analysts covering Kroger stock, 14 have Hold ratings. Nine have a Buy or Strong Buy rating and just two rate it at Sell. At a share price of around $47, the upside potential based on the consensus price target of $52.13 is 11.4%. At the high price target of $75.00, the upside potential is 60.5%.

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The stock trades at 11.0 times expected 2023 EPS, 10.4 times estimated 2024 earnings of $4.50 and 10.3 times estimated 2025 earnings of $4.53 per share. The stock’s 52-week trading range is $41.82 to $52.00. Kroger pays an annual dividend of $1.04 (yield of 2.2%).