This week’s earnings include a truckload of retailers. Two Dow Jones industrial stocks (Home Depot and Walmart) both beat expectations Tuesday morning. More retailer reports are due later this week.
After markets closed Monday, Bitfarms, IonQ and Lucid reported quarterly results. IonQ and Lucid saw bump in their share prices while Bitfarms was trading down. After markets close Tuesday and before they open on Wednesday, reports are coming from Lowe’s, Target, TJX and StoneCo.
We already have posted our preview of two tech biggies (Cisco and Nvidia) scheduled to report results after markets close Wednesday.
Here’s a look at three retailers set to report results before markets open on Thursday.
Alibaba
Over the past 12 months, shares of Alibaba Group Holding Ltd. (NYSE: BABA) have lost about 35% of their value. That may be hard to believe for a company that pumped out $84.5 billion in sales in the first 11 days of November, the company’s annual Singles Day promotion. The moral may be that it’s bad for a company’s financial health to get crossways with Xi Jinping.
Singapore’s state-owned investment firm Temasek cut its stake in Alibaba by 16% in the third quarter and made other sales and adjustments following the central government’s rules changes for China-based companies.
Of the 44 analysts covering the company, 41 have ratings of Buy or Strong Buy on the stock. The other three rate the stock at Hold. At a recent price of around $167.10, the upside potential based on a median price target of $242.59 is about 45%. At the high price target of $339.90, the upside potential is 103%.
For Alibaba’s second quarter of fiscal 2022, analysts are expecting revenue of $32.11 billion, which would be up about 0.8% sequentially and nearly 41% higher year over year. Adjusted earnings per share (EPS) are expected to come in at $1.95, down 24% sequentially and 26% lower year over year. For the full fiscal year ending in March 2022, Alibaba is expected to report EPS of $9.26, up almost 650%, on sales of $142.87 billion, up 30.5%.
Alibaba’s share price to earnings multiple for the 2022 fiscal year is 18.0. For the 2023 fiscal year, the multiple to estimated EPS of $10.78 is 15.5, and for 2024, it is 12.8 times estimated EPS of $13.07. The stock’s 52-week range is $138.43 to $280.61. Alibaba does not pay a dividend. Total shareholder return for the past year is negative 35.4%.
24/7 Wall St.Kohl’s
Department store operator Kohl’s Corp. (NYSE: KSS) has posted a 12-month share price increase of about 142%. But that’s about 8% below its peak in mid-May. The shares have added more than 26% since the end of October, helped along by the big beat that rival Dillard’s posted last week. The store also has faced pressure to spin off the e-commerce business that now accounts for around a third of its revenue and to use the money raised to reduce debt, increase buybacks and invest more in e-commerce growth.
Of 17 analysts covering Kohl’s stock, seven rate the shares at Buy and eight have a Hold rating. The other two have Sell and Strong Sell ratings. At a price of around $58.20, the upside potential based on a median price target of $64 is 10%. At the high price target of $82, the upside potential is about 41%.
For the retailer’s third quarter of fiscal 2022, analysts are looking for revenue of $4.28 billion, up 1.3% sequentially and 13.2% year over year. Adjusted EPS are forecast at $0.70, down 72% sequentially but up from $0.01 in the year-ago quarter. For the full fiscal year ending in January, analysts currently forecast EPS of $6.14, compared to a year-ago loss of $1.21, on sales of $18.56 billion, up 23.5%.
Kohl’s share price to earnings multiple for the 2022 fiscal year is 9.5. For the 2023 fiscal year, the multiple to estimated EPS of $5.90 is 9.9, and for 2024, it is 9.2 times estimated EPS of $8.90. The stock’s 52-week range is $25.38 to $64.80. Kohl’s pays an annual dividend of $1.00 (yield of 1.74%). Total shareholder return for the past year was 125%.
24/7 Wall St.Macy’s
Shares of Macy’s Inc. (NYSE: M) have added about 330% over the past 12 months. Like Kohl’s, Macy’s is faced with activist investors demanding that the company spin off its e-commerce business and use the proceeds to buy back more shares and distribute more to shareholders.
While both retailers did see surges in their e-commerce business during the pandemic lockdowns, now that brick-and-mortar stores are reopening, business in physical retail is picking up again. The question Macy’s has to answer is where will future growth come from, e-commerce or more physical stores?
Only three of 17 analysts rate Macy’s stock as a Buy, and none has a Strong Buy rating on the stock. Another eight rate the shares at Hold, and six have Sell or Strong Sell ratings. At a price of around $31.50, the stock trades well above its median price target of $16.15. Based on a high price target of $37, the potential upside on the shares is 17.5%.
Analysts are forecasting third-quarter fiscal 2022 revenue of $5.22 billion, down 7.6% sequentially but up about 31% year over year. Adjusted EPS are tabbed at $0.33, down 75% sequentially but up from a year-ago loss of $0.19 in the quarter. For the full fiscal year ending in January, analysts are currently looking for EPS of $3.91, compared to last year’s loss of $2.21 per share, on sales of $23.88 billion, up 37.7%.
Macy’s share price to earnings multiple for the 2022 fiscal year is 8.0. For the 2023 fiscal year, the multiple to estimated EPS of $3.36 is 9.3, and for 2024, it is 9.6 times estimated EPS of $3.26. The stock’s 52-week range is $7.74 to $31.96. Macy’s pays an annual dividend of $0.60 (yield of 1.97%). Total shareholder return for the past year was around 295%.
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