Investing

Earnings Previews: Tilray, SunPower, Barrick and Walmart

The holiday-shortened week’s earnings reports were set to kick-off with oil and gas independent producer Occidental, but the severe winter weather in Texas forced the company to postpone its report until Monday, February 22. Other oil and gas independents may be forced to follow suit later in the week.

More than 400 companies were scheduled to report quarterly results this week, so there will still be plenty to prepare for and talk about. Here’s a preview of three that will report earnings Wednesday after markets close and one scheduled to report earnings before markets open Thursday.

Tilray

Marijuana grower Tilray Inc. (NASDAQ: TLRY) reports after the bell on Wednesday. Last week the company announced that it had struck a deal to import and distribute medical cannabis products in the United Kingdom. The stock jumped 40% on the news and hit a 12-month high of $67 before cooling off to trade at around $30 Tuesday morning.

That new high was still well short of Tilray’s all-time high of nearly $150 posted about two months after its August 2018 IPO. Once the pot stocks started dropping late in 2018, they didn’t stop until late March of last year.

Analysts are expecting Tilray to report a net loss per share of $0.15 for the quarter, far better than the loss of $2.14 in the year-ago quarter. For the fiscal year, Tilray is expected to lose $2.40 per share, better by a third than its loss in 2019. Quarterly revenue is expected to increase by 19% and annual revenue by 25%.

Shares currently trade at about 19 times expected 2020 sales and 14 times expected 2021 sales. Earnings estimates are negative for 2020, 2021 and 2022.

SunPower

SunPower Corp. (NASDAQ: SPWR) also reports earnings late Wednesday. In calendar year 2020, the stock appreciated by 400%, after peaking at 525% just before Christmas. Since the beginning of the year, only one broker (Goldman Sachs) has put a Buy rating on the stock; five others have rated the stock as Neutral and one (Morgan Stanley) downgraded the shares from Equal Weight to Underweight.

With the stock currently trading around $50, and a consensus price target at half that level, SunPower may be seriously overvalued.

SunPower is expected to post quarterly EPS of $0.07, less than a third of its year-ago total, and a net loss for the year of $0.41 per share, compared to loss in 2019 of $0.29 per share. Revenue is forecast down 41% for the quarter and for the year.

Using estimated EPS of $0.34 for fiscal year 2021, the stock trades at 142 times expected earnings and 66 times expected 2022 EPS.

Barrick Gold

Barrick Gold Corp. (NYSE: GOLD) is the third company set to report earnings late Wednesday. The share price has risen by about 7.6% in the past 12 months but has dropped 19% since early November.

Demand for gold in the fourth quarter was at its lowest since the second quarter of 2008, with demand for the year down 14%. Central bank purchases of gold fell 59% compared to 2019. Gold prices have come down by around 5% since the beginning of the year. The COVID-19 pandemic also hurt mine production last year.

Analysts expect Barrick to report EPS of $0.31 for the quarter, up 82% year over year, with revenue totaling $3.26 billion, or 13% higher. For the full year, EPS is estimated at $1.14, more than double 2019’s total of $0.51. Revenue is expected to rise by 29% to $12.5 billion. Barrick’s stock trades at around 19 times expected 2020 EPS and 16 times expected 2021 EPS.

Walmart

Walmart Inc. (NYSE: WMT) is expected to report quarterly and fiscal year results before markets open Thursday. The company typically sets the stage for other retailers, so expect to hear from another Dow Jones industrials component, Home Depot, along with Lowe’s and Best Buy next week, as well as Target, Nordstrom and Kohl’s the week after that.

Walmart’s share price rose by 23% in 2020 but has stalled this year. Earlier this month the potential buyers for Walmart’s Asda chain ran into some difficulties with regulators and raising cash for the $8.8 billion buyout of the U.K. grocery store chain.

Analysts expect Walmart to post EPS of $1.50, up 8.7% year over year, on sales of $148.3 billion (up 4.7%). For the 2021 fiscal year ended in January, analysts expect EPS of $5.59 and sales of $555.3 billion. That represents an increase of 13.3% in EPS and 6% in sales.

The $162.75 consensus price target on the stock implies a potential upside of nearly 12% to the current share price of around $145.40. The stock trades at 26 times expected 2021 earnings and 25 times expected 2022 EPS.