Investing

Earnings Previews: American Eagle Outfitters, Marvell, Snowflake, Kroger, Michaels

WendellandCarolyn / Getty Images

As earnings season winds down, there are still some interesting companies left to report. Many retailers are reporting results for the quarter that ended in January, and there are a few tech companies on the schedule as well.

Looking ahead, after markets close today, we are scheduled to receive earnings reports from Box, fuboTV, HP Enterprise and Nordstrom, and before markets open Wednesday, Dollar Tree is expected to report results.

Among the stocks that reported after markets closed Monday and before they reopened Tuesday morning, Singapore-based Sea has made the biggest positive noise, even though the company missed estimates by a fair bit.

After markets close on Wednesday we are scheduled to get three earnings reports, followed by two before markets open Thursday morning.

American Eagle Outfitters

American Eagle Outfitters Inc. (NYSE: AEO) is a specialty retailer of clothing for young men and women at more than 1,000 stores across the United States under the American Eagle, Aerie and Todd Snyder New York brands. The company posted a share price increase of almost 39% in 2020, even following a plunge of more than 50% related to the coronavirus pandemic. The company is set to report after markets close Wednesday.

Since late January, a host of analysts have boosted their price targets on the stock, and most have the equivalent of a Buy rating. The consensus 12-month price target on the stock is $27.31, about 6% above the current trading price of around $25.60. At the high price target of $31, the potential upside is more than 21%.

Analysts expect American Eagle to post earnings per share of $0.36 for the quarter, along with a net loss per share of $0.08 for the full year. Fourth-quarter revenue is forecast at $1.28 billion, while full-year sales are pegged at $3.75 billion. All the estimates are lower than posted results for the same periods a year ago.

Based on estimated EPS for fiscal 2022, which began last month, the stock trades at a multiple of 18, while the multiple is around 15 for estimated 2023 earnings.

Marvell Technology

This is a designer and supplier of a variety of analog and signal processing semiconductors used in a variety of technology products. Marvell Technology Group Ltd. (NASDAQ: MRVL) shares added about 80% last year, but growth has slowed to only about 2% so far in 2021.

Since the beginning of the year, four analysts have raised their price target on the stock and all held their Buy ratings. At a current trading price of around $48.25, the potential upside to the consensus price target of $53.50 is nearly 11%. At a high target of $64.00, the potential upside is almost 33%.

Consensus estimates call for fourth-quarter EPS of $0.29 on sales of $794.3 million and full-year EPS of $0.92 on sales of nearly $3 billion. Revenue projections are around 11% higher than actual results for last year, and EPS estimates are 70% higher for the quarter and nearly 40% higher for the year.

The stock is richly valued at 52 times expected fiscal 2021 earnings, 35 times expected 2022 earnings and 27 times 2023 estimated EPS.


Snowflake

Between its September 2020 IPO and early December, Snowflake Inc. (NYSE: SNOW) saw its share price jump by more than 50%. However, the stock closed the year up a more modest 11%, and it has trailed down to post a dip of 2.8% so far in 2021. Like American Eagle and Marvell, Snowflake reports results after markets close Wednesday.

While price targets have been raised at some brokerages, ratings on the cloud-based data platform provider remain closest to the equivalent of Hold. The stock traded at around $273.00 recently and, using a consensus price target of $309.61, shares have a potential upside of more than 13%. At the high price target of $515, the potential upside is an eye-watering 89%.

The consensus analyst estimates call for a loss per share of $0.17 for the quarter and a loss of $0.92 for the 2021 fiscal year that ended in January. Quarterly revenue is forecast at $178.5 million and full-year revenue at $580 million. The company is not expected to post a profit at least through the 2023 fiscal year.

Kroger

Kroger Co. (NYSE: KR) is the nation’s largest independent grocery store chain, with a market cap of more than $25 billion. Shares added nearly 12% last year and traded up another 3.4% so far this year. Kroger is scheduled to report earnings Thursday morning.

Since January, four brokerages have weighed in on Kroger, with downgrades either from Neutral/Equal Weight to Underperform or from Outperform to Market Perform. Three of the five ratings posted since January lowered the price targets. With shares currently trading at around $32.66, the potential upside on the stock’s consensus price target of $34.67 is around 6%. At the high price target of $41.00, the potential upside is around 24%.

Analysts have a consensus EPS estimate of $0.69 for the quarter, on sales of $30.9 billion. For the full year that ended in January, analysts are looking for EPS of $3.36 on sales of $132.7 billion. All these estimates are above last year’s actual totals for the same periods.

At the current price, shares trade at a multiple of about 10 times expected 2021 earnings and 12 times expected 2022 and 2023 EPS.

Michaels

Michaels Companies Inc. (NASDAQ: MIK) operates more than 1,200 arts and crafts specialty retail stores in the United States and Canada. Its shares rose by nearly 61% last year as people who were remaining in their homes to help stop the spread of COVID-19 had a lot more time on their hands. The stock has added another 36% so far in 2021, and investors are expecting a blowout quarter for the company.

The consensus forecasts call for EPS of $1.45 on sales of $1.83 billion for the quarter and EPS of $2.21 on sales of $5.2 billion for the fiscal year, which ended in January. All estimates are higher than actual reported numbers for the same periods last year. Only three firms have issued ratings on the stock since early December, and two of those were downgrades.

The recent share price of around $17.80 is already $3.50 a share higher than the consensus price target of $14.30. The stock posted a new 52-week high of $18.99 earlier Tuesday and promptly dropped back. At the high price target of $25, the potential upside at the current price is around 40%.

Michaels’ stock trades at around eight times expected 2021 and 2022 EPS.

Essential Tips for Investing: Sponsored

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.