Earnings Previews: Academy Sports, Dollar General, Dollar Tree, Xpeng

Monday evening’s and Tuesday morning’s earnings announcements from Best Buy, Medtronic, Palo Alto Networks and Pinduoduo all beat expectations. An expected announcement from Chinese tutoring firm New Oriental Education did not materialize.

After markets close Tuesday, we will hear from three firms: Nordstrom, Intuit and Heico. Before the markets open on Wednesday, Dick’s Sporting Goods and Express are scheduled to report quarterly results.

We already have posted our look at four enterprise software companies reporting results after markets close on Wednesday: Pure Storage, Salesforce, Snowflake and Splunk.

Here is a look at four notable reports due before markets open Thursday.

Academy Sports

Sporting gear retailer Academy Sports and Outdoors Inc. (NASDAQ: ASO) has seen its share price nearly triple since its October 2020 IPO. Since late June, however, the stock is down more than 8%, likely due to the impact of added coronavirus infections. Even after the recent dip, Jim Cramer said recently that he thought the stock was “inexpensive” and that he’d “be a buyer.”

Of 10 brokerages covering the firm, nine rate the stock a Buy or Strong Buy. At a recent price of $38.90 and a median price target of $45, the upside potential is about 15.7%. At the high price target of $50, the upside potential is about 28.5%.

Analysts expect Academy Sports to report second-quarter 2022 adjusted earnings per share (EPS) of $0.67 on sales of $1.35 billion. Those estimates reflect a sequential growth of 5.3% in revenue and a 25.7% drop in EPS. The revenue estimate is flat with the year-ago quarter, and the EPS estimate reflects a decline of more than 26%. For the full year, estimates call for EPS of $4.67, up nearly 22%, and revenue of $6.18 billion, up about 8.6%.

The stock trades at 7.8 times expected 2022 EPS, 8.4 times estimated 2023 earnings and 7.6 times estimated 2024 earnings. The stock’s post-IPO range is $12.05 to $42.75. Academy Sports does not pay a dividend.

Dollar General

Off-price retailer Dollar General Corp. (NYSE: DG) has had a share price increase of more than 18% over the past 12 months, including a gain of about 11.8% so far in 2021. The pandemic-battered economy has been a boon for dollar stores, and Coresight Research expects 1,650 new stores this year to join more than 34,000 already operating in the sector. Many are clustered in low-income areas, and some cities have passed ordinances restricting where new dollar stores may be located.

Analyst sentiment is bullish on Dollar General. Of 27 brokerages covering the firm, 22 rate the shares a Buy or Strong Buy, and three more have a Hold rating on the stock. At a price of around $233.40, the upside potential based on a median price target of $245 is about 5%. At the high target of $270, the implied upside is about 15.7%.

Second-quarter 2022 revenue is forecast to reach $8.59 billion, up 2.2% sequentially but down about 1% year over year. Adjusted EPS are forecast at $2.60, down 7.7% sequentially and down 17% year over year. For the full fiscal year, current estimates call for EPS of $10.25, a decline of 3.5%, on sales of $34.2 billion, up about 1.3%.

The stock trades at 22.9 times expected 2022 EPS, 20.9 times estimated 2023 earnings and 19.1 times estimated 2024 earnings. Dollar General’s 52-week range is $173.50 to $239.35, and the company pays an annual dividend of $1.68 (yield of 0.72%).

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