Investing

Earnings Previews: BlackBerry, Rite Aid

The first earnings reports we have covered for this week are coming after Tuesday’s closing bell and before Wednesday’s open: Adobe, FedEx, General Mills and Stitch Fix.

Here are two more, one due after markets close on Wednesday and the other before regular trading begins on Thursday.

BlackBerry

Former cell phone giant BlackBerry Ltd. (NYSE: BB) has been transforming itself into a security and platform software vendor for the past few years. The share price has nearly doubled in the past 12 months, including a spike in late January when retail investors jumped on the stock and squeezed short sellers. Shares hit a high of nearly $29 and, even though they have given back two-thirds of that, the stock is still up 44% for the year to date. BlackBerry reports its fiscal 2022 second-quarter results late Wednesday.

Analysts are downbeat on the stock. Just nine brokerages cover the firm, with only two having a Hold rating on the stock and the other seven rating the shares a Sell or Strong Sell. The stock trades at around $9.50, above the median price target of $8. At the high price target of $11, the implied gain is about 16%.

The forecast for second-quarter revenue is $164.28 million, which would be down 5.6% sequentially and 38% year over year. Analysts expect the stock to post a per-share loss of $0.07, two cents worse than the first-quarter loss, and much worse than last year’s reported earnings per share (EPS) of $0.11. Current estimates for the full fiscal year call for a loss per share of $0.13, compared with last year’s EPS of $0.18, on sales of $781.62 million, down 12.5% year over year.

BlackBerry stock trades at 130.2 times forecast 2023 earnings of $0.08 per share and 31.4 times forecast 2024 earnings of $0.32 a share. The stock’s 52-week range is $4.37 to $28.77. BlackBerry does not pay a dividend.

Rite Aid

Retail drugstore operator Rite Aid Corp. (NYSE: RAD) reports fiscal 2022 second-quarter results before the open on Thursday. Over the past 12 months, the stock has added about 18%, including a share price spike to near $32.50 in late January. For the year to date, shares currently trade down less than 1%.

Rite Aid had a near-death experience about five years ago after failing to merge with Walgreens and the share price dipped to $5.30 before beginning a turnaround in August of 2019. The stock only added about 2.3% to its share price in 2020.

Few analysts pay attention to the shares, and none rates the stock above a Hold. At a price of around $15.80, the stock has outrun the median price target of $13 and the high price target of $13.00. Analysts bailed on the stock after the prior quarter’s results were announced and Rite Aid guided a fiscal year net loss of up to $0.79, while analysts had projected EPS of $0.80.

Second-quarter revenue is expected to come in at $6.21 billion, up about 0.8% sequentially and 3.8% year over year. The adjusted loss per share is forecast at $0.4,2 compared to EPS of $0.38 in the prior quarter and $0.25 per share in the second quarter of last year. For the full fiscal year, Rite Aid is expected to post a loss per share of $0.59, compared to last year’s loss of $0.15. Revenue is expected to increase by 4.5% to $25.13 billion.

Rite Aid is expected to post a loss in 2023 as well, and there is no estimate for 2024. For the fiscal year period 2022 through 2024, Rite Aid’s enterprise value-to-sales ratio is expected to remain flat at 0.3. The stock’s 52-week range is $8.86 to $32.48, and Rite Aid does not pay a dividend.