Earnings Previews: Bed Bath & Beyond, CarMax, Micron, Paychex

As we get closer to the September-quarter earnings season, the number of earnings reports released each week seems to get smaller.

We expect to preview four reports due out during the week of October 4, and here are four that are due this week, including one coming after markets close Tuesday.

Micron Technology

Semiconductor maker Micron Technology Inc. (NASDAQ: MU) has added about 53% to its share price over the past 12 months, but since peaking in April, the stock has dipped by 23%. Year to date, the share price is flat. Demand for Micron’s memory chips is expected to decline as demand for personal computers dips. That will put downward pressure on prices, even though data center demand is expected to remain strong. The company is expected to report fiscal fourth-quarter results after markets close Tuesday.

Of 33 analysts covering the stock, 26 have a Buy or Strong Buy rating on the shares and the other seven rate the stock at Hold. At a recent price of around $74.50, the upside potential, based on a median price target of $105, is nearly 41%. At the high target of $165, upside potential is a whopping 121%.

Fourth-quarter revenue is forecast at $8.21 billion, which would be up about 10.7% sequentially and nearly 36% year over year. Adjusted earnings per share (EPS) are forecast at $2.34, up nearly 25% sequentially and 117% year over year. For the full fiscal year, revenue is forecast at $27.69, up 29.2%, and EPS is forecast at $6.02, or nearly 113% higher.

The stock trades at 12.3 times expected 2021 EPS, 6.9 times estimated 2022 earnings and 7.1 times estimated 2023 earnings. The stock’s 52-week range is $46.50 to $96.96. Micron pays an annual dividend of $0.10 (yield of 0.13%).

Bed Bath & Beyond

Specialty retailer Bed Bath & Beyond Inc. (NASDAQ: BBBY) has seen its share price rise by nearly 58% over the past 12 months, including two sharp spikes, one in late January and a second in early June. In the first two weeks of this year, Bed Bath & Beyond’s stock jumped by 30%. At last night’s closing price, the stock traded essentially flat with its price on January 13 of this year. The company reports second-quarter fiscal 2022 results before markets open on Thursday.

Analysts have taken a wait-and-see stance on the stock, with 13 of 21 brokerages putting a Hold rating on the stock. There are just three Buy ratings out of the remaining eight. At a price of around $23.60, the upside potential, based on a median price target of $30, is 27%. At the high price target of $44, the upside potential is 86%.

Bed Bath & Beyond is expected to post second-quarter revenue of $2.06 billion, up 5.4% sequentially and down 23% year over year. EPS are forecast at $0.52, up 940% sequentially, and up two cents year over year. For the 2022 fiscal year, current estimates call for EPS of $1.47 compared to a loss per share of $0.98 last year. Revenue is expected to dip by 10% to $8.31 billion for the year.

The stock trades at 15.7 times expected 2022 EPS, 10.5 times estimated 2023 earnings and 8.4 times estimated 2024 earnings. The stock’s 52-week range is $14.25 to $53.90, and the company does not pay a dividend.

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