The number of companies reporting quarterly earnings this week has swelled to more than 1,000 as more companies confirm their plans. Among companies we previewed and that reported late Wednesday, Disney and Progenit missed both on earnings and revenue, while Affirm and SoFi both beat on revenue and missed on profits. ArcelorMittal missed on revenue and beat on profits Thursday morning, while bitcoin miner Hut 8 beat on both.
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After markets close Thursday, Blink, Lordstown Motors, Phunware, Sundial and TMC are expected to report quarterly results. Before markets open on Friday, AstraZeneca, Bakkt and Hyzon are scheduled to report results.
No reports are scheduled for release Friday afternoon. Here are previews of three quarterly reports due out before markets open next Monday.
Oatly
Malmö, Sweden-based alternative-source dairy products maker Oatly AB (NASDAQ: OTLY) came public in mid-May of this year and, after reaching a peak of $29.00 a month later, shares dropped to a post-IPO low of $12.33 on Wednesday. The stock has lost about 39% of its value since the IPO.
As the company’s name implies, Oatly currently focuses on oat-based dairy alternatives like oat milk. Investors are probably wondering if and how Oatly will weather the next round of alternative foods. Is oat milk just a fad? Are the company’s expansion plans sufficient to beat back competition from far bigger players like Chobani and Danone? Maybe the earnings report will address these issues and deliver the encouragement investors seek.
Oatly is popular among analysts. Of 17 brokerages covering the stock, 13 have a Buy or Strong Buy rating on the shares. The other four have Hold ratings. At a recent price of around $12.35, the implied upside based on a median price target of $26 is about 111%. At the high price target of $36, the implied upside is 191%.
For the company’s first quarter of fiscal 2022, analysts are expecting revenue of $253.22 million, which would be up 27.3% sequentially. Oatly is expected to post a loss per share of $0.07, an improvement over the prior quarter’s loss per share of $0.10. For the full fiscal year, the consensus estimates call for a loss per share of $0.25, compared to a loss of $0.36 last year, on sales of $1.28 billion, up 85%.
Oatly is not expected to post a profit in 2022 or 2023. The forecast enterprise value-to-sales multiple is 5.1 for 2022 and 3.3 for 2023. The stock’s post-IPO range is $12.33 to $29.00, and Oatly does not pay a dividend.
Tyson Foods
Tyson Foods Inc. (NYSE: TSN) is a global supplier of beef, chicken, pork and prepared foods. Chinese tariffs on imported pork continue. American consumers may soon face price increases on meat products like hotdogs as producers like Tyson, Conagra and Kraft Heinz examine raising prices. Higher costs for labor, shipping, and packaging need to be offset, and consumers are the usual suspects.
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Tyson’s recent COVID-19 vaccine mandate resulted in 96% of its 120,000 global workforce getting the jab. That should help the company keep its production up and its costs lower. Over the past 12 months, Tyson stock has added about 40% to its price, with most of that coming between last November and early June.
Analysts remain bullish on the stock, probably because people have to eat and lots of them get their food from Tyson. Of 15 analysts covering the stock, eight have ratings of Buy or Strong Buy and all the rest have Hold ratings. At a share price of around $82.40, the upside potential based on a median price target of $86 is about 4.4%. At the high price target of $95, the implied potential is 15.3%.
For Tyson’s fourth quarter of fiscal 2021, analysts are expecting revenue of $12.69 billion, up 1.7% sequentially and 10.7% higher year over year. Adjusted earnings per share (EPS) are forecast at $2.09, down 22.5% sequentially but up 10% year over year. For the full fiscal year, Tyson is expected to report EPS of $7.86, up 39.4%, on sales of $47.01 billion, up 8.9%.
The forecast price-to-EPS multiple for 2021 is 10.5. For 2022 and 2022, the multiples are 11.9 and 11.3, respectively. The stock’s 52-week range is $60.10 to $83.76. Tyson pays an annual dividend of $1.78 (yield of 2.19%).
Warner Music
Warner Music Group Corp. (NYSE: WMG) is the world’s third-largest (by market share) label. Its share of the market in 2020 was 16%, behind Sony’s 21% and Universal’s 32%. Warner Music came public in June of last year and since then the shares are up more than 64%. For the past 12 months, the stock is up almost 69%.
The company is reportedly in discussions with the estate of the late David Bowie to acquire Bowie’s entire catalog. While no price has been mentioned, Tina Turner recently sold her back catalog for $50 million, while Bob Dylan nabbed an estimated $300 million from Universal for his in 2020 and Paul Simon reportedly received $250 million from Sony for his catalog. Bowie’s catalog is likely to be worth closer to Simon’s and Dylan’s than to Turner’s.
Of 19 analysts covering Warner Music, 11 have a Buy or Strong Buy rating on the stock and six more have a Hold rating on the shares. At around $48.50, the share price has run past its median price target of $47, and it trades with an upside potential of 9.3% to the high price target of $53.
For the fiscal fourth quarter, revenue is forecast at $1.36 billion, up 1.6% sequentially and 20% year over year. Adjusted EPS are pegged at $0.15, down 38% sequentially and up 275% year over year. For the full fiscal year, EPS are expected to come in at $0.78, up 56.5%, on sales of $5.26 billion, up nearly 18%.
The stock’s price-to-EPS multiple for 2021 is 62.6, while the 2022 and 2023 multiples are 45.5 and 34.6, respectively. The stock’s 52-week range is $27.31 to $50.23. Warner Music pays an annual dividend of $0.60 (yield of 1.25%).
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