Investing

Earnings Previews: Albertsons, Commercial Metals, Tilray

Paul Ausick

Published: January 6, 2022 12:15 pm

The first results are in for quarterly earnings reports out in January. Of the companies we previewed earlier this week, Bed Bath & Beyond, Conagra Brands and Schnitzer Steel all missed profit estimates, and the first two also missed on revenues as well. Both Constellation Brands and Walgreens beat on both. Four were trading lower, however, just minutes after the opening bell on Thursday, while Bed Bath & Beyond mysteriously traded up by 15%.

There are no other interesting reports due out for the rest of this week, so we shall have a look at a few stocks due to report early next week. Next Thursday might be said to be the beginning of the December-quarter earnings season, and Friday has reports scheduled from three of the nation’s biggest banks.

Here are three companies reporting on Monday and Tuesday of next week.

Albertsons

Grocery store operator Albertsons Companies Inc. (NYSE: ACI) has added about 79% to its share price over the past 12 months. The company appears to be tinkering around the edges with the introduction of an in-store salad bar, an online food replenishment service and a meal-planning capability. Albertsons reports results before markets open on Tuesday.

Albertsons, Kroger and Publix drew the attention of Senator Elizabeth Warren late last month for passing on rising costs to consumers even though the chains posted very strong profits in 2020 and 2021. Senator Warren has asked for responses regarding the stores’ prices, wages and executive compensation.

Of 22 analysts covering the stock, 11 have a Hold rating on the shares, while nine rate the stock as a Buy or Strong Buy. At a recent price of around $29.90 a share, the upside potential based on a median price target of $33 is about 10.4%. At the high price target of $38, the upside potential is 27%.

Fiscal 2022 third-quarter revenue is forecast at $16 billion, which would be down about 3.1% sequentially and about 4.8% lower year over year. Adjusted earnings per share (EPS) are tabbed at $0.58, down 8.9% sequentially and 12.1% year over year. For the full fiscal year ending in February, Albertsons is expected to post EPS of $2.61, down 19.5%, on sales of $69.92 billion, up by less than 1%.

The share price to earnings multiple for the 2022 fiscal year is 11.57. For fiscal 2023 , the multiple to estimated EPS of $2.50 is 11.9, and for 2024, it is 11.9 times estimated EPS of $2.52. The stock’s 52-week range is $15.97 to $37.85. The company pays an annual dividend of $0.48 (yield of 1.64%). Total shareholder return for the past year is 75%.

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Commercial Metals

Recycler and metals fabricator Commercial Metals Co. (NYSE: CMC) reports first-quarter fiscal 2022 results first thing Monday morning. The stock has added about 75% to its share price over the past 12 months, as it took advantage of rising materials and scrap metal prices.
Excluding capital expenditures, CMC’s net debt to EBITDA ratio is 0.8. The company just sold a plot of land in Southern California for gross proceeds of around $313 million. This strong balance sheet could be going to work soon. Schnitzer Steel reported a disappointing quarter Thursday morning, and CMC was feeling the weight.

Just nine analysts cover the stock, and seven have a Hold rating. The other two rate the shares at Buy or Strong Buy. At a share price of around $36.10, the upside potential based on a median price target of $36.50 is 1.1%. At the high price target of $42, the upside potential is 16.3%.

For the company’s first quarter, analysts are expecting revenue of $2.02 billion, down by less than 1% sequentially but up 45.3% year over year. Adjusted EPS are forecast at $1.19, down 5.4% sequentially and up 105% year over year. For full fiscal 2022 ending in November, CMC is forecast to report EPS of $3.97, up 12.5%, on sales of $7.61 billion, up 13%.

CMC’s share price to earnings multiple for fiscal 2022 is 9.1. For fiscal 2023, the multiple to estimated EPS of $3.49 is 10.3, and for 2024, it is 11.9 times estimated EPS of $3.02. The stock’s 52-week range is $19.44 to $38.72. The company pays an annual dividend of $0.56 (yield of 1.49%). Total shareholder return for the past year is 56%.

Tilray

Since completing a merger with Aphria in May of last year, shares of cannabis grower Tilray Inc. (NASDAQ: TLRY) have dropped by about 60%. That performance puts the company about in the middle of six growers that have lost between about 30% and 90% of their value in the same period. In 2018, before the deal with Aphria, Tilray stock traded at a high of around $150 a share.

Competition, especially from smaller, more agile players, has shrunk the market share of Tilray and the other big marijuana growers. Revenue forecasts for all of them are down and profits remain elusive. Until the United States removes marijuana from the list of dangerous drugs, marijuana growers are just going to have to do whatever it takes to survive. Tilray reports quarterly results before Monday’s opening bell.

Of 21 analysts covering the stock, 16 have a Hold rating, three have Buy ratings and 2 have Strong Sell ratings. At a share price of around $6.40, the upside potential to the median price target of $12 is nearly 88%. At the high price target of $23, the upside potential is almost 260%.

For Tilray’s second fiscal quarter of 2022, analysts are looking for revenue of $173.15 million, up 3% sequentially and 36.4% year over year. Analysts expect the company to post a loss per share of $0.07, equal to the prior quarter’s loss, and $0.20 per share better than the year-ago loss. For the full fiscal year ending in May, analysts have estimated a loss per share of $0.26, compared to last year’s loss per share of $0.93. Full-year sales are expected to rise by almost 39% to $712.38 million.

Tilray is not expected to post a profit in 2022, 2023 or 2024. The multiple of the stock’s fiscal year sales to enterprise value is 5.1 times in 2022, 4.3 times in 2023 and 3.3 times in 2024. The stock’s 52-week range is $6.36 to $67.00. The low was posted Thursday morning. Tilray does not pay a dividend.