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Earnings Previews: Abercrombie & Fitch, Dollar Tree, Lithium Americas

While the Russian invasion of Ukraine continues and negotiations between the two countries have begun, U.S. companies will continue to report quarterly results this week. Events in Europe that are arguably far more important than company earnings may have a shorter, if sharper, impact on investors than do financial results and company outlooks for the future.

Several firms in the electric vehicle industry have reported or will report results Monday: Blink, Canoo, Lucid, Luminar and Velodyne Lidar. A major retailer, a leading PC maker and a struggling internet video conferencing firm are also on deck to report results after markets close Monday: HP, Sea Limited, Target and Zoom.

We also have previewed five earnings reports due out after markets close Tuesday: AMC, Nio, Nordstrom, Salesforce and SoFi.

Here is a look at three companies scheduled to report quarterly results before markets open on Wednesday.

Abercrombie & Fitch

Specialty retailer Abercrombie & Fitch Co. (NYSE: ANF) has added about 40% to its share price over the past 12 months. At around $38 in Monday trading, the share price is about 60% below its all-time high of more than $84 almost 15 years ago, but well above a two-year low of around $8. The company claims to be far more customer-focused and has had significant success getting its message out to its target market through TikTok. What A&F has given up is a lot of the unique features that most buyers recall from the past couple of decades.

Analysts are waiting to see if A&F’s putative comeback is the real deal. Five of 10 brokerages have given the stock a Buy rating and four more have a Hold rating. At the recent price of around $38.20 a share, the upside potential based on a median price target of $45.00 is 17.8%. At the high price target of $59.00, the upside potential is 54.4%.

Consensus estimates call for A&F to post revenue of $1.18 in the fourth fiscal quarter that ended in January. That would be up nearly 31% sequentially and 5.4% year over year. Adjusted earnings per share (EPS) are tabbed at $1.27, up 48% sequentially but down 15.3% year over year. For the full 2022 fiscal year just ended, analysts expect EPS of $4.50, miles above the posted loss per share last year of $0.73. Revenue for the year is forecast at $3.73, up 19.4% compared to the 2021 fiscal year.

A&F stock trades at around 8.5 times expected 2022 EPS, 9.7 times estimated 2023 earnings of $3.98 and 9.4 times estimated 2024 earnings of $4.10 per share. The stock’s 52-week range is $26.09 to $48.97, and the company does not pay a dividend. Total shareholder return for the past year was nearly 41%.

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