Investing

Earnings Previews: Commercial Metals, Dollar General, Lennar

Paul Ausick

Published: March 15, 2022 12:16 pm

After markets closed on Monday, Coupa Software reported solid beats on profit and revenue estimates but said the company planned on continued investment in top-line growth and that it could take a number of years of robust growth in order to recover from the coronavirus pandemic’s impact on the company. Shares traded down about 17% shortly after Tuesday’s opening bell.

Westport Fuel Systems also beat profit and revenue estimates and shares traded up about 2% early Tuesday. CTI BioPharma was expected to report results on Monday but did not do so.

We already have previewed four companies set to report results after markets close Tuesday and before they open again on Wednesday: GoHealth, Jabil, Markforged and SentinelOne.

Here is a look at three companies scheduled to report earnings after markets close Wednesday or before they open on Thursday.

Commercial Metals

Recycler and metals fabricator Commercial Metals Co. (NYSE: CMC) reports second-quarter fiscal 2022 results before Thursday’s open bell. The stock has added more than 40% to its share price over the past 12 months, taking advantage of rising materials and scrap metal prices. The company’s strong balance sheet needs to be brought more forcefully into play in order to improve shareholder return.

Just nine analysts cover the stock, and six of them have Hold ratings. The other three rate the shares at Buy or Strong Buy. At a share price of around $40.70, the stock has outrun its median price target of $40.70. At the high price target of $47.00, the upside potential is 16.7%.

For the company’s second quarter, analysts anticipate revenue of $1.92 billion, down 3% sequentially but up 31.5% year over year. Adjusted EPS are forecast at $1.38, down 14.8% sequentially and 109% higher year over year. For the full fiscal year ending in August, CMC is expected to report EPS of $5.64, up 59.9%, on sales of $7.93 billion, up 17.9%.

Shares trade at 7.2 times expected 2022 EPS, 11.4 times estimated 2023 earnings of $3.55 and 11.1 times estimated 2024 earnings of $3.64 per share. The stock’s 52-week range is $26.98 to $41.69. The high was posted Monday. CMC pays an annual dividend of $0.50 (yield of 1.38%). Total shareholder return for the past year is 43.6%.

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Dollar General

Shares of Dollar General Corp. (NYSE: DG) have risen by more than 12% over the past 12 months. Rival Dollar Tree is up nearly 40% in the same period, with virtually all of that gain coming after the company raised its rock-bottom price from $1.00 to $1.25. While inflation could have a negative effect on the company, at least some analysts think that Dollar General will benefit as consumers search for more bargains for discretionary spending. The company reports results first thing Thursday morning.
Analysts remain mostly bullish on Dollar General stock. Of 28 brokerages covering the off-price retailer, 20 have rated the stock a Buy or Strong Buy, and six more have Hold ratings. At a share price of around $214.20, the upside potential based on a median price target of $250.00 is 16.7%. At the high price target of $270.00, the upside potential is 26%.

Fourth-quarter revenue is forecast at $8.71 billion, up 2.2% sequentially and 3.6% year over year. Adjusted EPS are forecast at $2.57, up 23.6% sequentially but down 1.9% year over year. For full fiscal 2022 that ended in January, Dollar General is expected to report EPS of $10.17, down 4.2%, on sales of $34.27 billion, up 1.5%.

Shares trade at 20.9 times expected 2022 EPS, 19.1 times estimated 2023 earnings of $11.14 and 17.3 times estimated 2024 earnings of $12.29 per share. The stock’s 52-week range is $173.50 to $240.14. Dollar General pays an annual dividend of $1.62 (yield of 0.79%). Total shareholder return for the past year is 10.6%.

Lennar

Homebuilder Lennar Corp. (NYSE: LEN) has seen its share price decline by about 2.5% over the past 12 months. In early December, shares reached a 12-month peak, up 34% for the same period. Rising interest rates will certainly affect homebuilders, but they could still remain below 5% for several more months. Investors do not appear to see the housing market that way, taking most homebuilders into bear territory since early December. Lennar is set to report fiscal first-quarter results after markets close on Wednesday.

Of 20 analysts covering the stock, 14 have a Buy or Strong Buy rating and five more rate the stock at Hold. At a share price of around $85.20, the upside potential to a median price target of $127.50 is 49.6%. At a high target of $163.00, the upside potential is 91.3%.

For its first quarter of fiscal 2022, Lennar is expected to report revenue of $6.19 billion, down 26.7% sequentially and up 21.8% year over year. Adjusted EPS are pegged at $2.58, down nearly 41% sequentially but about 26.5% higher year over year. For the full fiscal year ending in November, EPS are forecast at $15.87, up 22.1%, on sales of $32.68 billion, up more than 20%.

The stock trades at 5.2 times expected 2022 EPS, 4.9 times estimated 2023 earnings of $16.87 and 4.6 times estimated 2024 earnings of $18.15 per share. The stock’s 52-week range is $79.52 to $117.54, an all-time high posted in December. Lennar pays an annual dividend of $1.00 (yield of 1.77%). Total shareholder return for the past year is negative 4.7%.

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