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Earnings Previews: Array Technologies, Schnitzer Steel, Tilray

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Earnings reports slow to a trickle this week, with only a few noteworthy releases due. The following week, however, is a different story.

March-quarter earnings reports from the nation’s largest banks, the world’s largest chipmaker and a Dow health care provider will hit the tape before the holiday-shortened week comes to a close a week from Thursday.
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Meanwhile, here is a look at three companies set to report quarterly results late Tuesday or early Wednesday.

Array Technologies

Albuquerque-based Array Technologies Inc. (NASDAQ: ARRY) makes and sells the hardware and software that allows solar arrays and panels to track the sun. Over the past year, the stock has dropped about 63% of its value. The company reports results after markets close Tuesday.

Last week, the company said in a federal filing that financial statements filed so far for the 2021 fiscal year “should not be relied upon.” Array expects to post a net decrease for the three quarters in future quarters. The company is also likely to face headwinds from a U.S. Commerce Department ruling that solar cells and modules assembled in Cambodia, Malaysia, Thailand and Vietnam could be subjected to tariffs equal to those imposed on Chinese suppliers. The threatened tariffs may cause delays or cancellations in utility-scale projects.

Of 12 brokerages covering the stock, half have given the shares a Buy or Strong Buy rating and the other half rate the stock at Hold. At a recent price of around $11 a share, the upside potential on the stock based on a median price target of $21.50 is 95%. At the high target of $32.00, the upside potential is 191%.

Fiscal fourth-quarter revenue is forecast at $213.19 million, which would be up 11% sequentially and 18% higher year over year. The company is expected to post an adjusted loss per share of $0.03, compared to the prior quarter’s per-share loss of $0.07. For the 2021 fiscal year that ended in December, the company is currently forecast to post earnings per share (EPS) of $0.15, down 84% year over year, on revenue of $856.15 million, down about 1.9% year over year.

The stock trades at 74.5 times expected 2021 EPS, 15.5 times estimated 2022 earnings of $0.70 and 9.9 times estimated 2023 earnings of $1.11 per share. The stock’s 52-week range is $8.02 to $31.00. Array Technologies does not pay a dividend. Total shareholder return for the past year is negative 63.6%.

Schnitzer Steel

Schnitzer Steel Industries Inc. (NASDAQ: SCHN), a recycling firm for both ferrous and non-ferrous metals, has seen a share price boost of more than 26% over the past 12 months. Rising demand for scrap metal and increased U.S. electric arc furnace capacity have boosted demand for the company’s auto parts recycling business. Last month, the company announced the launch of a line of net-zero carbon products (so-called green steel). The company reports quarterly results before markets open Wednesday morning.

Just three analysts cover the stock, and they are split in their views: one rates the shares a Strong Buy and the others have Hold ratings. At a share price of around $51.90, the upside potential to a median price target of $63.00 is 21.4%. At the high price target of $77.00, the upside potential is 48.4%.
For the fiscal second quarter of 2022 that ended in February, the sales estimate is $779.39 million, down 2.4% sequentially and up 30% year over year. Adjusted EPS are forecast at $1.38, down about 13% sequentially and 10.4% lower year over year. For the full fiscal year ending in August, EPS are currently forecast at $7.06, up 15.2%, on sales of $3.44 billion, up 24.6%.

The stock trades at 7.3 times expected 2022 EPS, 8.2 times estimated 2023 earnings of $6.35 and 6.7 times estimated 2024 earnings of $7.77 per share. The stock’s 52-week range is $35.34 to $59.34. Schnitzer Steel pays an annual dividend of $0.75 (yield of 1.45%). Total shareholder return for the past 12 months is 23.4%.
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Tilray

Shares of cannabis grower Tilray Inc. (NASDAQ: TLRY) have dropped by about 53% over the past year. The stock was up 3.4% briefly last week before closing out the five-day period down 12.6%. The company reports results first thing Wednesday morning.

The industry got some good news last week when the U.S. House passed legislation (the MORE Act) that would decriminalize marijuana, remove it from the U.S. list of dangerous drugs and slap an excise tax on sales of cannabis products. The less good news is that the legislation is unlikely to get the 60 votes it needs to make it through the U.S. Senate and on to the president’s desk.

Of 20 analysts covering the stock, 14 have a Hold rating on the stock while three have Buy ratings and one has a Strong Sell rating. At a share price of around $7.50, the upside potential to the median price target of $8.00 is 6.7%. At the high price target of $23.00, the upside potential is 207%.


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