In a slow week for earnings, three firms reported quarterly results after markets closed on Tuesday and before they reopened on Wednesday. Solar tracking systems maker Array Technologies missed on earnings but beat on revenues with a 22% year-over-year increase. Shares traded up by about 15% in Wednesday’s premarket.
Cannabis products maker Tilray beat analysts’ earnings forecast but missed on revenues, even though sales rose by nearly 20% year over year. The stock traded up by around 2% in premarket action. Metals recycler Schnitzer Steel met earnings expectations and beat on revenues, but investors were not impressed and shares traded flat.
After markets close Wednesday and before they reopen again on Thursday, four notable earnings reports are expected.
Cazoo
European online automobile retailer Cazoo Group Inc. (NYSE: CZOO) reports quarterly results first thing Thursday morning. The company came public last August in a SPAC merger, and the stock price has dropped by about 68% since the IPO.
Cazoo offers car subscriptions that include the (new or slightly used) car, insurance, maintenance, taxes and services for a single monthly price. Subscribers pay only for fuel and batteries. The company has expanded outside its U.K. home and announced last week that it had secured a $55.5 million credit facility to help lift its subscription business on the continent.
Only three brokerages cover the stock. Two have a Buy rating on the shares, and the other rates the stock at Hold. At a recent price of around $3 a share, the upside potential based on a median price target of $6.64 is 121%. At the high price target of $9.02, the upside potential is 200%.
There are no earnings or revenue estimates for the fourth fiscal quarter of 2021, which ended in December. For the full fiscal year, analysts have forecast revenue of $869.34 million, up 291% year over year. Cazoo is expected to post a loss per share of $0.32 for the year.
The company is not expected to post a profit in 2022 or 2023. The sales to enterprise value multiple for 2021 is 2.8. For 2022 and 2023, the multiple is 0.9 and 0.5, respectively. The stock’s 52-week trading range is $2.19 to $10.27. Cazoo does not pay a dividend. Total shareholder return for the past year is negative 70.5%.
Conagra
Over the past 12 months, the share price of packaged food giant Conagra Brands Inc. (NYSE: CAG) has dipped by about 5.3%. As recently as mid-February, the stock traded at a breakeven point for the year. Rising costs are testing Conagra’s pricing power and investors’ willingness to stick with the stock. The company reports results early Thursday morning.
Most analysts following the stock (13 of 17) have a Hold rating on it, while the rest rate the shares at Buy or Strong Buy. At a share price of around $34.10, the upside potential based on a median price target of $36.00 is about 5.6%. At the high price target of $44.50, the upside potential is 30.5%.
The consensus estimate for fiscal third-quarter revenue is $2.84 billion, which would be down 7.1% sequentially but up by 2.5% year over year. Earnings per share (EPS) are expected to come in at $0.58, down 9.6% sequentially and 1.7% lower year over year. The current estimates for the 2022 fiscal year ending in May call for EPS of $2.43, down about 8.1%, on sales of $11.45 billion, up 2.3%.
The stock trades at 14.1 times expected 2022 EPS, 13.0 times estimated 2023 earnings of $2.63 and 12.4 times estimated 2024 earnings of $2.75 per share. Conagra’s 52-week trading range is $30.06 to $39.09, and the company pays an annual dividend of $1.18 (yield of 3.67%). Total shareholder return over the past 12 months is negative 5.8%.
Constellation Brands
Constellation Brands Inc. (NYSE: STZ) produces, imports and sells beer, wine and spirits in the United States and other countries. With a market cap of around $44.2 billion, it is the country’s largest publicly traded alcoholic beverage stock. The stock has lost about 1.7% to its share price over the past 12 months after a couple of wild swings. Constellation reports results Thursday morning.
Earlier this week, the company’s controlling shareholders, the Sands family, offered to reduce their voting rights from approximately 60% to around 29% by converting their Class B shares to Class A common shares. If the proposal is accepted, the family would remain the company’s largest shareholder.
Of 24 analysts covering the company, 18 rate the stock a Buy or Strong Buy and the other six have Hold ratings. At a share price of around $230.30, the upside potential based on a median price target of $275.00 is 19.4%. At the high price target of $310.00, the upside potential rises to 34.6%.
Analysts expect Constellation to report fiscal fourth-quarter revenue of $2.02 billion, down 13.1% sequentially and up 3.6% year over year. Adjusted EPS are pegged at $2.12, down 32% sequentially and up 22% year over year. For full fiscal 2022 that ended in February, estimates call for EPS of $10.12, up by 1.5%, and revenue of $8.73 billion, up 1.4%.
The stock trades at 23.3 times expected 2022 EPS, 20.5 times estimated 2023 earnings of $11.49 and 18.0 times estimated 2024 earnings of $13.77 per share. The stock’s 52-week range is $207.35 to $258.00. Constellation pays an annual dividend of $3.03 (yield of 1.32%). Total shareholder return for the past 12 months is 1.4%.
24/7 Wall St.Levi Strauss
Apparel maker Levi Strauss & Co. (NYSE: LEVI) has seen its stock drop by nearly 16% over the past 12 months. It has declined by about 32% since late November, despite beating analysts’ earnings and revenue estimates in each of the prior four quarters. For the 2021 fiscal year ended in November, Levi reported a year-over-year revenue increase of $29.5% and an EPS increase of 630%. The company stopped doing business in Russia early in March, where about 4% of its 2021 revenue came from. The company reports results late on Wednesday.
Analysts are bullish on the stock, with all 13 rating the shares Buy or Strong Buy. The median price target of $30.00 is about $10.30 higher than the current trading price, implying a potential upside of 34.3%. At the high price target of $40.00, the implied upside is 103%.
For the first quarter of fiscal 2022, analysts are forecasting sales of $1.55 billion, down 8.1% sequentially and 18.3% higher year over year, and adjusted EPS of $0.42, up 1.7% sequentially and 23.5% year over year. For the full fiscal year, analysts currently expect EPS of $1.54, up 4.5%, on sales of $6.45 billion, up 12%.
The stock trades at a multiple of 12.8 times expected 2022 EPS, 11.5 times estimated 2023 earnings of $1.72, and 10.3 times estimated 2024 earnings of $1.91 per share. The stock’s 52-week range is $17.34 to $30.84. Levi Strauss pays an annual dividend of $0.26 (yield of 2.03%). Total shareholder return for the past year is negative 17.6%.
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