Earnings Previews: Grindrod Shipping, Nordstrom, Star Bulk Carriers

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The three major U.S. equity indexes closed mixed on Friday, but the gain or loss was small. A late bounce higher had six of 11 sectors closing the day in the green, with health care (up 1.3%) and real estate (up 1.2%) leading the pack. All three indexes traded up about 1% in Monday’s premarket session. What was really moving markets in the morning was a report that networking giant Broadcom is in negotiations to acquire VMware in a deal that could fetch up to $70 billion for VMware investors.

Before markets opened, Chinese electric vehicle maker Xpeng reported a slightly better than expected loss and met revenue expectations. The less good news is that gross margins came in lower than expected and guidance was light. Shares traded down about 6.5% in mid-morning trading Monday.

We already have previewed four companies set to report quarterly results late Monday or early Tuesday: Abercrombie & Fitch, Best Buy, NetEase and Petco. After markets close Monday or before they open on Tuesday, Zoom Video and Frontline are due to report results. After markets close Tuesday, Dick’s Sporting Goods, Intuit and Toll Brothers will report quarterly earnings.

Here is a look at three more firms set to report earnings Tuesday afternoon.

Grindrod Shipping

Singapore-based Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN) has been in business for more than 110 years but only began trading in the United States in June of 2018. Since then, the stock is up almost 84%, and over the past year, the stock is up about 273%. The all-time high was posted on Friday. Like most maritime shipping companies, Grindrod is not heavily traded and is decidedly cyclic. Also like other shippers, the company pays handsome dividends when times are good. We looked at Grindrod and other oceangoing carrier companies last week.

Just two analysts cover the stock and both have a Buy rating. At a recent share price of around $28.60, the stock is trading at a dime above the average price target. At the high target of $31.00, the upside potential is 8.4%.

For the company’s first quarter of fiscal 2023, analysts are expecting revenue of $88.4 million, which would be down about 38% sequentially. Adjusted earnings per share (EPS) are forecast at $1.36, down 49% sequentially. Year-over-year data is not available. For the full fiscal year, EPS are forecast to come in at $5.91, up 0.3%, on sales of $391.8 million, down 14.1%.

Grindrod stock trades at 4.8 times expected 2022 EPS and 5.6 times estimated 2023 earnings of $5.05 per share. The stock’s 52-week trading range is $7.91 to $28.98. The company pays an annual dividend of $1.44 (yield of 10.36%). Total shareholder return for the past year was 258.7%.


Shares of department store operator Nordstrom Inc. (NYSE: JWN) have lost about 44% of their value over the past 12 months. Since the beginning of the year, however, they have dipped by about 6.5%, after jumping to a gain for the year of 30% in mid-April. Investors have been cool to retail stocks recently, and there is good reason for that. None has yet shown any sign of being capable of dealing with consumers worried about inflation and rising credit card interest rates.
Analysts remain cautious on Nordstrom stock. Of 20 brokerages covering it, 13 have a Hold rating, while only one has a Strong Buy rating. At a share price of around $21.00 the upside potential based on a median price target of $26.50 is 26.2%. At the high price target of $43.50, the upside potential is 107%.

For the first quarter of fiscal 2023 that ended in April, revenue is forecast at $3.29 billion, down 26.6% sequentially but up 9.3% year over year. Analysts have forecast a loss per share of $0.04 for the quarter, compared to a year-ago loss of $0.64 per share. For the full 2023 fiscal year ending in January, current estimates call for EPS of $3.17, up 111.3%, on sales of $15.6 billion, up 5.5%.

Nordstrom stock trades at 6.6 times expected 2023 EPS, 6.3 times estimated 2024 earnings of $3.34 and 5.4 times estimated 2025 earnings of $3.90 per share. The stock’s 52-week range is $18.65 to $38.69. The company pays an annual dividend of $0.76 (yield of 3.59%). Total shareholder return for the past year was negative 43.9%.

Star Bulk Carriers

As its name implies, Star Bulk Carriers Corp. (NASDAQ: SBLK) ships dry bulk cargoes like ore, coal and grain globally with a fleet of 128 vessels of various sizes. The Greece-based carrier has added about 79% to its stock price over the past 12 months. Since its most recent trough in May of 2020, the stock is up nearly 888%.

The Baltic Dry Index, which reflects the average prices paid for dry bulk cargoes over more than 20 international routes, is still well short of its 52-week high at around 5,500. At a Monday morning level of around 3,340, however, the index is about eight times higher than it was two years ago.

Of eight analysts covering the stock, six have a Buy or Strong Buy rating. The other two rate the stock at Hold. At a share price of around $32.90, the upside potential based on a median price target of $35.50 is 7.9%. At the high target of $41.00, the upside potential is 24.6%.

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