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Earnings Previews: Alibaba, Baidu, Dollar Tree, Macy's

For Alibaba’s fourth quarter of fiscal 2022, analysts are expecting revenue of $29.91 billion, which would be down 21.7% sequentially but 46.4% higher year over year. Adjusted earnings per share (EPS) are expected to come in at $1.08, up nearly 225% sequentially and down by 120.2% year over year. For the full fiscal year that ended in March, Alibaba is expected to report EPS of $7.67, up 517.3%, on sales of $127.48 billion, up 16.5%.

The company’s stock trades at 11.4 times expected 2022 EPS, 10.9 times estimated 2023 earnings of $8.02 and 9.7 times estimated 2024 earnings of $9.03 per share. The stock’s 52-week range is $73.28 to $230.89. Alibaba does not pay a dividend, and the total shareholder return for the past year was negative 60.3%.

Baidu

Beijing-based Baidu Inc. (NASDAQ: BIDU) is China’s premier search engine. The company’s share price has been sinking ever since late last June and is down about 38.7% over the past 12 months. The company is included in the U.S. Securities and Exchange Commission’s list of Chinese firms that may be forced to give up U.S. stock exchange listings unless they provide more transparent access to accounting practices. Threatened delisting, stricter Chinese regulation and China’s recent coronavirus lockdowns are expected to be an anchor on Baidu’s quarterly results.

Of 21 brokerages covering the stock, 15 have a Buy or Strong Buy rating and six more rate the stock at Hold. At a share price of around $115.60, the stock’s upside potential based on a median price target of $199.55 is about 72.6%. At a high price target of $318.05, the upside potential is 175%.

Analysts expect Baidu to post first-quarter 2022 revenue of $4.17 billion, a sequential decrease of 19.9% and a 2.9% decline year over year. Adjusted EPS are forecast at $0.83, down 120% sequentially and 54.5% year over year. For full fiscal 2022, the consensus estimate calls for EPS of $6.95, or 14.2% higher year over year, and revenue of $19.74 billion, up 0.8%.

The stock trades at 16.7 times expected 2022 EPS, 12.6 times estimated 2023 earnings of $9.23 and 10.6 times estimated 2024 earnings of $10.99 per share. The stock’s 52-week range is $101.62 to $209.17. Baidu does not pay a dividend, and the total shareholder return for the past year was negative 38.7%.

Dollar Tree

Off-price retailer Dollar Tree Inc. (NASDAQ: DLTR) has added around 17.6% to its share price over the past 12 months. Since posting a 52-week high in mid-April, shares have fallen by about 27%. Rival Dollar General’s share price is down 4.2% for the past 12 months and about 25% since mid-April. Poor reports from both Walmart and Target have pummelled the stock in the past week, and expectations set before then are almost certainly too optimistic.

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