The three major U.S. equity indexes closed lower again Tuesday. The Dow Jones industrials ended the day down by 1.03%, the S&P 500 closed 1.44% lower and the Nasdaq pulled back 2.00%. Ten of 11 sectors closed lower, with energy (−2.65%) and communications services (−2.57%) falling the most. Utilities (0.66%) posted Tuesday’s only gain.

The U.S. Energy Information Administration (EIA) will release the weekly petroleum inventories report Wednesday morning. The American Petroleum Institute (API) reported a drop of more than 6.4 million barrels in the crude inventory. Crude oil production totals 12.1 million barrels per day, according to API, an increase of 400,000 daily barrels since the beginning of the year. On Friday, the Bureau of Labor Statistics will issue its report on the producer price index (PPI) for November. Economists expect the index to rise by 0.2%, as it did in October. Core PPI is expected to rise by 0.2% compared to no month-over-month increase in October.

The three major indexes traded lower in Wednesday’s premarket session.

After U.S. markets closed Tuesday, MongoDB reported adjusted earnings per share (EPS) of $0.23, while the consensus estimate had called for a loss per share of $0.17. Revenue beat the estimate by about 9.5%, and the company issued upside guidance for its fourth quarter. The stock traded up more than 27% Wednesday morning.

Toll Brothers also beat estimates on the top and bottom lines and issued guidance for the first quarter and all of fiscal 2023. For the year, the homebuilder expects sales of 8,000 to 9,000 units, with a gross margin of 27% and an average delivered price of $965,000 to $985,000 per unit. Shares traded up 1.2%.

SentinelOne reported better-than-expected revenue and a smaller-than-expected loss per share. Shares traded essentially flat Wednesday morning.

Stitch Fix missed consensus estimates for both EPS and revenue. Active client totals also fell. The company also issued downside revenue guidance for the current (second) quarter but raised its outlook for adjusted EBITDA. The stock traded up more than 3%.

Before markets opened Wednesday, Academy Sports beat the consensus EPS estimate but missed on revenue. The retailer issued mixed guidance for fiscal 2023, raising its EPS outlook above consensus but lowering the top end of revenue guidance below the consensus forecast. Shares traded down about 2.1% in Wednesday’s premarket.

Campbell Soup beat estimates on both the top and bottom lines. The venerable food producer also raised full-year EPS and revenue guidance beyond consensus estimates. Shares traded up 3.7% early Wednesday.

Ciena, Express and GameStop are set to report quarterly results late Wednesday or early Thursday.

Here is a preview of three companies set to report quarterly results later on Thursday or first thing Friday morning.

Chewy Inc. (NYSE: CHWY) is a pure-play e-commerce provider of pet supplies and a subsidiary of privately held PetSmart. Over the past 12 months, the stock has dropped by more than 31%. That is almost half the amount the stock was down at the end of the previous quarter. The stock has added more than 35% since the beginning of the fourth calendar quarter, compared to an increase of around 8% in the consumer cyclical sector in which it is categorized. Chewy is set to report quarterly results after markets close on Thursday.

Analysts remain moderately bullish on the stock. Of 25 brokerages covering the company, 15 have a Buy or Strong Buy rating, while nine more have a Hold rating. At a recent share price of around $41.70, the upside potential to a median price target of $43.50 is 4.3%. At the high price target of $57.00, the upside potential is 36.7%.

Revenue in the third quarter of fiscal 2023 is forecast to come in at $2.46 billion, which would be up about 1.1% sequentially and by 11.3% year over year. Analysts expect an adjusted loss per share of $0.06, compared to the prior quarter’s EPS of $0.05 and the year-ago loss of $0.07 per share. For the full fiscal year, analysts forecast a per-share loss of $0.06, compared to last year’s loss per share of $0.17, on sales of $9.95 billion, up 11.9%.

Chewy stock trades at 70.4 times estimated 2025 EPS of $0.59. The company’s enterprise value to sale multiple for 2023 is 1.8. For 2024, the multiple is 1.6, based on estimated sales of $11.1 billion. The stock’s 52-week trading range is $22.22 to $62.54. Chewy does not pay a dividend. Total shareholder return for the past year is negative 31.4%.

Costco

Shares of Costco Wholesale Corp. (NASDAQ: COST) have slipped by more than 11% over the past 12 months, including a drop of more than 31% between early April and mid-May. Since that 52-week low in May, shares have added about 16%. Costco will release its earnings report on Thursday.

Monthly sales growth has risen by 6% to 10% over the past three months, and some analysts expect Costco to follow the lead of Sam’s Club and raise membership fees. Costco customers are loyal, and with prices rising on everything else, a 10% increase in the membership cost is unlikely to cause customers to flee.

Analysts are positive on the stock, with 20 of 34 having a Buy or Strong Buy rating. The other 11 rate the shares at Hold. At a price of around $481.20 a share, the upside based on a median price target of $565.00 is 17.4%. At the high price target of $650.00, the upside potential is 35.1%.

Revenue for the first quarter of fiscal 2023 is forecast at $54.68 billion, down 24.2% sequentially but up 8.6% year over year. Adjusted EPS are forecast at $3.16, down 24.8% sequentially and 6.4% higher year over year. For the full fiscal year ending in August, current estimates call for EPS of $14.63, up 10.2%, on sales of $244.89 billion, up 7.9%.

Costco stock trades at 32.9 times expected 2023 EPS, 29.5 times estimated 2024 earnings of $16.33 and 25.5 times estimated 2025 earnings of $18.89 per share. The stock’s 52-week range is $406.51 to $612.27. The company pays an annual dividend of $3.60 (yield of 0.73%). Total shareholder return for the past year was negative 10.6%.

Beijing-based electric vehicle maker Li Auto Inc. (NASDAQ: LI) has seen its share price tumble by more than 25% over the past 12 months. The stock price reached its peak in late June and has dived by more than 43% since then. Li Auto reports quarterly results early Friday.

Since late October, the shares have added more than 57% as first the rumors and then the announcement of the government’s easing of Covid lockdowns have raised investors’ hopes for a turnaround. Li delivered 15,034 vehicles in November, an increase of 11.5% year over year and a monthly record for the company. The stock jumped nearly 19% on the day of the report.

Of 26 brokerages covering the firm, 23 have a Buy or Strong Buy rating. At a share price of around $23.10, the upside potential based on a median price target of $36.83 is 59.4%. At the high price target of $58.00, the upside potential is around 150%.

Third-quarter revenue is forecast at $1.42 billion, up 9.1% sequentially but 81.7% lower year over year. Analysts have forecast a loss per share of $0.05, compared to a loss of $0.03 per share in the prior quarter and EPS of $0.05 in the same quarter last year. For the 2022 fiscal year, current estimates call for EPS of $0.11, down 40.5, on sales of $6.72 billion, up about 58.1%.

Li Auto’s stock trades at 201.6 times expected 2022 EPS, 75.4 times estimated 2023 earnings of $0.31 and 35.1 times estimated 2024 earnings of $0.66 per share. The stock’s 52-week range is $12.52 to $41.49, and the company does not pay a dividend. Total shareholder return in the past year is negative 25.3%.

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Lululemon

Lululemon Athletica Inc. (NASDAQ: LULU) shares have declined by nearly 15% over the past 12 months. The stock’s 52-week high was posted exactly one year ago. Since the beginning of December, six brokerages have raised their price targets on the stock, indicating that the brand’s customers are not about to shop for a cheaper alternative. Demand is expected to remain strong, and Lululemon is likely to continue its streak of eight consecutive quarters of double-digit sales growth. The company reports results after Thursday’s closing bell.

Of 31 brokerages covering Lululemon, 20 have a Buy or Strong Buy rating and nine more rate the stock at Hold. At a share price of $370.00, the upside potential based on a median price target of $395.00 is 6.3%. At the high price target of $542.00, the upside potential is 46.5%.

Third-quarter fiscal 2023 revenue is forecast at $1.81 billion, down 3.0% sequentially but up 24.8% year over year. Adjusted EPS are forecast at $1.96, down 10.8% sequentially and 21.0% higher year over year. For the full fiscal year ending in January, analysts expect Lululemon to report EPS of $9.91, up 27.2%, on sales of $7.93 billion, up 26.8%.

Lululemon stock trades at 37.3 times expected 2023 EPS, 32.5 times estimated 2024 earnings of $11.39 and 27.7 times estimated 2025 earnings of $13.38 per share. The stock’s 52-week range is $251.51 to $442.50. The company does not pay a dividend. Total shareholder return for the past year is negative 14.9%.

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