Earnings Previews: Alibaba, Bath & Body Works, KE Holdings

Bath & Body Works

Over the past 12 months, Bath & Body Works Inc. (NYSE: BBWI) stock has dropped by about 31.4%. Since the company split off from Victoria’s Secret and was renamed in early August of 2021, its stock is down about 47%. The company operates about 1,750 company-owned locations and 338 franchised locations worldwide under brand names Bath & Body Works, White Barn, C.O. Bigelow and others. A new line of products for men hit the shelves on Monday, with hopes of continuing the company’s growth in its male customer base.

Of 20 analysts covering the firm, 12 have a Buy or Strong Buy rating and the others rate it at Hold. At a trading price of around $33.00, the upside potential based on a median price target of $48.00 is 45.5%. At the high price target of $78.00, the upside potential is 136.4%.

Analysts have forecast revenue at $1.39, down 51.8% sequentially and by 4.1% year over year. EPS are pegged at $0.26, down 86.2% sequentially and 59.4% lower year over year. For the full fiscal year ending in January of 2024, analysts estimate EPS of $2.97, down 12.7% on sales of $7.5 billion, down 0.8%.

Bath & Body Works stock trades at 11.1 times expected 2024 earnings, 9.1 times estimated 2025 earnings of $3.60 and 7.8 times estimated 2026 earnings of $4.24 per share. Its 52-week range is $25.75 to $50.78, and the company pays an annual dividend of $0.80 (yield of 2.42%). Total shareholder return for the past year was negative 30.59%.

KE Holdings

KE Holdings Inc. (NYSE: BEKE) is a Beijing-based online real estate brokerage. The share price is up about 32% over the past 12 months, but since mid-February, the stock is down 16.8%. Chinese real estate has had its ups and downs since the government lifted its strict lockdowns. Most recently, the market has turned from up to down again. People are reluctant to get a mortgage, cutting into sales. China’s property sector accounts for 20% of national gross domestic product, so this is a real stumbling block for a recovering economy.

Of 21 analysts covering the stock, 20 have a Buy or Strong Buy rating and the other has a Hold rating. At a share price of around $16.50, the implied upside based on a median price target of $24.74 is about 50.5%. At the high price target of $30.56, the upside potential is 85.2%.

Analysts expect KE Holdings to report first-quarter 2023 revenue of $2.53 billion, up 4.2% sequentially and by 27.8% year over year. EPS are pegged to come in at $0.25, nearly 33% higher sequentially and up from a break-even finish in the year-ago quarter. For the full 2023 fiscal year, EPS are forecast at $0.73, up 111.6%, on sales of $10.67 billion, up 21.3% year over year.

KE Holdings stock trades at 22.6 times expected 2023 EPS, 17.8 times estimated 2024 earnings of $0.0.93 and 16.2 times estimated 2025 earnings of $1.02 per share. Its 52-week range is $9.09 to $21.08, and the company does not pay a dividend. Total shareholder return over the past year is 36.05%.

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