Earnings Previews: Bilibili, Dollar General, Macy's

Investing

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Published: May 30, 2023 11:19 am

In mid-morning trading on Tuesday, the Dow Jones industrials were down 0.36%, the S&P 500 up 0.17% and the Nasdaq up 0.68%.

After U.S. markets close Tuesday, earnings reports from Box, HP and Hewlett Packard Enterprise are due. Tanker shipping company Frontline reports results before markets open on Wednesday, and then C3.ai, CrowdStrike, Nordstrom and Salesforce will report quarterly results later in the day.

Here is a preview of three companies reporting quarterly results before early Thursday.

Bilibili

Bilibili Inc. (NASDAQ: BILI) offers gaming, video and live broadcasting platforms for children and teens in the People’s Republic of China. Over the past year, Bilibili shares have dropped by about 21.5%. From its 52-week high posted early last June, the stock is down almost 45%. The company last week instituted an up-charge for some exclusive videos in an effort to gin up additional revenue. Like its introduction of pay-per-view video last July, this new charge is unlikely to sit well with users.

Of 37 brokerages covering Bilibili, 29 have a Buy or Strong Buy rating, with the others rating the stock at Hold. At a recent price of around $16.50 per share, the upside potential based on a median price target of $25.82 is 56.5%. At the high target of $39.76, the implied upside is 141%.

The consensus estimates call for fiscal first-quarter revenue of $725.99 million, which would be down 18.5% sequentially but up 9.2% year over year. Analysts have forecast an adjusted loss per share of $0.41, better than the prior quarter’s loss of $0.48 per share and considerably better than the year-ago loss of $0.66 per share. For full fiscal 2023 ending in December, analysts expect Bilibili to post a per-share loss of $1.23, compared to a loss last year of $2.46, on sales of $3.52 billion, up 10.8%.

Bilibili is not expected to post a profit in 2023 or 2024. In 2025, a projected profit of $0.42 per share yields a price multiple of 39.5. The stock’s 52-week trading range is $8.23 to $30.35. Bilibili does not pay a dividend. Total shareholder return for the past year is negative 21.01%.

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Dollar General

Shares of Dollar General Corp. (NYSE: DG) have declined by about 9.4% over the past 12 months, including a drop of 18.25% for the year to date. Already one of the nation’s largest retailers based on the number of stores, Dollar General plans to spiff up its stores and add more staff so that the new customers it expects to attract during the economic slowdown will be willing to return. The company also plans to open more than 1,000 new stores, driving revenue higher.
Analysts remain mostly bullish on Dollar General. Of 30 brokerages covering the off-price retailer, 20 have rated the stock a Buy or Strong Buy, and 9 more rated the shares a Hold. At a current price of around $201.00, the upside potential based on a median price target of $242.00 is 20.4%. At the high price target of $285.00, the upside potential is 41.8%.

First-quarter revenue is forecast at $9.46 billion, down 7.2% sequentially and up 8.1% year over year. Adjusted earnings per share (EPS) are forecast at $2.39, down 19.3% sequentially and down 0.8% year over year. For the full 2023 fiscal year ending in January, Dollar General is currently expected to report EPS of $11.23, up 5.2%, on sales of $40.01 billion, up 5.7%.

The company’s shares traded at 17.9 times expected 2024 EPS, 16 times estimated 2025 earnings of $12.54, and 14.4 times estimated 2026 earnings of $13.92 per share. The stock’s 52-week range is $200.14 to $262.59. The low was posted early Tuesday morning. Dollar General pays an annual dividend of $2.36 (yield of 1.15%). Total shareholder return for the past year was negative 11.06%.

Macy’s

Shares of Macy’s Inc. (NYSE: M) have tumbled by more than 38% over the past 12 months. Since reaching a 52-week high in early February, the share price has declined by more than 44% to a new 52-week low posted early Tuesday morning. Shares got a boost when Macy’s reported better-than-expected holiday quarter results and offered up a strong outlook for the new fiscal year. Investors, however, do not appear to think the rosy outlook is going to be met. The company’s dividend yield also could be threatened by a miss.

Just five of 16 analysts rate Macy’s stock as a Buy or a Strong Buy. Another nine have Hold ratings. At a share price of around $14.00, the upside potential based on a median price target of $25.00 is about 78.6%. Based on a high price target of $29.00, the potential upside on the shares is 107%.