Earnings Previews: Campbell Soup, KE Holdings, Polestar Automotive

Before markets opened on Tuesday, Best Buy beat consensus earnings per share (EPS) and revenue estimates, and it issued in-line guidance for fiscal 2024. The stock was up 5.7% in mid-morning trading on Tuesday.

Big Lots also beat Wall Street’s estimates on both the top and bottom lines. Not much was expected (a loss per share of $4.12 and an 18.5% drop in revenue), but Big Lots beat the loss per share estimate by $0.87 and the revenue estimate by enough to hold the year-over-year decline to 15.4%. Shares soared around 26%.

Nio reported results that failed to reach either the loss-per-share or revenue estimate. Sales fell by nearly 15% year over year. Even upside guidance could not overcome the disappointing outcome in a quarter when most analysts and investors were expecting bad news–just somewhat less of it. Shares traded down 5.9%.

Hewlett Packard Enterprise and HP are reporting quarterly results after markets close Tuesday. There are no notable earnings reports due out early Wednesday. Look for Chewy, CrowdStrike, Pure Storage and Salesforce will post their earnings later in the day.

Here is a look at what analysts expect when these three companies release quarterly results first thing Thursday morning.

Campbell Soup

Over the past 12 months, shares of Campbell Soup Co. (NYSE: CPB) have declined by more than 16%, including a drop exceeding 25% in 2023. Shares retreated more than 8% following the announcement earlier this month that the venerable consumer staples firm had agreed to acquire Sovos Brands, the owner of a number of food brands, including Rao’s pasta sauce and yogurt brand noosa. Maybe investors were not too crazy about Campbell’s plan to finance the acquisition with new debt. The company’s steady dividend yield just cannot satisfy everyone.

Analysts are less than bullish on the shares. Of 18 brokerages covering the stock, nine have a Hold rating, while five have it rated at Strong Sell. At a recent price of around $42.50 a share, the stock’s implied gain based on a median price target of $48.00 is 12.9%. At the high price target of $61.00, the upside potential is about 43.5%.

For the company’s fourth quarter of fiscal 2023, the consensus revenue estimate is $2.06 billion, which would be down about 7.7% sequentially but up 3.5% year over year. Adjusted EPS are forecast at $0.50, down 26.1% sequentially and by 10.7% year over year. For the fiscal year that ended in July, estimates call for EPS of $3.00, up 5.3%, on sales of $9.35 billion, up by about 9.3%.

Campbell Soup stock trades at 14.1 times expected 2023 EPS, 13.7 times estimated 2024 earnings of $3.10 and 13.1 times estimated 2025 earnings of $3.24 per share. Its 52-week trading range is $41.56 to $57.77. The company pays an annual dividend of $1.48 (yield of 3.52%). Total shareholder return for the past year was negative 13.79%.

KE Holdings

KE Holdings Inc. (NYSE: BEKE) is a Beijing-based online real estate brokerage. The share price is down by about 11.5% over the past 12 months, including an increase of 15.7% so far this year. Chinese real estate giant Evergrande is bleeding value after trading in the stock resumed after an 18-month suspension. Shares have lost 99% of their value in the past three years. That may have something to do with KE’s jump of more than 11% in early trading on Tuesday, but a just-announced cut in mortgage rates is probably the big reason.

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