Retail

Earnings Previews: Best Buy, Dick's, Dollar Tree

Of the three companies we previewed earlier this week that reported quarterly results after markets closed Thursday, Applied Materials missed estimates on both revenue and profits while Workday and Ross Stores beat on both. Shoe retailer Foot Locker beat both estimates as well Friday morning.

There are no earnings reports due out after markets close Friday and just one of note, Meten, on tap for Monday morning. While not a well-known stock, Meten has offered educational and tutoring services in China for more than a decade. The company was slammed twice this year by government policy changes and has pivoted to a blockchain/crypto-mining effort. More than 94 million shares of Meten stock are traded every day.

Earlier on Friday, we previewed one stock reporting late Monday and two reporting before markets open on Tuesday: Medtronic, Xpeng and Zoom Video.

The Thanksgiving holiday essentially means next week has just three days. Yet, there are several earnings of note in those three days. Here are three retailers also set to report quarterly results first thing on Tuesday.

Best Buy

Over the past 12 months, shares of technology retailer Best Buy Co. Inc. (NYSE: BBY) have added more than 18% to their price. Since October 1, the shares have added more than 29%, accounting for more than all the share price growth over the past year. The stock has been on a roller-coaster ride this week that has left the share price virtually flat. Strong retail sales reported earlier this week, along with strong earnings from other retailers, should be good signs for Best Buy as the holiday shopping season enters its critical days.

Analysts have mixed sentiments on the stock. Of 29 brokerages covering the company, 12 rate the shares a Hold and 14 rate the stock a Buy or Strong Buy. At a recent price of around $136.30 a share, the stock is priced above its median price target of $134.50. Based on a high price target of $157, the upside potential is just over 15%.

For the company’s fiscal 2022 third-quarter revenue, analysts are forecasting $11.59 billion, which would be down 2.2% sequentially and 2.2% lower year over year. Adjusted earnings per share (EPS) are forecast at $1.94, nearly 35% lower sequentially and down 5.8% year over year. For the full fiscal year, current estimates call for EPS of $9.99, up 26%, on sales of $51.76 billion, up 9.5%.

Best Buy’s share price to earnings multiple for fiscal 2022 is 13.7. For fiscal 2023, the multiple to estimated EPS of $9.48 is 14.4, and for 2024, it is 13.7 times estimated EPS of $10.00. The stock’s 52-week range is $95.93 to $136.78. Best Buy pays an annual dividend of $2.80 (yield of 2.06%). Total shareholder return for the past year is 17.7%.