Earnings Previews: Best Buy, Deere, HP Inc., Nordstrom, SentinelOne

The three major U.S. equity indexes closed higher Friday. The Dow ended the day up 0.59%, the S&P 500 closed 0.48% higher, and the Nasdaq Composite closed up just 0.01%. Nine of 11 sectors closed higher, with utilities (up 2%) and healthcare (up 1.2%) leading the winners. Energy (down 0.9%) and communications services (down 0.35%) were Friday’s two losers.

There are only a small number of economic reports due during this holiday-shortened week. The weekly report on claims for unemployment benefits, the report on new home sales in October, and the weekly report on oil inventories are all due out on Wednesday.

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

After U.S. markets close Monday afternoon, Dell Technologies, Urban Outfitters, and Zoom Video will report quarterly results. American Eagle Outfitters, iQIYI, and Medtronic are on deck to report results before markets open Tuesday.

Here’s a look at three companies set to report results Tuesday and Wednesday.

Best Buy

Over the past 12 months, shares of technology retailer Best Buy Co. Inc. (NYSE: BBY) have plummeted by about 43.5%. The 52-week high was posted on Nov. 22 last year, and the shares have fallen by 43.5% since then. When Target reported poor quarterly results last week, Best Buy dropped 7% on the news. It has gained about half of that back, but weak PC sales will certainly affect the company’s quarterly report. Best Buy reports results before markets open Tuesday.

Analysts are mixed on the stock. Of 27 brokerages covering the company, 17 rate the shares a Hold, and eight have a Buy or Strong Buy rating on the stock. At a current price of around $72.00, the upside potential based on a median price target of $80.00 is 10%. Based on a high price target of $110.00, the upside potential is 52.8%.

For the company’s fiscal 2023 third-quarter revenue, analysts are forecasting $10.3 billion, down 0.3% sequentially and a decline of 13.4% year over year. Adjusted EPS is forecast at $1.02, down 33.6% sequentially and a decrease of 51% year over year. For the full 2023 fiscal year ending in January, current estimates call for EPS of $6.16, down 38.5%, on sales of $45.91 billion, a drop of 11.3%.

The stock trades a multiple of 11.7 times expected 2023 EPS, 10.6 times estimated 2024 earnings of $6.79, and 9 times estimated 2025 earnings of $7.99 per share. The stock’s 52-week range is $60.78 to $141.97. Best Buy pays an annual dividend of $3.52 (yield of 4.89%). Total shareholder return for the past year is negative 44.9%.

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