Earnings Previews: BlackBerry, Lululemon, Chewy, Walgreens
Monday afternoon’s and Tuesday morning’s noteworthy earnings reports included just two stocks, an EV maker and the co-developer of a COVID-19 vaccine.
Tuesday afternoon’s and Wednesday morning’s noteworthy earnings reports include a security software company, a sports apparel giant, a pet supply company and a Dow 30 component.
BlackBerry Ltd. (NYSE: BB) was once the world’s largest maker of cell phones. The company was late to the switch to smartphones, though, and it has repurposed itself as a supplier of security software and a platform for automobile automation. Last year shares posted an overall gain of about a third before dropping back to a bump of just 3.3% for the full year.
The stock spiked again in late January when retail investors went after short sellers in the stock and drove the price up by more than 275%. Shares were up about a third for the year to date at Friday’s close.
The most recent analyst ratings on the stock were downgrades, essentially from Neutral to Sell. With the shares trading at around $9.30 on Monday and a consensus price target of $7.69, the stock likely is overpriced.
Analysts expect BlackBerry to post fiscal fourth-quarter 2021 quarterly earnings per share (EPS) of $0.03 on revenue of $245.1 million when it reports results Tuesday after markets close. That’s a year-over-year drop of two-thirds in EPS and a 16% decline in revenue. For the full 2021 fiscal year, the company is forecast to post EPS of $0.18 (up 38%) on sales of $942.2 million (down 14.3%).
At Monday’s price, the shares trade at a multiple of 53 times expected 2021 earnings, 63 times expected 2022 earnings and 64 times expected 2023 earnings.
Last year, Lululemon Athletica Inc. (NASDAQ: LULU) posted a bump of more than 50% in its share price, even including a drop of more than 40% in mid-March. When the company reports fourth-quarter 2020 results after markets close Tuesday, analysts are expecting the athletic apparel maker to post solid gains over the prior quarter and full year.
Analysts remain bullish on the stock, with Piper Sandler Monday morning maintaining its Overweight rating while lowering the price target from $490 to $478. Last week Morgan Stanley maintained its Equal Weight rating and lowered the price target from $400 to $386. The stock is down about 10% so far in 2021, due in part to investors deciding that pandemic winners like Lululemon are not going to continue posting big numbers. Piper Sandler sees the lower price as a “compelling entry point.”
Fourth-quarter EPS is forecast at $2.49, up 9.2% year over year, and revenue is forecast up 18.9% at $1.66 billion. For the full fiscal year, Lululemon is expected to report EPS of $4.58, down about 7% year over year, on sales of $4.33 billion, up 8.9%.
Lululemon’s stock traded at around $311 Monday morning, in a 52-week range of $177.77 to $399.90. The consensus price target on the stock is $403, implying an upside potential of nearly 30%.
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