Oh, Canada! The week of June 28 sees a number of notable Canadian companies’ earnings reports, including one of our northern neighbors biggest entertainment companies and a telecommunications firm.
American investors may want to pay attention to what is happening north of the border, according to a recent report from Bank of America (NYSE:BAC). In a note to clients, BofA strategist Ohsung Kwon recommended that American investors look to Canadian stocks to capitalize on the economic reopening as they represent a cheaper alternative to “frothy” U.S. equities.
Kwon stressed that Canada’s benchmark Toronto Stock Exchange (TSE) has plenty of exposure to commodities and cyclical companies, while also trading at its steepest discount to U.S. stocks since the technology bubble more than 20 years ago. The TSE has risen 16% year-to-date, while the S&P 500 index has gained 13%.
As well, there are a handful of great American companies reporting financial results this week. Here are seven stocks to have on your watch lists as they report earnings the week of June 28.
- Corus Entertainment (TSX:CJR-B.TO, OTCMKTS:CJREF)
- Constellation Brands (NYSE:STZ)
- Bed Bath & Beyond (NASDAQ:BBBY)
- Shaw Communications (NYSE:SJR)
- General Mills (NYSE:GIS)
- Micron Technology (NASDAQ:MU)
- Walgreens Boots Alliance (NASDAQ:WBA)
Earnings Reports for the Week of June 28: Corus Entertainment (TSX:CJR-B.TO, OTCMKTS:CJREF)
First up is Canadian multi-media company Corus Entertainment. In addition to owning several radio and television stations in Canada, Toronto-based Corus also owns the animation studio “Nelvana” that produces popular kids programs such as the Care Bears, Babar, Pippi Longstocking and Beyblade, among others. Corus also owns Kids Can Press that publishes children’s books, many of them based on the Nelvana cartoon series.
CJR.B stock has done well during the pandemic as demand strengthened for the content it produces. Year-to-date, the share price is up 37% at $5.85 a share. The stock has risen 62% over the past 12-months. Analysts expect the company to report revenue of $395 million CAD ($320 million) and earnings per share (EPS) of 20 Canadian cents when it reports financial results for the May-end quarter on June 29. Moving forward, Corus Entertainment is focused on developing more partnerships in the U.S. and selling its content to American audiences.
Constellation Brands (STZ)
Alcohol giant Constellation Brands also reports earnings this week, on Wednesday, June 30. The largest beer importer in the U.S. by sales, Constellation Brands makes popular brands such as Corona and Modelo beer, Robert Mondavi wine and Casa Noble Tequila. The company is also heavily invested in recreational cannabis. In 2017, Constellation Brands invested $200 million in Canopy Growth, which was then the largest Canadian cannabis producer. The two companies are focused on cannabis-infused drinks.
STZ stock is up a marginal 5% year-to-date at $226.66, but is up 32% over the past 52-weeks. The company is expected to get a lift in the coming six months as bars and restaurants reopen and demand for Constellation’s products grows. Analysts are expecting the beverage maker to report EPS of $2.43 on revenue of $2 billion when the company reports on Wednesday. Analysts also have a strong consensus “buy” rating on the stock — 15 of 23 analysts — with a median price target of $265.00 a share, some 17% higher than the stock’s current level.
Bed Bath & Beyond (BBBY)
A bellwether consumer stock, Bed Bath & Beyond’s shares have been charging ahead this year. In the first six months of 2021, BBBY stock is up 68% at $30.20 a share. In the last year, the stock has skyrocketed 223%. Much of the jump in the share price can be attributed to the fact that Bed Bath & Beyond was targeted by retail traders who frequent the r/WallStreetBets Reddit thread. The company’s stock got pushed higher as a so called “meme stock.”
However, the retail chain that specializes in sheets, towels, pillows and other household items has proven to be popular with consumers who were sheltering-in-place at home during the pandemic and looking to decorate their personal space. Being targeted by the Reddit crowd is not the only reason Bed Bath & Beyond’s stock has moved higher. Investors nerves were soothed recently after Bank of America issued a report on BBBY stock, saying it is safe to purchase the shares and that the retailer’s fundamentals remain sturdy.
Analysts forecast that Bed Bath & Beyond will report quarterly revenue of $1.9 billion and EPS of 9 cents on June 30.
Shaw Communications (SJR)
We’ll also get a snapshot of the financial health of Canadian telecom company Shaw Communications after the market close on June 30.
The Calgary, Alberta-based company provides telephone, television, internet and mobile services to Canadians across the Great White North. The upcoming quarterly results will likely be one of the last from Shaw Communications as its shareholders recently voted in favor of a proposed sale to rival Rogers Communications (NYSE:RCI) for $26 billion CAD ($21 billion). The deal, subject to regulatory approval, is expected to close next year.
Prior to being targeted for a takeover, Shaw had been struggling. Last year, the company sacked 10% of its workforce as it struggled amid the coronavirus pandemic. Shaw and other Canadian telecoms have also been grappling with increased regulatory oversight and mounting pressure from the federal government to lower wireless costs in Canada, which are among the highest in the world, and, on average, 25% higher than comparable plans in the U.S.
Analysts expect Shaw Communications to report quarterly sales of $1.1 billion CAD and EPS of 27 Canadian cents when it reports its latest results on June 30, ahead of the July 1 Canada Day holiday.
General Mills (GIS)
Another indication of how consumers are faring will come when food and packaged good company General Milles reports financial results on June 30. The maker of everything from Cheerios cereal and Pillsbury cookie dough to Häagen-Dazs ice cream and Yoplait yogurt is forecast to report revenue of $4.3 billion and EPS of 85 cents.
While the Minneapolis-based company’s sales have been robust over the past year (up 8% year-over-year in the previous quarter), the company recently announced that it is laying off up to 1,400 employees worldwide to best position itself for a post-pandemic operating environment.
The layoffs drew mixed reviews from analysts, many of whom remain bullish on GIS stock despite that fact that it is only up 0.20% year-to-date at $59.15 a share. The share price has lost 2% over the past 12 months and is down 18% in the last five years.
Moving ahead, General Mills will try to maintain the strong sales it enjoyed during the pandemic as consumers were forced to eat at home more while restaurants were closed. The median price target on General Mills stock is $64, representing potential 8% upside.
Micron Technology (MU)
Boise, Idaho-based Micron Technology is a leading manufacturer of USB flash drives that are used to for computer memory and data storage. While MU stock is up a modest 9% year-to-date, it is up 64% over the past year at its current price of $80.58. And analysts see a lot more upside ahead. Rosenblatt Securities recently slapped a one-year price target of $165 on Micron stock, which is more than double its current share price. The median price target on the stock is $117.50, which would be 46% higher from current levels. The high estimate is $172.
The reason for optimism is that demand for the memory chips that Micron Technology makes is exploding due to growing sales of personal computers and 5G smartphones, as well as data center operators upgrading their server storage capacity to handle the increased load that’s resulted from people working and going to school online from home.
Analysts forecast that Micron will report revenue of $7.2 billion and EPS of $1.69 when it reports its latest quarterly results on June 30.
Walgreens Boots Alliance (WBA)
The pace of Covid-19 vaccinations will come into focus when drugstore chain Walgreens Boots Alliance reports earnings on July 1. Like other pharmacies, Walgreens Boots Alliance has been distributing vaccines at its stores, which should help boost its upcoming results.
WBA stock has been under pressure since media reports surfaced that online retailer Amazon (NASDAQ:AMZN) is considering opening brick-and-mortar pharmacies which would compete against Walgreens locations.
Spurred by increased foot traffic at its stores due to the vaccine rollout, WBA stock has risen 26% year-to-date to $52.10 a share. In the past 52-weeks, the stock has climbed 24% higher. The shares really started moving as vaccines against Covid-19 came to market early this year.
For this week’s earnings report, analysts anticipate that Walgreens will post revenue of $33.5 billion and EPS of $1.16. The median price target on the shares is $56, which would suggest an 8% upside from current levels.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.