We’re in the final stretch of earnings reports season, with only a handful of well-known companies left to announce their quarterly results.
The final prints come amid an increasingly volatile market that continues to see stocks swing sharply higher and lower, and as the technology-heavy Nasdaq exchange has briefly fallen into bear market territory, defined as a decline of 20% or more from recent highs. The volatility has made it difficult for stocks to sustain any momentum following a better-than-expected report, and exacerbated declines after any earnings misses.
Despite the current market conditions, there are several companies announcing their latest numbers next week that are looking to impress analysts and shareholders, and build confidence in their stock. These include a major resort operator, construction company, delivery firm, meme stock and Canadian cannabis producer.
Here are seven stocks reporting earnings the week of March 14:
- Vail Resorts (NYSE:MTN)
- Futu Holdings (NASDAQ:FUTU)
- Lennar (NYSE:LEN)
- Dollar General (NYSE:DG)
- FedEx (NYSE:FDX)
- GameStop (NYSE:GME)
- Hexo Corp. (NASDAQ:HEXO)
Earnings Reports: Vail Resorts (MTN)
It’s been a difficult start to the year for Vail Resorts, the Broomfield, Colorado-based company that operates some of the best known and most popular ski and golf destinations in the world, including Whistler Blackcomb in Canada, the Perisher Ski Resort in Australia, Stowe Mountain Resort in Vermont, and its namesake resort in Vail, Colorado. Year to date, MTN stock is down 25% at $240.13 per share. The decline has been blamed on inflationary pressures that have raised costs and employee wages, as well as staff shortages at many resorts and a crush of tourists eager to put the pandemic behind them that has resulted in long lines and overcrowding at many locations.
The upcoming quarterly earnings will tell analysts and investors a lot about Vail Resorts ability to right its ship and get its operations around the world humming again after many locations were shutdown for nearly two years during the Covid-19 pandemic.
In an effort to make up the lost ground, Vail Resorts announced on March 8 that it is extending the ski season at several of its resorts, including in Vail, Colorado, which will now stay open for skiing until May 1. The extensions make 2021/22 the longest winter season in the company’s history. Analysts have forecast that Vail Resorts will report earnings per share (EPS) of $5.70 on revenues of $960.24 million for Q4 2021.
Futu Holdings (FUTU)
Few stocks have been as battered in recent months as Chinese brokerage Futu Holdings. Over the last six months, FUTU stock has plunged 75% to now trade at $27.86 a share. The decline is particularly painful when you consider that Futu Holdings stock increased 234% in the first two months of 2021 before erasing all those gains and going deep into the red.
The losses are the direct result of Chinese regulators cracking down on publicly traded companies in the nation of 1.4 billion people and targeting sectors such as cryptocurrencies and high-tech for new restrictions.
Futu Holdings itself was singled out for punishment by Chinese authorities. Last summer, Futu Holdings was accused of violating data privacy laws with its trading platform and running afoul of China’s “Personal Information Protection Law.” The news was enough to send FUTU stock sharply lower and it has not yet recovered. Could a strong fourth quarter print on March 15 help?
Shareholders will be hoping that the company can maintain its impressive growth, which saw revenue rise 159% and net income grow 191% in the first nine months of last year. Wall Street is looking for Futu Holdings to report EPS of $1.05 and revenues of $281.71 million for the final quarter of 2021.
Earnings Reports: Lennar (LEN)
The latest quarterly print from Lennar, the biggest home construction company in the U.S. with operations in 21 states, will provide a good snapshot of the current state of the housing market.
So far this year, LEN stock has declined 22% to now trade at $86.98 a share. The decline comes with inflation at a 40-year high in the U.S. and as the Federal Reserve is about to start raising interest rates. In anticipation of higher rates, the average 30-year mortgage rate in America is now close to 4%, up from less than 3% this time last year. Higher financing costs are expected to keep many homebuyers out of the market and cool off the housing sector this year.
The war in Ukraine and record prices for many of the materials needed in home construction, from wood to cement, is further complicating the housing market this year and putting pressure on builders such as Lennar. However, there’s hope that a strong labor market and rising wages will offset some of the cost pressures and keep demand for housing buoyant in many markets throughout the country.
We’ll get a better sense of whether this, in fact, is the case when Lennar reports its latest financials on March 16. Analysts are expecting the construction company to announce EPS of $2.60 on revenues of $6.08 billion.
Dollar General (DG)
Dollar General thrived during the pandemic, and the retail chain that now has more than 17,000 outlets nationwide could see increased foot traffic as inflation pushes consumer prices higher.
The company continues to grow at a fast clip, opening about 500 new stores last year even as Covid-19 continued to disrupt the economy and create uncertainty. Dollar General is also growing through its PopShelf chain of home goods and its DGX branded grab-and-go retail chain.
The accelerated growth has enabled DG stock to perform better than most securities. Over the last six months, Dollar General’s stock has declined only 5% and is actually up 10% over the last year at $206.13.
However, Dollar General’s stock is not cheap, with a price-to-earnings (P/E) ratio of 20. Among retailers in its category, only mighty Costco Wholesale (NASDAQ:COST) has a higher P/E at 43.
Even still, Dollar General has put out an impressive string of better-than-expected earnings with the exception of a rare miss in the third quarter of last year, when same-store sales decreased 0.6%, which the company attributed to increased administrative and labor costs, and analysts chalked up to tough year-over-year comparables. For the fourth quarter of 2021, Wall Street is looking for Dollar General to report EPS of $2.56 on revenues of $8.70 billion.
Earnings Reports: FedEx (FDX)
Shareholders of FedEx will be hoping that the logistics and delivery giant’s latest earnings will move its stock out of the funk it has been in for more than a year now.
After running higher at the outset of the pandemic, FDX stock traded sideways in the first half of last year before falling 16% over the past six months. The company’s share price is now 32% below its 52-week high of $319.90.
FedEx has struggled with supply chain snarls and rising labor costs. With fuel prices nearing 15-year peaks, FedEx is also facing higher costs to keep its fleet of more than 650 aircraft, the world’s largest cargo air fleet, in the skies, as well as more than 100,000 delivery vehicles on roads around the world.
FDX stock really turned south late last fall after the company lowered its earnings outlook for full-year 2022 and reported earnings that missed Wall Street expectations. However, the view among analysts is that the selloff in FedEx stock has been overdone. Among 26 professionals who cover the Memphis, Tennessee-based company, the median price target is $310.00, which would be 43% higher than where the stock is currently trading.
Hopefully, an earnings beat will help the share price to finally break free and move higher. For its report on March 17, analysts forecast that FedEx will report EPS of $4.67 on revenues of $23.44 billion.
GameStop (GME)
At just under $100 a share, the GameStop’s stock is now 71% below its peak of $348.50 reached last June at the height of the meme stock frenzy that the video game retailer came to epitomize. The infamous stock continues to fall as most professional analysts predicted, after the retail trading crowd that pushed it up to unsustainable levels moved on to other investments.
Yet most analysts forecast that GME stock has further to fall. The median price target on the shares is currently $45.00, which is 55% lower than where the shares currently sit. The few analysts who continue to cover the company seem to agree that the company’s brick-and-mortar video game outlets are antiquated.
GameStop continues to try and change its business model, pushing more into online sales and reducing its retail footprint. Will it be enough to revive the company and its stock’s fortunes?
We’ll get an idea when GameStop reports fourth quarter earnings on March 17. There is typically a lot of movement in GME stock ahead of the company’s financial results. However, any gains in recent quarters have quickly evaporated as momentum in the stock remains difficult to maintain. For its Q4 print, Wall Street expects GameStop to report EPS of $0.84 on revenues of $2.22 billion.
Earnings Reports: Hexo Corp. (HEXO)
It’s dark days at Canadian cannabis producer Hexo Corp. The company, based just outside the Canadian capital of Ottawa, has been dealing with several difficult issues. These include a public battle with an activist investor who forced the company to restructure its board of directors; the resignation of CEO Sebastien St-Louis; cutting 180 staff positions; narrowly missing defaulting on a $360 million loan; and struggling to avoid being delisted from the Nasdaq exchange for failing to keep its share price above $1. (HEXO stock has declined 91% over the last year and recently traded around 59cents. And all of this drama occurred in the first two months of the year.
Like many Canadian cannabis producers, Hexo continues to struggle with weak sales and an oversupplied market north of the border. Canadian cannabis producers also continue to be stymied by a lack of movement on federal legalization of cannabis in the much larger U.S. market.
However, Hexo’s problems have been compounded by poor management and internal strife, as well as a cratering share price and proxy fight. While fourth-quarter results on March 17 are unlikely to turn things around for Hexo, the company is hoping to demonstrate that it is recovering. Analysts are calling for Hexo to report an EPS loss of $0.07 on revenue of $55.81 million.
Disclosure: 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.
