7 stocks reporting profits the week of May 23, 2022
Tough week for traders. Big wins missed by walmart (NYSE:WMT), Target (NYSE:TGT) and Kohls (NYSE:KSS) left investors reeling and contributed to a sharp sell-off in equity markets, including the biggest one-day decline in two years on May 18.
Wall Street will be looking for better results in the week ahead as we get first-quarter impressions from the latest major retailers to report, as well as some notable tech companies.
Taken together, earnings reports for the next few days should provide more evidence of how the consumer and economy are holding up as inflation continues to hit a 40-year high and the Federal Reserve prepares to raise interest rates at its next meeting on June 14 and 15. Here are seven stocks reporting profits the week of May 23:
- best buy (NYSE:BBY)
- petco (NASDAQ:FRAME)
- Nvidia (NASDAQ:NVDA)
- Dick Sporting Goods (NYSE:SDKs)
- Snowflake (NYSE:SNOW)
- Ali Baba (NYSE:BABA)
- Costco (NASDAQ:COST)
Stock reporting earnings: Best Buy (BBY)
First out is consumer electronics and appliance retailer Best Buy. The Richfield, Minnesota-based company could benefit from some good news. Year-to-date, BBY stock is down 26% to $75.68 per share. The stock price was pulled down along with the wider market. However, the company was recently appointed to investment banking Goldman Sachs (NYSE:GS) safety margin listcomposed of stocks that have attractive valuations and strong balance sheets.
For his winnings next week, analysts expect that Best Buy will report earnings per share (EPS) of $1.64 on revenue of $10.44 billion. Anything better than that, and BBY stock could bounce higher. Currently, the stock is trading near its 52-week low of $72, providing an attractive entry point for investors before or immediately after its results. the median target price on Best Buy stock among 21 analysts who cover the company is currently $120, implying a 57% upside.
Pet retailer and animal welfare company Petco releases its first quarter figures on May 24. Wall Street expects the San Diego, Calif.-based company will report EPS of $0.16 on revenue of $1.46 billion for the January-March period. The company recently announced a retail partnership aimed at attracting dog owners who are also outdoor enthusiasts and particularly enjoy camping.
The partnership is with Backcountry, an online retailer specializing in camping, hiking and outdoor gear. The two companies create a collection of outdoor gear for dogs that participate in outdoor experiences with their owners. Called “Backcountry x Petco,” the collection will be sold at Petco stores as well as the Petco.com and Backcountry.com websites. WOOF stock is down 14% this year at $17.26 per share.
Stock reporting earnings: Nvidia (NVDA)
Semiconductor and microchip giant Nvidia announces its earnings on May 25, and the results will be closely scrutinized on Wall Street. NVDA shares have been hammered this year along with shares of all semiconductor companies as concerns grow over supply chain issues and slowing demand. So far in 2022, NVDA stock has fallen 42% to trade at $175.78 per share. Most analysts say Nvidia stock is a shout buy at current levels. the median target price on stocks is $332.00, suggesting an 89% upside from current levels.
Gaming, artificial intelligence, data centers, self-driving cars and 5G wireless are expected to continue to propel Nvidia’s product sales. The company’s revenue has grown from $4.3 billion in 2013 to $26.9 billion today, making it the world’s largest chipmaker. Analysts seem to agree that Nvidia can keep growing at a steady pace despite current supply chain issues and market volatility. For the first quarter of this year, Wall Street planned that Nvidia will report EPS of $1.29 on revenue of $8.12 billion.
Dick’s Sporting Goods (DKS)
Shares of Dick’s Sporting Goods fell sharply last week, along with the wider retail sector. On May 18, DKS stock fell more than 12% after Walmart and Target sniffed out their first-quarter numbers. The company’s stock price is now down 30% on the year to $80 a share. At its current level, and with a price/earnings ratio (P/E) of just 5, most analysts believe Dick’s stock is undervalued and ripe for the picking. the median target price on the stock price is $137, which would be 70% higher than where the stock is currently trading.
Analysts are looking for Dick’s Sporting Goods will report EPS of $2.46 on revenue of $2.61 billion when it reports quarterly results on May 25. investment bank Morgan Stanley (NYSE:MRS) recently named DKS one of the most “unappreciated post-COVID stocks” and urged investors to add it to their portfolios. As the pandemic settles firmly in our collective rear-view mirrors and summer is fast approaching, Dick’s Sporting Goods should see sales increase.
Stocks Reporting Earnings: Snowflake (SNOW)
Snowflake, another big tech stock that announces its first quarter next week, is the cloud computing data warehousing company. Shares of the Bozeman, Montana-based company were hit harder than most stocks during the market selloff this year. Year-to-date, SNOW stock is down 54% to $151.31 per share, and is now 63% below its 52-week high of $405 per share. Analysts expect the company reports EPS of $0.01 on revenue of $41.76 million for the first quarter of this year.
SNOW stock has also been hit in recent weeks by revelations that another cloud computing giant Selling power (NYSE:RCMP) possesses left his entire position in the business. Salesforce had invested $250 million in Snowflake at the time of the software company’s initial public offering (IPO) in 2020. However, as of the end of the first quarter, Salesforce held no Snowflake shares, according to a regulatory filing, selling all his actions. as the market weakens and falls.
Is the worst over for Chinese tech giant Alibaba? After two years of a punitive government crackdown, analysts and investors are cautiously optimistic that authorities in Beijing may finally be drop listed companies, especially large-cap tech stocks. The Chinese government has pledged to support the country’s tech sector and said it backs plans for new internet companies to go public. Many investors are keeping their fingers crossed that e-commerce giant Alibaba can get its business back on track.
Granted, the BABA stock could use a lift. Shares of the Hangzhou-based company are currently trading at $89, down 61% from a 52-week high of $230.89. Investor confidence in Alibaba shares has also been shaken by the prospect that more Chinese companies could be forced to delist from US stock exchangeseither by Chinese authorities or by the United States Securities and Exchange Commission, which applies more rigor to Chinese companies trading in New York. Analysts expect Alibaba reports first-quarter EPS of $1.09 on revenue of $29.53 billion.
Stocks Reporting Earnings: Costco (COST)
Finally, we’ll hear from big-box grocery retailer Costco next week. The major retailer’s earnings are all but certain to influence markets when the Seattle-based company releases its report on May 26. alone to trade at $424 per share. The title is now down 25% over the year. Analysts expect that Costco will report EPS of $3.04 on revenue of $51.38 billion.
The big question for Costco as earnings approach is whether it has been able to pass on the higher costs to its customers? While some retailers, like Home deposit (NYSE:HD) have succeeded, others, such as Walmart, have not.
Costco has been looking for ways to raise prices at its more than 800 locations around the world, including to increase the price of its famous cheap hot dogs. However, the company decided against the move after encountering backlash from customers, who appreciate being able to purchase a hot dog and soda at Costco outlets for $1.50 since the launch of the combo in 1985.
Disclosure: As of the date of publication, Joel Baglole held long positions in MS and NVDA. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.