Earnings Previews: Albertsons, CarMax, OrganiGram

There were no notable earnings reports out after markets closed Thursday or before they opened Friday morning, so we have taken a moment to look at a few companies that reported late Wednesday or early Thursday.

European online auto retailer Cazoo beat on revenues and confirmed an outlook for the current year that is about triple the fiscal 2021 total. The stock added about 3.5% in Thursday trading and traded up another 3.4% in Friday’s premarket. Alcoholic beverage giant Constellation Brands beat estimates on both the top and bottom lines and issued guidance that was on the light side. Shares added 4.6% on Thursday and traded up more than 2% in Friday’s premarket.

Conagra reported inline profits and better-than-expected sales but issued downside guidance. Shares added less than 1% Thursday and traded down by about 0.1% early Friday. Levi Strauss also beat top-line and bottom-line estimates, but not by enough to fire up investors. Shares dipped by 0.7% on Thursday and were up about 0.2% in Friday’s premarket.

Here is a look at three companies set to report results before markets open on Tuesday.

Albertsons

Grocery store operator Albertsons Companies Inc. (NYSE: ACI) has added almost 90% to its share price over the past 12 months. Albertsons and rival Kroger earlier this week averted a strike by more than 60,000 southern and central coast California grocery store employees. The company has been on a tear, leading with its omnichannel initiatives and its revenue and profit increases. Investors will want to know if the company expects to be able to keep up the pace without adding to an already high level of debt.

Half of the 20 analysts covering the stock have a Hold rating on the shares, while seven rate the stock as a Buy or Strong Buy. At a recent price of around $34.75, the shares have outrun the median price target of $33.00. Based on a high price target of $42.00, the upside potential is about 21%.

Fiscal 2022 fourth-quarter revenue is forecast at $16.82 billion, which would be up by less than 1% sequentially and about 6.7% higher year over year. Adjusted earnings per share (EPS) are tabbed at $0.64, down 18.7% sequentially but up by 6.7% year over year. For the full fiscal year ending in February, Albertsons is expected to post EPS of $2.94, down 9.4%, on sales of $71.37 billion, up by 2.4%.

Albertsons share price to earnings multiple for fiscal 2022 is 11.8. For 2023, the multiple to estimated EPS of $2.76 is 12.6, and for 2024, it is 12.3 times estimated EPS of $2.83. The stock’s 52-week trading range is $17.73 to $37.99. The company pays an annual dividend of $0.42 (yield of 1.34%). Total shareholder return for the past year is 97%.

CarMax

Shares of used car retailer CarMax Inc. (NYSE: KMX) have dropped about 22% of their value over the past 12 months. The used car dealership sells, services and finances purchases at some 220 locations around the United States. Earlier this week, BofA analysts cut their Buy rating on CarMax to Neutral and lowered the $195 price objective to $165. With prices for new and used vehicles still rising, this downgrade would seem counterintuitive. However, U.S. consumers could delay new vehicle purchases, reducing turnover in the used car market and threatening the company’s sales and earnings growth.

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