Earnings to Watch Next Week: GameStop, Adobe and Darden Restaurants in Focus
Monday (March 22)
|EGFEY||Eurobank Ergasias S.A. ADR||-$0.01|
|TLK||Telekomunikasi Indns Tbk Prshn Pp Pt||$0.29|
|KHOLY||Koc Holdings AS||$0.55|
|HDS||HD Supply Holdings||$0.39|
Tuesday (March 23)
IN THE SPOTLIGHT: GAMESTOP, ADOBE
GAMESTOP: The world’s largest multichannel video game retailer is expected to report its fourth-quarter earnings of $1.35 per share, which represents year-over-year growth of over 6% from $1.27 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 21%.
The Grapevine, Texas-based company would post year-over-year revenue growth of about 1% year-on-year to $2.21 billion.
“Shares of GameStop have outpaced the industry in the past three months. Notably, the company’s shares got a boost recently after it announced the formation of a new strategic committee for accelerating transformation. The committee includes Ryan Cohen, who had been appointed to the company’s board earlier in January. The company had restructured its board to include three activist investors from RC Ventures. The move is expected to aid the company in boosting digital offerings,” noted analysts at ZACKS Research.
“Moving on, the company’s comparable-store sales (comps) numbers for the holiday season were encouraging. Markedly, strong e-commerce sales and sturdy demand for consoles aided holiday comps. Management continues to expect positive comps and profitability for the fourth quarter. However, store closures and supply chain constraints are likely to remain a drag.”
ADOBE: San Jose, California-based software company is expected to report its first-quarter earnings of $2.79 per share, which represents year-over-year growth of about 23% from $2.27 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of 4.7%.
According to the ZACKS Research, Adobe forecasts year-over-year revenue growth of 26% from Digital Media. Digital Experience segment revenues are expected to grow 19% on a year-over-year basis, while Digital Experience subscription revenues are likely to increase 22%.
“Our Digital Media partner survey showed an improvement vs. last qtr w/ 58% meeting/beating targets, up from 50% last qtr. 2Q pipeline commentary was strong; FY outlooks were unchanged; outlook on Doc Cloud very encouraging. At ~29xEV/CY22E FCF, valuations are near trough levels & we think shares are poised for a bounce off of strong results,” noted J. Derrick Wood, equity analyst at Cowen and Company.
“ADBE shares are down 10% YTD and we think valuations are attractive at ~29x EV/CY22E FCF. We continue to see strong upside potential navigating through CY21, aided by an SMB recovery & growing tailwind for Doc Cloud. Reiterate Outperform & $600 price target.”
|INFO||IHS Markit Ltd||$0.70|
|BNGO||BioNano Genomics Inc||-$0.06|
|HOME||At Home Group||$0.69|
Wednesday (March 24)
|ACH||Aluminum Of China||-$0.15|
Thursday (March 25)
IN THE SPOTLIGHT: DARDEN RESTAURANTS
Darden Restaurants, an American multi-brand restaurant operator, is expected to report its third-quarter earnings of $0.69 per share, which represents a year-over-year decline of over 64% from $1.90 per share seen in the same quarter a year ago. However, it is worth noting that in the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 260%.
The company, which owns and operates 1,800 full-service casual and fine dining, is expected to see a year-over-year revenue decline of over 30% to around $1.6 billion.
“Best in class casual dining operator with strong brand portfolio. As the largest CDR operator, DRI has substantial scale advantages in shared services which can be levered in a post-COVID-19 environment by improving margins and gaining market share. Lead brand Olive Garden (50% of sales) garners top consumer scores, its comp sales have historically outpaced the industry and recent cost savings have improved unit economics,” noted John Glass, equity analyst at Morgan Stanley.
“Acquisition of Cheddar’s has been more challenging than initially expected, though still provides longer-term growth potential. Strong position relative to peers, scale, operational leadership, unit growth, and structurally higher margins drive our Overweight rating.”
|SAIC||Science Applications International||$1.45|
|TOELY||Tokyo Electron Ltd PK||$0.80|
|JEF||Jefferies Financial Group Inc||$1.08|
|SBS||Companhia De Saneamento Basico||$0.18|
|SHI||SinOPEC Shanghai Petrochemical||$1.60|
Friday (March 26)
No major earnings scheduled for release.