Wall Street Week Ahead: Best Buy, Medtronic, Autodesk and Dollar General in Focus

• Monday (August 23)
• Tuesday (August 24)
• Wednesday (August 25)
• Thursday (August 26)
• Friday (August 27)

Earnings Calendar For The Week Of August 23

Monday (August 23)

Tuesday (August 24)

IN THE SPOTLIGHT: BEST BUY, MEDTRONIC

BEST BUY: The Richfield, Minnesota consumer electronics retailer is expected to report its second-quarter earnings of $1.89 per share, which represents year-over-year growth of over 10% from $1.71 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 36%. The consumer electronics retailer would post year-over-year revenue growth of over 17% to $11.6 billion. According to ZACKS Research, full-year earnings to be at $8.53 per share and revenue of $49.56 billion, rising +7.84% and +4.86% year-over-year, respectively.

“Best Buy (BBY) is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. BBY’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labour management, supply chain and omnichannel underpin our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We think BBY can sustain >5% EBIT margins after pulling forward its margin target by 5 years during the COVID-19 pandemic. This is reliant on generating SG&A efficiencies, which we believe are possible given BBY’s strong track record in this arena.”

MEDTRONIC: An American-Irish medical device company, is expected to report its fiscal first-quarter earnings of $1.32 per share, which represents year-over-year growth of over 112% from $0.62 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 45%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 20% to $7.8 billion.

“Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

“CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 24

Wednesday (August 25)

IN THE SPOTLIGHT: AUTODESK

Autodesk, a leading provider of drafting and design software for the building, and infrastructure fields is expected to report its second-quarter earnings of $1.12 per share, which represents year-over-year growth of over 14% from $0.98 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%. The San Rafael, California-based company would post year-over-year revenue growth of over 15% to $1.05 billion.

For the fiscal second quarter, the company expects revenues between $1.045 billion and $1.06 million. The company expects non-GAAP earnings of $1.08-$1.14 per share.

“Upside in resellers’ Q2 performance & forward expectations increases confidence ADSK is on track to hit revenue & billings growth guides in FY22, despite a back-end loaded year. Our ests are towards the high-end of guidance & forecast achieving $2.4B FY23 FCF target. Resume coverage at a price target of $334,” noted Keith Weiss, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 25

Thursday (August 26)

IN THE SPOTLIGHT: DOLLAR GENERAL

The U.S. largest discount retailer by the number of stores Dollar General is expected to report a profit of $2.59 in the second quarter, which represents a year-over-year decline of about 17% from $3.12 per share seen in the same quarter a year ago.

The company’s revenue would also decline 1.5% to 8.56 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%.

“Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. Recent high-quality results add more confidence to the 10% L-T EPS growth algorithm, ramping top-line initiatives appear sustainable, and we see underappreciated margin upside from the rollout of Fresh self-distribution,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“DG’s valuation (high teens P/E multiple) presents a solid entry point as it is in line with its history despite much stronger EPS power (and below DG’s pre-COVID multiple) while a ~5x turn discount to the market. This seems unwarranted given DG’s consistent execution & outlook.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 26

Friday (August 27)