In mid-morning trading on Monday, the Dow Jones industrials were down 0.45%, the S&P 500 down 0.05% and the Nasdaq 0.43% higher.
Before U.S. markets opened on Monday, Zim Integrated Shipping reported a miss on both the top and bottom lines. Shipping volume declined by 10.5% year over year, and the average rate for a 20-foot-equivalent unit (TEU) fell by 62.6%. The company’s net loss was $58 million. As a result, Zim is not paying a dividend for the quarter, and that is what really hurts. Shares traded down about 13.6% Monday morning.
After U.S. markets close Monday or before they open Tuesday morning, Zoom Video and Lowe’s are set to report quarterly results. Palo Alto Networks and VFC are on deck to release their quarterly reports later on Tuesday.
Here is a look at what to expect when the following two companies report quarterly results first thing Wednesday morning.
Kohl’s
Department store operator Kohl’s Corp. (NYSE: KSS) has posted a 12-month share price decrease of about 58%. If there has been a bright spot for investors since early June 2022, it did not last long.
New CEO Tom Kingsbury said after the company reported January-quarter results that it would take time for the company to turn the business around. High inventory levels led to discounted prices resulting in weak margins. How Kingsbury expects to turn that around in the current macroeconomic environment is by lowering its promotional pricing and seeking better pricing strategies. If the company can keep paying its generous dividend (not a slam dunk by any stretch), investors may be willing to wait for a turnaround.
Of 17 analysts covering the stock, just five have a Buy or Strong Buy rating, and eight have Hold ratings. At a recent share price of around $19.00, the upside potential based on a median price target of $25.00 is 31.6%. At the high price target of $50.00, the upside potential is about 63.2%.
For the retailer’s first quarter of fiscal 2024, analysts are looking for revenue of $3.37 billion, which would be down 41.7% sequentially and by 2.9% year over year. Analysts are forecasting a loss per share of $0.44, better than the prior quarter’s loss of $2.49 and down from earnings per share (EPS) of $0.11 in the year-ago quarter. For the full fiscal year ending next January, analysts have forecast EPS of $2.32, compared to fiscal 2023’s loss of $0.15 per share, on sales of $16.82 billion, down 2%.
Kohl’s stock trades at 8.3 times expected 2024 EPS, 6.6 times estimated 2025 earnings of $2.93 and 5.5 times estimated 2026 earnings of $3.48 per share. Its 52-week range is $18.61 to $47.63, and the low was set last Friday. Kohl’s pays an annual dividend of $2.00 (yield of 9%). Total shareholder return over the past year was negative 54.18%.
Xpeng
China-based electric vehicle maker Xpeng Inc. (NYSE: XPEV) has seen its share price drop by about 60% over the past 12 months. The shares reached their 52-week in late June of last year and sank to their 12-month low just five months later after Chinese officials loosened their strict lockdown policy. That sent shares soaring, but the euphoria did not last. By mid-December, most of the gain had evaporated, and the stock currently trades near the level.
April sales were in line with March sales but down by almost 2,000 units to 7,079. Xpeng has introduced a couple of new models, but they have not taken off yet. This company is expected to do better, but it is not getting any easier.
Of 26 analysts covering the stock, 15 have a Buy or Strong Buy rating and eight have Hold ratings. At a share price of around $9.50, the upside potential based on a median price target of $11.63 is about 20.2%. At the high price target of $37.43, the upside potential is about 295%.
First-quarter revenue is forecast at $709.52 million, down 4.8% sequentially and by nearly 40% year over year. The company’s adjusted loss per share is forecast at $0.33, compared to a per-share loss of $0.37 in the prior quarter. A year ago, Xpeng reported a loss per share of $0.28 in the March quarter. For the full 2023 fiscal year, the company is expected to post a loss per share of $0.96, compared with 2022’s loss of $1.43 per share on sales of $5.17 billion, up 32.7%.
Xpeng is not expected to report a profit in 2022, 2023 or 2024. The enterprise value to sales multiple for 2023 is 1.1, falling to 0.7 and 0.5 in 2024 and 2025, respectively. The stock’s 52-week range is $6.18 to $35.35. Xpeng does not pay a dividend, and total shareholder return for the past year is negative 59.72%.
Originally published at 24/7 Wall St.
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