The three major U.S. equity indexes closed lower Friday. The Dow Jones industrials ended the day down 0.45%, the S&P 500 fell by 0.72% and the Nasdaq retreated 0.9%. Nine of 11 sectors ended the day with losses, ranging from 2.1% (energy) to 0.3% (health care). Consumer staples (up 0.2%) and real estate (flat) were the only sectors to avoid losses. Economic data due out this week includes three monthly reports on housing. All three major indexes were trading lower shortly after Monday’s opening bell.
Before markets opened on Monday, AutoZone reported better than expected earnings per share (EPS) and revenues. Same-store sales increased 6.2% year over year. Shares traded up about 1.5% early Monday.
Here is a look at three companies reporting quarterly results late Tuesday or first thing Wednesday morning.
Aurora Cannabis
Shares of Canada-based pot grower Aurora Cannabis Inc. (NASDAQ: ACB) posted their 52-week high in mid-November, and since then the shares have dropped by almost 80%. Late last month, the company paid $35 million for a controlling stake in Bevo Agtech, a major supplier of flowers and vegetable seedlings. The investment is intended to light a fire under Aurora’s cash flow, which has been decimated by the oversupply of marijuana in Canada. The company will report quarterly results after markets close on Tuesday.
Of 13 analysts covering the stock, nine have a Hold rating and two rate the shares at Buy or Strong Buy. At a recent share price of around $1.40, the implied gain based on a median price target of $4.04 is about 189%. Based on the high price target of $7.07, the upside potential for the stock is about 405%.
Analysts expect Aurora to report fiscal fourth-quarter revenue of $38.35 million, which would be down by about 5% sequentially and by 13.3% year over year. The company is expected to report an adjusted loss per share of $0.12, compared to the prior quarter’s loss of $0.18 per share and the year-ago loss per share of $0.19. For the full 2022 fiscal year, Aurora is expected to post a loss per share of $0.66, smaller than last year’s loss of $1.24 per share, on revenue of $167.45 million, down by about 15.4%.
Aurora is not expected to post a profit in 2022, 2023 or 2024. The enterprise value to sales multiple is expected to be 2.4 in 2022. Based on estimated sales of $173.89 million in 2023 and $197.57 million in 2024, the multiples are 2.3 and 2.1, respectively. The stock’s 52-week range is $1.21 to $8.69. The company does not pay a dividend. Total shareholder return for the past year was negative 78.4%.
General Mills
Shares of food products giant General Mills Inc. (NYSE: GIS) have added more than 28% over the past 12 months, including two corrections in March and May that slowed but did not stunt the stock’s rise. When the company reported first-quarter results in June, it also issued full-year guidance that beat expectations and lifted shares back on their growth path. Costs and, now, transportation expenses are going to be concerns for investors. General Mills is set to report results before Wednesday’s opening bell.
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