Tencent Music
Tencent Music Entertainment Group Inc. (NYSE: TME) is China’s largest online music entertainment platform and a subsidiary of Tencent Holdings, also the owner of WeChat. Over the past year, the share price has dropped by nearly 52%. Tencent Music’s QQ Music platform sold nearly 200,000 copies of Taylor Swift’s “Midnights” album for about $4.82 each on the day of its release (October 21), the highest price ever from a digital album in China. The company added 2.5 million users in the previous quarter, nearly triple the total of competitor NetEase’s Cloud Music streamer.
Enthusiasm for the company’s stock is no better than mediocre. Only nine of 22 analysts have a Buy or Strong Buy rating, while 10 others rate the shares at Hold. At a price of around $3.90 a share, the potential upside based on a median price target of $5.10 is about 30.8%. At the high target of $7.90, the implied upside is around 102.6%.
Analysts expect the company to post third-quarter revenue of 990.21 million, down 3.9% sequentially, and by 22.2% year over year. Adjusted EPS are pegged at $0.10, up a penny sequentially and by the same amount year over year. For the full 2022 fiscal year, EPS are forecast at $0.35, down 9.8%, on revenue of $3.9 billion, down 20.6%.
The stock trades at 11.0 times expected 2022 EPS, 10.5 times estimated 2023 earnings of $0.37 and 9.8 times estimated 2024 earnings of $0.40 per share. Tencent Music’s 52-week range is $2.95 to $8.86. The company does not pay a dividend. Total shareholder return over the past 12 months was negative 51.6%.
Walmart
The other Dow component reporting early Tuesday is Walmart Inc. (NYSE: WMT). Over the past 12 months, the company has seen its share price decrease by 4.1%. When the company reported second-quarter results in August, it said that its inventory overhang had peaked. The company’s forward price-earnings ratio is right at the sector average, suggesting that the stock is fairly valued. If Walmart has been able to lure more traffic to its stores, gross margins may improve enough to boost investors’ spirits as a dicey holiday season comes into view.
Analysts remain bullish on the stock, however, with 28 of 40 awarding the shares a Buy or Strong Buy rating and the rest having Hold ratings. At a share price of around $142.40, the upside potential at the median price target of $154.00 is about 7.1%. At the high target of $170.00, the implied upside is 19.4%.
For its third quarter of fiscal 2023, Walmart is expected to report sales of $146.47 billion, down by 3.2% sequentially and up 5.2% year over year. Adjusted EPS are pegged at $1.31, down 25.8% sequentially and by nearly 10% year over year. For the full fiscal year ending in January, analysts forecast EPS of $5.85, down 9.4%, on sales of $596.05 billion, up 5%.
Walmart stock trades at 24.3 times expected 2023 EPS, 21.6 times estimated 2024 earnings of $6.59 and 19.8 times estimated 2025 earnings of $7.18 per share. The stock’s 52-week range is $117.27 to $160.77. Walmart pays an annual dividend of $2.24 (yield of 1.61%). Total shareholder return for the past year was negative 2.56%.
Originally published at 24/7 Wall St.
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