Earnings Previews: Campbell Soup, CrowdStrike

The week before the Labor Day holiday weekend is really just three days long. Even with the short week, however, there are only a few reports due this week.

Of the two companies we previewed that reported earnings before markets opened on Monday, Li Auto beat on revenues and missed on profits while Cloudera beat on both.

On Friday, we previewed four companies scheduled to report quarterly results after markets close Monday or before they open Tuesday: Chico’s FAS, NetEase, StoneCo and Zoom Video.

Here’s a look at two companies reporting results late Tuesday or before markets open on Wednesday.

Campbell Soup

Over the past 12 months, shares of Campbell Soup Co. (NYSE: CPB) are down about 18.5%, while the consumer staples sector has gained just over 12%. The S&P 500 is up by nearly 31% in the same period. Some of the blame will go to rising food prices, some will go to rising logistics costs, and some will go to the rising price of steel. About 90% of the company’s 303 million outstanding shares are owned by insiders or institutions, and neither is likely to dump the stock, along with its solid dividend yield. Campbell Soup reports results before markets open Wednesday.

Analysts overwhelmingly rate the stock a Hold by a margin of 11 to seven. Of the seven, three recommend a Buy or Strong Buy and the others rate the stock a Strong Sell. At the recent price of around $41.15, the upside potential to a median price target of $48 is nearly 17%. Upside potential based on the high price target of $59 is about 43.4%.

For the company’s fourth quarter of fiscal 2021, analysts are expecting revenue of $1.81 billion, down nearly 9% sequentially and down 14% year over year. Adjusted earnings per share (EPS) are tabbed at $0.47, down 18% sequentially and more than 25% year over year. For the full fiscal year, analysts are expecting EPS of $2.91, down 1.5%, and sales of $8.41 billion, down 3.2%.

Campbell Soup stock trades at 14.1 times expected 2021 EPS, 14.4 times estimated 2022 earnings and 14 times estimated 2023 earnings. The stock’s 52-week trading range is $40.05 to $53.77. The company pays an annual dividend of $1.48 per share (yield of 3.57%).

CrowdStrike

Security software developer CrowdStrike Holdings Inc. (NASDAQ: CRWD) has seen its shares appreciate by more than 140% over the past 12 months, including a boost of 35% for the year to date. Earlier this month, CrowdStrike was added to its Nasdaq-100, Nasdaq-100 Equal Weighted and Nasdaq-100 Technology indexes, replacing Maxim, which just completed its acquisition by Analog Devices, in all three. In February, Cathie Wood’s ARK Next Generation Fund owned almost 372,000 shares of CrowdStrike stock. By May 14, all had been sold and no ARK Invest fund currently holds the company’s shares.

Analysts are strongly bullish on the stock, with 24 of 26 rating the shares a Buy or Strong Buy. At a trading price of around $286.50, the shares have outrun their median price target of $280. At the high price target of $330, the potential gain to the current price is 15.2%.

Expected revenue for CrowdStrike’s second quarter of fiscal 2022 is $323.53 million, up 6.8% sequentially and nearly 63% year over year. Adjusted EPS are expected to be $0.09, down a penny sequentially and up from $0.03 a year ago. For the 2022 fiscal year, current estimates call for EPS of $0.39, up nearly 45%, on sales of $1.36 billion, a jump of 56%.

CrowdStrike stock trades at 734.6 times expected 2022 EPS, 297.3 times estimated 2023 earnings and 173.1 times estimated 2024 earnings. The stock’s 52-week range is $115.25 to $288.45. The high was posted Monday morning. CrowdStrike does not pay a dividend. The company reports results after markets close Tuesday.

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