Week in Preview: Earnings from Bed Bath & Beyond, Monsanto and More
The new earnings season doesn't kick off until Alcoa (AA) reports its first-quarter results on April 11, and a few stragglers are still reporting their fiscal-fourth-quarter earnings this week. The most prominent earnings reports on the calendar include Wednesday's results from Bed Bath & Beyond (BBBY) and from Monsanto (MON). Here's what analysts surveyed by Thomson Reuters expect to see.
Bed Bath & Beyond (BBBY)
During its fiscal fourth quarter, the nation's largest home retailer opened new stores and its CEO sold shares. Analysts anticipate that the New Jersey-based company will report per-share earnings of 97 cents, an increase of 11.3% from the same quarter of last year. The company also is expected to post revenue of $2.4 billion for the three months that ended in February, which is a 6.3% rise from a year earlier.
Analysts also forecast full-year earnings of $2.92 per share, which would represent a year-over-year increase of 21.2%, on revenue that grows 10.4% to $8.6 billion. In recent quarters, earnings have topped consensus estimates by as much as 15 cents per share.
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Bed Bath & Beyond has a long-term earnings-per-share (EPS) growth forecast of 14.3%, which exceeds those of competitors Target (TGT) and Walmart (WMT). The forward price-to-earnings ratio (P/E) of 15.2 is lower than the industry average, indicating a higher expectation of growth. Its price/earnings-to-growth, or PEG, ratio -- which compares its price-to-earnings ratio to its earnings growth -- is 1, suggesting the stock is fairly valued, and its return on equity (ROE) is 20.3%.
The First Call consensus of analysts has rated BBBY a buy for more than 90 days, and the mean price target for the stock is $55.87. FBR Capital recently upgraded the stock based on its performance. Shares have hardly exceeded $50 since December, but the share price remains above the 200-day moving average.
Monsanto (MON)
Biotech and agrichemical giant Monsanto named a new chief financial officer and announced an acquisition during the three months that ended in February. Analysts expect the St. Louis-based company to report fiscal-third-quarter earnings of $1.85 per share, up from $1.70 per share a year ago, on revenue that rose 6.6% to $4.2 billion.
Looking ahead to the full year, analysts so far expect earnings to grow 15.4% to $2.85 per share and revenue to rise 8.9% to $11.4 billion. Monsanto's per-share results have come within a penny or two of consensus estimates in recent quarters.
Monsanto's long-term EPS growth forecast is 15.5%, which is higher than that of Swiss competitor Syngenta (SYT). Monsanto's forward P/E of 25.5 might seem high, but it's actually lower than the company's trailing P/E, indicating expectations of stronger growth. Its PEG ratio of 1.6, however, suggests overvaluation. The dividend yield is 1.5%.
Monsanto shares have traded mostly between $66 and $76 since December, but remain above the 200-day moving average. This stock is one of George Soros's top five picks.
Pier 1 Imports (PIR)
Quarterly results from Pier 1, which has been the subject of takeover rumors, also are due this week. Analysts anticipate that the home-decor retailer will post fourth-quarter earnings of 47 cents per share, up 31.9% year over year and in line with the company's guidance. They expect revenue of $425.6 million, indicating a 7.5% increase from the same period a year ago, for the three months that ended in February.
The full-year forecast calls for 84 cents per share earnings, compared to a year-ago loss, and revenue growth of 8.1% to $1.4 billion. Pier 1's earnings results have been better than expected for the past three quarters.
Pier 1's 12.2 forward P/E is much lower than the industry average, indicating strong expectations of growth. The ROE is a healthy 28.7%. Short interest has fallen since October, but is still 8% of the float, meaning that 8% of the shares are being sold short.
The company keeps enough cash on hand to cover its long-term debt, and its operational cash flow has grown in the past few quarters. On average, analysts recommend buying Pier 1 Imports, with a mean price target of $11.80 a share. The stock hit a 52-week high of $11.20 per share early in the year, but has since pulled back to $10.27.
Economic Data
Aside from the earnings reports, it appears to be a quiet week elsewhere on the economic calendar as well. Look out for statistics on outstanding consumer credit in February, as well as figures from the Midwest Manufacturing Index for February, on Wednesday. Wholesale trade data for February will be released Friday.
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