Though earnings season is winding down, companies are continuing to post quarterly financial reports. This week, Youku Tudou Inc (ADR) (NYSE:YOKU), Wal-Mart Stores, Inc. (NYSE:WMT), Hewlett-Packard Company (NYSE:HPQ) and Target Corporation (NYSE:TGT) will all be releasing earnings. Here are highlights of what to look for ahead of the reports:
Youku Tudou Inc
The Chinese online streaming company will release second quarter earnings on Wednesday, August 19, after market close. Analysts estimate the company will post a loss of $(0.43) per share, compared to a loss of $(0.02) it posted in the same quarter of last year.
Recent media reports state that the company will be implementing some big changes in the near-future, including changing the company name and making heavy investments in original content. Youku Tudou will invest about $1.6 billion into making “professional-generated content,” similar to how YouTube created original channels on its platform. Furthermore, Youku Toudu reached a milestone in the quarter in its IP-focused pan-entertainment strategy when the company announced that one if its TV shows had generated over 1.8 million downloads for the mobile game associated with the show.
Investors are also keenly watching how the arguably deteriorating Chinese economy will impact the stock. In late July, the Chinese government initiated several measures to stave off a market crash. Despite these efforts, the Chinese market continued to fall. Last week, the value of the yuan dropped nearly 3% in comparison to the U.S. dollar as China announced changes to make the currency more market-driven.
According to the 5 analysts polled by TipRanks in the last 3 months, 2 are bullish on YOKU, 2 are neutral, and 1 is bearish. The average 12-month price target on the stock is $22.85; marking a 20% potential upside from Friday’s close.
Wal-Mart Stores, Inc.
The discount retail store will post second quarter earnings Tuesday, August 18, before market open. Analysts expect the company to post earnings per share of $1.13 (down from an estimate of $1.17 three months ago) on revenue of $119.78 billion, down from the $1.21 EPS and $120.1 billion in revenue posted in the same quarter of last year.
In February, CEO Doug McMillon announced a series of pay increases for Wal-Mart employees as well as new training programs. Investors will be looking to see how Wal-Mart’s wage hikes will impact share prices, which began to take effect last month. In addition, investments in new fulfillment centers in Indiana and Pennsylvania combined with wage increases are expected to have a sizeable impact on earnings.
Investors will also be eyeing Wal-Mart’s consumer spending patterns and international segments. The company expanded its market share in Canada when it acquired 13 Target locations after the rival announced it would be exiting. On the other hand, analysts believe that sales in China, one of the company’s largest international markets, have decreased.
According to TipRanks, 8 analysts have rated Wal-Mart in the last 3 months. Out of the 8 analysts, 2 are bullish on the company and 6 are neutral. The average 12-month price target on the stock is $80.63, marking an 11% potential upside from where shares last closed.
HP will release fiscal third quarter 2015 earnings on Thursday, August 20, after market close. Analysts estimate the company will post earnings per share of $0.85, down from $0.89 posted in the same quarter last year. Analysts expect revenue of $25.55 billion, marking a potential 7.4% decrease compared to the same quarter of last year.
Investors are preparing for the company to split into two. Hewlett-Packard Enterprise will focus on computing segments such as servers, software, and data center gear. The other will be HP Inc., which will sell personal computers and printers. The split will occur in less than three months and the company just announced new board members for each company.
Based on the 15 analysts polled by TipRanks in the last 3 months, 7 are bullish on HPQ and 8 are neutral. The average 12-month price target on the stock is $39.96, marking a 39% potential upside from where shares last closed.
Target will announce second quarter earnings on Wednesday, August 19, before market open. Analysts estimate the company will post earnings per share of $1.11, compared to $0.78 in the same quarter of last year.
In June, CVS announced a deal to buy Target’s pharmacy business for $1.9 billion. Target management said that its pharmacy business was not scaled enough to be profitable. In the terms of the deal, 1,660 drugstores inside Target locations will be re-branded as CVS, adding to CVS’s arsenal of nearly 8,000 existing drugstores. Although the deal is still pending regulatory approval, investors are hoping this move will allow Target to focus on its key-business areas of style and home goods.
Furthermore, investors are hoping that Target has absorbed and gotten over the loss it incurred when it left Canada. In January, the company announced it would be leaving Canada after less than two years in the country. Due to several miscommunication and warehouse problems, management estimated that the Canadian branches would not become profitable until 2021. Consequently, Target left the market and incurred an estimated $5 billion loss.
According to the 5 analysts polled by TipRanks in the last 3 months, 1 analyst is bullish on Target and 4 are neutral. The average 12-month price target is $84, marking a 5.8% potential upside from where shares last closed.