PDD, BIDU, HRL, SIG, BBW: Earnings Preview

By Kirsteen Mackay

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This week's earnings updates include Pinduoduo (NASDAQ: PDD), Baidu (NASDAQ: BIDU), Hormel Foods (NYSE: HRL), Signet Jewelers (NYSE: SIG), and Build-A-Bear Workshop (NYSE: BBW).

Investing in Chinese stocks has become more fraught with risk in recent months and former pandemic darlings Pinduoduo and Baidu have seen volatility in their share prices. 

At the end of last week, Bloomberg discussed heightened risks to China's recovery from softer global demand and extended drought. Tokyo core CPI surprised to the upside on higher electricity and gas prices.

Meanwhile, SEC chair Gary Gensler said 200 Chinese companies face trading bans if their financial audits are not verified.

Investors will be keeping a close eye on this week’s earnings for clues to their outlook.

Here are some key earnings reports to look out for in the week ahead:

Pinduoduo Inc - ADR (NASDAQ: PDD)

Pinduoduo Inc (NASDAQ: PDD) operates as an e-commerce platform. The company offers a wide range of merchandise online, including groceries, fashion, beauty, and electronics. Pinduoduo serves customers worldwide.

Pinduoduo's mobile application offers a selection of merchandise for buyer acquisition and engagement. The company was founded by Hua Lin Cai and Zheng Huang on April 20, 2015, and is headquartered in Shanghai, China.

Pinduoduo reports earnings for fiscal Q2 ended June 2022, on August 29. FactSet estimates have an EPS consensus of $0.43 and a sales consensus of $3.49bn.

Over the past year, PDD has traded between $23.21 and $109.79. Today it trades for around $59. Year-to-date, the Pinduoduo Inc - ADR (PDD) stock is up by 6.65%, while the S&P 500 is down by -12.46% over the same period.

PDD stock has a price-to-earnings ratio (P/E) of 36.3. Its price-to-book-value (P/BV) is 7.5, which is well above the industry average of 1.9. PDD stock does not offer shareholders a dividend yield.

A stock with a beta higher than 1.0 is expected to be more volatile than the S&P 500. PDD stock has a beta of 1.19, which is not overly volatile.

FactSet analysts have a consensus Overweight rating on PDD stock with a target share price of $69.07.

Baidu Inc (NASDAQ: BIDU)

Chinese internet search and online marketing company Baidu Inc (NASDAQ: BIDU) reports Q2 earnings on August 30. FactSet estimates have an EPS consensus of $1.54 and a sales consensus of $4.29bn.

Over the past year, Baidu Inc has traded between $101.62 and $182.6. Today BIDU stock trades around $151.18.

Year-to-date, the Baidu Inc stock is up by 1.4%, while the S&P 500 is down by -12.53% over the same period.

FactSet analysts have a consensus Buy rating on BIDU stock with a target share price of $197.

BIDU stock has a forward (P/E) of 18.1. Its price-to-book-value (P/BV) is 1.6, which is well above the industry average of 0.5. 

The company just launched a supercomputing quantum computer in China which allows access via smartphone. This is a significant milestone as western Big Tech Google, Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) are also in the race to produce quantum computing chips and computers.

Success in producing a powerful quantum computer with widespread access could bring riches to those taking the lead. Or it could bring extreme regulation as the potential power in quantum computing is believed to pose a significant threat to national security globally.

Hormel Foods Corp (NYSE: HRL)

Hormel Foods Corp (NYSE: HRL) manufactures and markets consumer-branded meat and food products. The company processes meat and poultry products and produces a variety of prepared foods. Hormel markets its products around the world under a variety of branded names.

Hormel is due to report its Q3 earnings on September 1. FactSet analysts have a consensus estimate EPS of $0.41 along with sales of $3bn.

The Fortune 500 global branded food company recently announced a new operating strategy. Effective October 31, 2022, the beginning of fiscal 2023, the company is transitioning to three operating segments – Retail, Foodservice and International. The One Supply Chain team will continue to oversee the company's global supply chain.

Jim Snee, chairman of the board, president and chief executive officer at Hormel Foods, commented: 

Hormel Foods is a distinctly different company than it was a decade ago, with a food forward, growth-oriented portfolio of leading brands and products that are aligned with our customer and consumer needs,

Our new operating model is a culmination of our recent strategic actions, which included numerous portfolio-building acquisitions, including the Planters® snacking business, the creation of One Supply Chain, the modernization of our technology and ecommerce capabilities, and most recently, our transformational efforts at Jennie-O Turkey Store.

This new alignment will empower our 20,000 global team members, with a more refined organizational structure that is accountable, nimble and focused on creating the Hormel Foods of the future.

Over the past year, Hormel Foods Corp has traded between $40.48 and $55.11. Today it trades at $51.53.

Year-to-date, the Hormel Foods Corp share price is up by 4.8%, while the S&P 500 is down by -12.57% over the same period.

FactSet analysts have a consensus Hold rating on HRL stock with a target share price of $47.22.

HRL stock has a P/E of 29. Its price-to-book-value (P/BV) is 3.8. HRL stock comes with a dividend of 2%.

Signet Jewelers Ltd (NYSE: SIG)

Signet Jewelers Ltd (NYSE: SIG) operates as a retail company. The company, through its subsidiaries, retails jewelry, watches, gifts, and accessories. Signet Jewelers serves customers in the United States, the United Kingdom, Puerto Rico, and Canada.

Signet Jewelers (SIG) will report Q2 earnings on September 1. FactSet estimates have an EPS consensus of $2.59 and a sales consensus of $1.75bn.

Signet recently revised its prior guidance lower as inflation restricts consumer spending. Plus, the company recently acquired online jewelry retailer Blue Nile for $360m in cash to extend its growing portfolio.

Over the past year, Signet Jewelers Ltd. has traded between $48.31 and $111.92. Today it trades for around $70. 

Year-to-date, the SIG stock is down by -24.64%, while the S&P 500 has fallen -12.74% over the same period.

FactSet analysts have an Overweight rating on SIG stock with a target share price of $76.83.

SIG stock has a P/E of 8.9. Its price-to-book-value (P/BV) is 3.8, which is well above the industry average of 0.4. SIG stock comes with a 1.1% dividend.

Build-A-Bear Workshop, Inc (NYSE: BBW)

Build-A-Bear Workshop, Inc (NYSE: BBW) Build-A-Bear Workshop, Inc. is an interactive and entertainment mall-based retailer that invites guests to create their own customized stuffed animals through a bear-making process. The company serves customers worldwide.

BBW reports earnings for its quarter ended July 2022. FactSet estimates have an EPS consensus of $0.45 and a sales consensus of $96.67. 

Over the past year, Build-A-Bear Workshop, Inc has traded between $14 and $23.50. Today BBW stock trades around $17.32.

Year-to-date, the Build-A-Bear Workshop share price is down by -16.61%, while the S&P 500 is down -12.74% over the same period.

Analyst Eric M Beder of Small Cap Consumer Research has a Buy rating on BBW stock with a target share price of $33.

BBW stock has a P/E of 5.8. Its price-to-book-value (P/BV) is 2.9, which is well above the industry average of 0.5. BBW stock does not come with a dividend.

If you enjoyed our earnings preview, you may be interested in learning how the Top Fintech Innovators are Building the Tools of Tomorrow.

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In this article:

Topics:
Quarterly Earnings
Industries:
Consumer Discretionary
Consumer Staples
Information Technology
Companies:
Pinduoduo
Baidu
Hormel Foods
Signet Jewelers
Build-A-Bear Workshop

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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