GameStop (GME) Stock Remains "Dangerous" Ahead of Earnings
Our preview of the upcoming week's earnings reports include GameStop (GME), Lennar (LEN) and FedEx (FDX).
![A storefront of video game retailer GameStop (GME)](https://cdn.mos.cms.futurecdn.net/MruP4dJySgwdiFYpqCoXnC-415-80.jpg)
We've reached the tail end of earnings season, but there are a few more names likely to draw attention over the next few weeks. One of the headliner's on this week's earnings calendar is original meme stock GameStop (GME, $96.59).
The video game retailer is scheduled to report its fourth-quarter results after the March 17 close.
GME stock fell 10.3% the day after it reported earnings in December, with the company reporting a third-quarter loss that was wider than the year prior. Another negative earnings reaction will only exacerbate its long-term downtrend, with shares off more than 62% in the last 12 months.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Even with this significant decline in GME's share price, it "remains a dangerous stock," says David Trainer, CEO of investment research firm New Constructs. This is because GameStop, like many of its fellow meme stocks, "remain dangerously overvalued and don't generate anywhere near the profits necessary to justify their current valuations."
This opinion seems to be shared by Wall Street analysts, who carry a consensus Sell recommendation on GME, according to S&P Global Market Intelligence.
As for GameStop's Q4 earnings report, analysts, on average, are anticipating earnings of 84 cents per share, down 37.3% year-over-year (YoY), and revenue of $2.2 billion – up 4.4% from the year-ago period.
Lennar Expected to Report Sharp Drop in Earnings
Lennar (LEN, $87.22) stock put in a stellar performance in 2021, posting a total return (price plus dividends) of 53.7% amid a red-hot housing market.
Shares have cooled significantly in 2022, though, with LEN down nearly 25% for the year-to-date amid stiff broad-market headwinds.
Still, analysts are pretty upbeat toward Lennar. Of the 20 analysts following the homebuilder that are tracked by S&P Global Market Intelligence, eight say it's a Strong Buy and six call it a Buy. This compares to five who believe LEN's a Hold and one that has it at Strong Sell.
UBS Global Research analyst John Lovallo is one of those with a Buy rating on Lennar. Improving gross margins for homebuilders, order growth continuing to outpace new home sales, and the company's proposed spinoff of its non-core businesses are among the reasons Lovolla is bullish on the consumer discretionary stock.
For Lennar's fiscal first-quarter earnings report – due out after the March 16 close – analysts' consensus estimates are for a per-share profit of $2.60 (-18.8% YoY) on $6.1 billion revenue, a 15% increase over the year prior.
Analysts See Strong Earnings Growth for FedEx
FedEx (FDX, $214.52) earnings are often seen as a bellwether, with results from the delivery giant giving Wall Street a glimpse into the trends of the broader economy including consumer spending, e-commerce and supply chains.
The company will report its fiscal third-quarter earnings report after Thursday's close. The pros, on average, are looking for $23.4 billion in revenue (+8.8% YoY) and earnings of $4.65 per share, or a 34% improvement over the year-ago figure.
FDX faced both positives and negatives in its fiscal third quarter that will likely lead to "mixed" results, says UBS Research analyst Thomas Wadewitz (Buy).
"On the positive side, we believe FDX likely realized sequential improvement in labor availability in their Ground business and a reduction in the network inefficiency cost relative to the second quarter," the analyst writes in a note. Still, Wadewitz sees the potential for modestly declining margins in FedEx's Ground segment due to rising labor costs.
For his part, the analyst sees year-over-year revenue growth of 11.1% and earnings-per-share growth of 28.2% in FDX's fiscal third quarter.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Try the 6 to 1 Grocery Shopping Method to Save Time and Money
The 6 to 1 Grocery Method can help you save money, reduce waste and eat healthier.
By Erin Bendig Published
-
Ford Stock Plunges on Earnings Miss: What to Know
Ford stock is down big Thursday after the automaker fell short of earnings expectations for its second quarter. Here's what you need to know.
By Joey Solitro Published
-
Stock Market Today: Stocks Tumble on Disappointing Big Tech Earnings
Poorly received quarterly results from Alphabet and Tesla sparked a steep selloff in equities.
By Dan Burrows Last updated
-
Stock Market Today: Mega-Cap Tech Rallies to Drag Markets Higher
Markets focused on upcoming earnings from Magnificent 7 stocks rather than chaos in D.C.
By Dan Burrows Published
-
Stock Market Today: Stocks Tumble After Spectacular Global Internet Crash
Market participants rushed out of risk assets to end a wild week of trading.
By Dan Burrows Published
-
Stock Market Today: Dow Sinks 533 Points as Big Banks, Mega Caps Slump
Goldman Sachs and Apple were two of the worst-performing blue chip stocks on Thursday.
By Karee Venema Published
-
Stock Market Today: Semis Get Slammed and Blue Chips Bounce
The potential for more curbs on tech sales to China set off a rotation into blue chips.
By Dan Burrows Published
-
Stock Market Today: Dow Spikes 742 Points After UnitedHealth Earnings
The S&P 500 and Nasdaq also scored wins Tuesday albeit with much smaller gains than the blue chip Dow.
By Karee Venema Published
-
Stock Market Today: Dow Adds 210 Points as Apple, Goldman Hit New Highs
A big rally in blue chips and some dovish Fed speak boosted the equities market Monday.
By Karee Venema Published
-
Stock Market Today: Markets Bounce Back on Rate-Cut Optimism
The latest readings on consumer sentiment and inflation helped lift the odds of the Fed easing in September.
By Dan Burrows Published