Earnings Previews: Aurora Cannabis, Expedia, Enbridge

Even though this is the busiest week for companies reporting quarterly earnings in this go-round, most of the results already have been released.

After the closing bell on Thursday, three companies of note are expected to release results. The most closely watched likely will be Walt Disney, one of 30 stocks that comprise the Dow Jones industrial average. We’ve covered that in a separate Disney preview. Before markets open Friday, one energy company is set to release its results.

Aurora Cannabis

Aurora Cannabis Inc. (NYSE: ACB) is one of those scheduled to report results after markets close Thursday. Shares of the Edmonton, Canada-based firm traded up about 11% early Wednesday, following a solid outlook reported on Tuesday by rival Canopy Growth and a deal announced by Tilray to supply medicinal marijuana to the U.K. market.

Marijuana stocks got a jolt with the election of Joe Biden and Democratic control of the U.S. Senate. Democrats are believed to be much likelier to lift the U.S. federal government’s categorization of marijuana as a dangerous drug. Potential access to the U.S. market is viewed as a major victory for marijuana growers.

Analysts expect Aurora to report a net loss per share of C$0.25 (US$0.20), a far cry from a net loss in the same period last year of C$14.16 per share. Revenue is expected to rise by 23% in the quarter. For the 2021 fiscal year ending in June, the company is expected to post a net loss of C$1.31 per share compared with a net loss in the 2020 fiscal year of C$33.94. Revenue is expected to rise to C$398 million, a jump of 33%.

At a current price of around C$21 per share, the stock trades well above its consensus price target of just under C$12 a share. Aurora is not expected to post a profit either this year or next.

Expedia

Also reporting results after the closing bell on Thursday is Expedia Group Inc. (NASDAQ: EXPE). Like every other company in the leisure and entertainment sector, 2020 was a hard year for this travel booker. Yet, the outlook for Expedia and other consumer discretionary stocks is improving.

Earlier this month, Wedbush analyst James Hardiman raised his rating on Expedia from Neutral to Outperform and raised his price target from $130 to $160 per share. The move was based on the level of pent-up demand for travel and short-term rentals like Expedia’s Vrbo, Booking.com and Airbnb. Hardiman noted that Vrbo and Booking.com combined had total bookings of $204 billion in 2019, compared with $38 billion at Airbnb.

Expedia is expected to post a fourth-quarter net loss per share of $1.97, compared to a profit per share of $1.24 in the same period in 2019. Revenue for the quarter is expected to be down by nearly 60% to $1.12 billion. For the fiscal year, Expedia’s net loss per share is tabbed at $7.87, compared to a profit of $6.15 per share in 2019. Revenue is forecast down 55% year over year to $5.4 billion.

With shares trading Wednesday at around $149, the price has overtaken the consensus target of $131.89. The high target of $180 a share implies a potential gain of nearly 21% over the next 12 months. The stock currently trades at a multiple of 177 times expected 2021 earnings and about 23 times expected 2022 earnings per share.

Enbridge

Look for Enbridge Inc. (NYSE: ENB) to report fourth-quarter results before Friday’s opening bell. The Calgary-based oil and gas pipeline operator has made news over the past year or so as it battles Native Americans and environmental groups to continue with an upgrade of its crude oil pipeline (called Line 3) that transports crude from just over the Canadian border to a terminal in Superior, Wisconsin. The project is forecast to cost $2.9 billion for the U.S. portion of nearly 1,100 miles. On Tuesday, a federal court denied an injunction sought by tribal and environmental groups to stop the work. That’s the latest in a string of victories for Enbridge and its work on Line 3.

The consensus estimate for fourth-quarter earnings per share is $0.55, a year-over-year increase of 22%, while revenue is forecast to rise by nearly 16% to $10.1 billion. For the full fiscal year, EPS is forecast at $1.83, up nearly 19% compared to 2019. Revenue for the year is expected to rise by nearly 7% to $37.3 billion.

Shares traded at around $36 on Wednesday, implying a potential gain of 15.7% based on a consensus price target of $41.66 and an upside potential of 36% based on a high price target of $49 per share. The stock trades at around 19 times expected 2020 EPS and 17 times expected 2021 earnings. Enbridge pays a dividend yield of 7.3%.

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