The spread of the coronavirus pandemic has presented significant challenges to almost all companies. However, certain companies have managed to not only maintain their operations at pre-pandemic levels, but to improve them. If upcoming earnings reports from these companies are good, the companies may be primed for further price gains.
The earnings results of many companies in the last two quarters have reflected their ability to strengthen financials despite the pandemic disruptions, and investors have rightly rewarded those stocks.
Jabil, Inc. (JBL), Sanderson Farms, Inc. (SAFM), and Rite Aid Corporation (RAD) are three companies that have shown improvements in their earnings reports for the last two quarters and are expected to do well in the soon-to-be-reported quarter. So, it could be a good idea to invest in these stocks if their reported numbers are impressive.
Jabil, Inc. (JBL)
JBL provides electronic design and product management services to multinational electronics and technology companies. JBL The company has more than 100 plants in more than over 30 countries. The company’s JBL’s stock has gained 118% since hitting its low in mid-March.
JBL has recently concluded live-network trials in unamplified metro regional scenarios for the application of 100G. Badger Technologies, a product division of JBL, has recently partnered with STCR to speed up the rollout of autonomous robots for use by independent and regional grocers around the globe.
The company JBL is scheduled to have its fiscal first quarter earnings call on December 17, 2020. Analysts expect its EPS for the quarter to increase 21% year-over-year. For the quarter ended August 31, 2020, the company’s Diversified Manufacturing Services (DMS) segment saw an 8% year-over-year increase in revenue of 8% year-over-year. The company’s Electronics Manufacturing Services (EMS) segment also saw an 8% increase in revenue of 8% during the same period.
JBL is expected to see a revenue growth of 1.8% for the quarter ended February 28, 2021 and 3.6% in 2022. The company’s EPS is estimated to grow 40.7% in 2021 and at a rate of 13.5% per annum over the next five years.
How does JBL stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Peer Grade
B for Overall POWR Rating
The stock is also ranked #14 out of 55 stocks in the Technology – Services industry.
Sanderson Farms, Inc. (SAFM)
SAFM produces, processes, and markets chicken products. These products include frozen, fresh, and prepared chicken varieties. SAFM’s stock has risen 14.9% since hitting its low in mid-March.
The company has been facing reduced demand for its products from restaurants and other food service customers. This reduction in demand decline has been in large measure due to the lock-down of restaurants or reductions in their operational capacity resulting from their compliance with government restrictions. This demand is expected to return to normal in the coming quarters as restaurants and other food service operators return to full capacity.
SAFM is expected to have its fourth quarter earnings call on December 17, 2020. EPS for the quarter is expected to increase 97.8% year-over-year. For the quarter ended July 2020, the company saw an increase in net sales of 1.2% versus from the same period last year. The company’s feed costs decreased 5.6% during the same period.
SAFM’s revenue is estimated to increase 2.5% in 2020 and 7.8% in 2021. Its EPS is expected to rise 488.2% in 2021 and 47.6% per year over the next five years.
SAFM’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” for Trade Grade and Industry Rank. It is ranked #24 out of 58 stocks in the Food Makers industry.
Rite Aid Corporation (RAD)
RAD operates a chain of pharmaceutical stores across the United States. The company sells a wide range of merchandise including medicine, personal care items, cosmetics, household items, and more. RAD’s stock price has increased 19.3% year-to-date.
The company has recently announced an agreement to acquire Bartell Drugs, which operates 67 pharmaceutical retail stores. The company is currently operating more than 300 COVID-19 testing sites across the United States.
RAD is expected to host its third- quarter earnings call on December 17, 2020. Analysts expect the company’s revenue for the quarter to increase 6.9% year-over-year. For the quarter ended August 2020, RAD’s the company’s net loss from operations fell reduced 79.8% compared to the same period last year. The company’s revenues from continuing operations increased 11.3% during the same period.
RAD’s revenue is expected to grow 3% for the quarter ended February 2021 and 8.4% in 2021. The company’s EPS growth is expected to be 32.4 % for the quarter ended February 2021, and 211.1% in 2021.
It is no surprise that RAD has a “Buy” in our POWR Ratings systems with a grade of “A” in Trade Grade and a “B” in Industry Rank. In the 4-stock Medical – Drug Stores industry, RAD is ranked #2.
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JBL shares were trading at $40.51 per share on Tuesday morning, up $0.20 (+0.50%). Year-to-date, JBL has declined -1.05%, versus a 15.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More…
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