Monday Morning Markets – The Week Ahead

The TSX Index continued its strong September showing as the S&P/TSX Composite Index jumped 0.5% last week. As we enter the last week of the quarter, there are no macro events but a couple of earnings announcements that may be of interest to investors.

Monday, September 23

The lone earnings result of importance on Monday is DHX Media (TSX:DHX). DHX is a content and media broadcaster. It holds rights to the Family Channel and Family CHRGD television channels and its portfolio of brands include Peanuts, Strawberry Shortcake, Teletubbies and Caillou among others.

Analysts expect the company to post a loss of $0.06 per share on revenue of $104.16 million. In comparison, the company posted a net loss of $0.16 per share and revenue of $97.36 million in the fourth quarter of 2018.

Since the start of the year, the company has been mired in a slow and steady downtrend. Its share price has lost 30% as it struggles for relevancy in an industry dominated by large cap players.

Analysts are neutral on the company with an average one-year price target of $2.00 per share. This implies 23.3% upside from today’s price.

Tuesday, September 22

The most anticipated quarterly results of the week come from Blackberry (TSX:BB) which is scheduled to report second quarter 2020 results before the open on Tuesday.

Blackberry can’t seem to maintain positive momentum for any considerable amount of time. Over the past year, the company’s stock price has lost 25% of its value and it is now trading at a 35% discount to its 52-week high of $15.50 per share.

Analysts are mixed on the stock. Blackberry is expected to post a loss of 5 cents per share on revenue of $265 million. Although the company was profitable last year, revenue estimates represent a 25% jump over the second quarter of fiscal 2019.

The good news for investors is that the company has beat on both the top and bottom lines in eight consecutive quarters. The last time the company missed on revenue was in the first quarter of 2018 and it hasn’t missed on earnings since the second quarter of fiscal 2016.

Why is this important? Blackberry’s share price has habit of making significant jumps to the upside after it beats analysts estimates. On the flip side, it tends to crash whenever revenue or earnings come in lighter than expected.

Once again, analysts are neutral on the company and have a one-year price target of $11.38 per share. This implies 13.8% upside from Friday’s close of $10.01 per share.