This week’s blizzard of earnings continues Thursday and Friday with four Dow Jones industrial average components reporting results, along with one other industrial giant.
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U.S. Steel

U.S. Steel Corp. (NYSE: X) is expected to report fourth-quarter results after Thursday’s closing bell. The stock gained nearly 48% last year, all of it in the final five weeks. At one point, shares had gained more than 70% before falling back. The lift followed the confirmation that Biden had defeated Trump in the presidential election and rising hopes for a Biden infrastructure program that would have raised the demand for steel.

Commodity steel prices added about 18% last year, and earlier this month U.S. Steel closed its 2017 acquisition of Arkansas-based Big River Steel with a cash payment of $774 million.

For the fourth quarter, analysts are forecasting a loss per share of $0.68 (four cents worse year over year) on revenue of $2.587 billion (down about 8.6%). For the fiscal year, U.S. Steel is expected to post a net loss per share of $5.19, compared with earnings of $0.09 per share in 2019. Full-year revenue is forecast at $9.76 billion (down nearly 25%).

The stock traded Wednesday near $18, well above the consensus price target of $14.09. The steelmaker pays an annual dividend of $0.04 (yield of 0.22%).

Visa

Also scheduled to report Thursday afternoon is Visa Inc. (NYSE: V). The financial services giant earlier this month gave up on its $5.3 billion attempt to acquire fintech firm Plaid, citing an antitrust lawsuit filed by the U.S. Department of Justice that complicated the deal and would have taken “substantial time to fully resolve.”

Visa’s stock fell by nearly 30% last March as lockdowns kept people from spending. Shares worked their way to a gain of 17% for last year, mainly once the Justice Department announced its intention to kill the deal for Plaid.

Analysts have forecast first fiscal quarter earnings per share (EPS) of $1.28, a drop of 12% year over year, and revenue of $5.52 billion, down 8.8%. For the 2021 fiscal year ending in September, analysts have forecast EPS of $5.44 and revenue of $23.3 billion. Those estimates represent an improvement of about 8% in EPS and 6.6% in revenue compared to fiscal year 2020.

At a recent trading price of around $197 per share, the stock trades at about 31 times expected 2021 EPS and 25 times 2022’s estimated earnings. The consensus 12-month price target on the stock is $238.57. Visa pays an annual dividend of $1.28 (yield of 0.63%).

Chevron

Chevron Corp. (NYSE: CVX) is set to report quarterly and full-year results before markets open Friday morning. The oil giant put up the third-worst performance of 2020 among all Dow 30 stocks, losing more than 26% of its market value in 2020. Had rival Exxon Mobil remained among the Dow stocks, it would have outpaced Boeing as the index’s biggest loser of the year. That’s how bad 2020 was for the energy sector.

Crude prices have improved to around $53 a barrel, about where they began 2020. Crude averaged less than $40 a barrel last year and is expected to stop just short of averaging $50 a barrel in 2021. That will help Chevron, but at this point, investors care more about the company’s dividend than its prospects.

Analysts are looking for fourth-quarter EPS of $0.07, down from $1.49 a year ago and revenue of $26.4 billion, down 27.4% year over year. For the full year, Chevron is expected to post a net loss of $0.05 per share and revenue is forecast to fall by 33% to $98.1 billion.
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Chevron stock trades at around $89 a share, about 26.5 times expected 2021 earnings, in a 52-week range of $51.60 to $112.60. The price target on the stock is $103.98. Chevron pays a dividend of $5.16 (yield of 5.77%).

Caterpillar

Caterpillar Inc. (NYSE: CAT), another Dow component, also is on tap to report Friday morning. The company’s stock has added more than 40% in the second half of 2020 to close the year with an annual gain of 27% to its share price. The share price rise is due in large part to hopes for an end to the pandemic and to a stimulus package from the Biden administration that includes a significant amount for infrastructure improvements.

The forecast for Caterpillar’s EPS is $1.49, a decline of 43% year over year. Revenue is expected to drop by more than 14% to $11.3 billion. For the 2020 fiscal year, EPS is expected to tumble by about half to $5.47, while revenue is seen down more than 23%.

At a current price of around $184, shares trade at 29 times expected 2020 earnings and 23 times expected 2021 EPS. The stock’s 52-week range is $87.50 to $200.17, and the 12-month price target is $190.45. Caterpillar pays a dividend of $4.12 (yield of 2.2%).

Honeywell

Honeywell International Inc. (NYSE: HON) was added to the Dow Jones industrial average when Exxon, Raytheon and Pfizer were removed in August. The company recently sold its footwear business for $230 million and, while that’s not enough to offset the pandemic-induced decline in revenue, the better news is that as vaccines stem the spread of the coronavirus, Honeywell’s aerospace business is expected to begin rolling again.

The stock managed to add nearly 23% to its share price last year after tumbling to a drop of 40% in late March.

Fourth-quarter EPS is estimated at $1.96, a decline of about 4.9% compared to the fourth quarter of 2019. Revenue is expected to be down by about 11.6% to $8.4 billion. For the full year, analysts are looking for EPS of $7.03 (down nearly 14%) and sales of $32.2 billion (down 12.4%). At a recent price of around $199 a share, the stock traded at 28.3 times expected 2020 EPS and 25.4 times expected 2021 EPS.

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