Earnings reports arrive in bunches this week. Both the companies we profiled for Monday morning, Coca-Cola and Prologis, beat estimates on both the top and bottom lines.
Our coverage of stocks reporting Monday afternoon overlooked a big one, so we’re going to stitch that onto our coverage of stocks that report earnings Tuesday afternoon and Wednesday morning.
Our look at companies reporting earnings Monday afternoon and Tuesday morning was split into two reports. One covered Abbott Labs, Harley-Davidson, Steel Dynamics and United Airlines. The other previewed Johnson & Johnson, Lockheed Martin, Philip Morris and Procter & Gamble.
IBM
International Business Machines Corp. (NYSE: IBM) is probably being more closely watched for the coming spin-off of its managed information services business, recently dubbed Kyndryl. The company does not provide guidance but has said it expects 2021 revenues to be better than 2020’s and that adjusted cash flow for the fiscal year should be $11 to $12 billion. Over the past 12 months, IBM shares have added more than 17%.
Only seven of 25 analysts have Buy or Strong Buy ratings on the stock, while 15 rate the stock as a Hold. The consensus price target of $139.18 implies a potential gain of around 4.3% at a recent price of $133.50. At the high target of $165, the implied upside is 23.6%.
IBM is forecast to report first-quarter earnings per share (EPS) of $1.63 on revenue of $17.34 billion after markets close Monday. For the full year, analysts estimate EPS of $10.99, up by nearly 27% year over year. Revenue is forecast at $74.04 billion, up less than 1%.
The stock currently trades at around 12.2 times expected 2021 EPS, 11.1 times estimated 2022 earnings and 10.6 times estimated 2023 EPS. The stock’s 52-week trading range is $105.92 to $137.07. IBM pays an annual dividend of $6.52 (yield of 4.88%).
Netflix
After markets close on Tuesday, Netflix Inc. (NASDAQ: NFLX) is expected to report March-quarter results. As always, analysts are focused on subscriber numbers, given the number of competitors. Netflix projected net subscriber additions of 6 million for the quarter. The company’s outlook will also be sifted for the expected impact from theater reopenings. Shares have added nearly 30% in the past 12 months.
Of 41 analysts’ ratings, 25 are Buy or Strong Buy, with 14 Hold ratings and one each at Underperform and Sell. The consensus price target on the stock is $622.74, implying upside potential of about 13.6% at a recent trading price of $548.25. At the high target of $840, the upside potential is more than 53%.
In addition to a boost in subscribers, analysts expect EPS of $2.96, up 88% year over year for the quarter, on sales of $7.13 billion, up 23.6%. Estimates for the full year are EPS $9.89, nearly 63% higher year over year, on revenue of $30.03 billion, more than 20% higher.
Netflix stock trades at around 55.0 times expected 2021 EPS, 41.8 times estimated 2022 earnings and 31.1 times expected 2023 earnings. The stock’s 52-week range is $393.60 to $593.29. The company does not pay a dividend.
ASML
Semiconductor equipment maker ASML Holding N.V. (NASDAQ: ASML) reports first-quarter results before U.S. markets open Wednesday morning. Last year was a boomer for semiconductor equipment makers like ASML, Lam Research and KLA, all of which doubled their share prices. Netherlands-based ASML saw its share price rise by 113%. With semiconductor manufacturers like Taiwan Semiconductor and Intel planning for major growth, these equipment makers are looking good for future gains.
ASML doesn’t get a lot of analyst coverage, with five of seven firms rating the stock Buy or Strong Buy and the other two with Hold ratings. The consensus price target on the stock is $720.25, and at a recent price of $627.90, upside potential is 14.7%. At the high target of $806, the upside potential is about 28.4%.
EPS for the quarter is estimated at $2.60, down nearly 20% year over year, and revenue is forecast to dip 6.4% to $4.83 billion. The outlook for the fiscal year brightens, however, to EPS of $10.50, up nearly 24% year over with revenue more than 18% higher to $16.94 billion.
Shares trade at around 42.3 times expected 2021 EPS, 34.9 times estimated 2022 earnings and 29.8 times estimated 2023 earnings. The 52-week trading range is $275.96 to $653.00, and ASML pays a dividend of $3.28 (yield of 0.51%).
NextEra Energy
NextEra Energy Inc. (NYSE: NEE) also reports quarterly results before markets open Wednesday. Monday morning the regulated utility company’s publicly traded limited partnership, NextEra Energy Partners, announced that it had purchased 391 megawatts of wind generation capacity in California from Brookfield Renewable for a base price of $733 million. NextEra Energy’s share price rose by nearly 33% last year. For a brief spell in October, NextEra was the largest energy company in the United States, bigger even than Exxon Mobil or Chevron.
Of the 15 analyst ratings on the stock, 13 are Buy or Strong Buy. The stock’s consensus price target is $87.33, and shares traded recently at $79.80, implying upside potential of about 9.5%. At the high target of $101, the potential upside is more than 26%.
Analysts expect the stock to post EPS of $0.58, a penny below its EPS in the same quarter last year. Revenue is projected to reach $4.86 billion, up 5.4% year over year. For the full year, EPS is forecast at $2.51, about 8.7% higher, and revenue is expected to rise to $20.6 billion, up 14.5%.
NextEra Energy’s stock trades at a multiple of 30.2 times expected 2021 EPS, 27.4 times estimated 2022 earnings and 25.2 times estimated 2023 earnings. The stock’s 52-week range is $55.65 to $87.69, and the company pays an annual dividend of $1.54 (yield of 1.90%).
Verizon
Like IBM, Verizon Communications Inc. (NYSE: VZ), is a Dow Jones industrial average component, and it will report March-quarter results before the opening bell Wednesday. The telecom giant last week announced that it is expanding its fixed-wireless 5G business network to 21 more cities, bringing to 24 the cities where the high-speed network will be available. Share prices increased by about 4.2% last year.
Two-thirds of the 32 analysts with ratings on the stock have it pegged as a Hold, with the other eight rating the stock either a Buy or a Strong Buy. The consensus price target on the shares is $59.83, about $1.50 higher than a recent trading price of $58.28. The high target is $65, implying upside potential of about 11.5%.
For Verizon’s first quarter, analysts are expecting EPS of $1.29, three cents higher than the same quarter last year, with revenue of $32.47 billion, up 2.7% year over year. For the full year, estimates call for EPS of $5.08, up about 3.7%, on sales of 133.09 billion, which also would be a 3.7% gain.
Shares currently trade 11.5 times expected 2021 EPS, 11.3 times estimated 2022 earnings and 11.1 times expected 2023 earnings. The stock’s 52-week range is $52.85 to $61.95. Verizon pays an annual dividend of $2.51 (yield of 4.31%).
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