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Earnings Previews: ASML, Coca-Cola, Harley-Davidson, Johnson & Johnson, Verizon
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With the first week of the June-quarter earnings season behind us, we are looking ahead to what the coming week has in store. On Friday, we previewed three companies scheduled to report quarterly results after Monday’s closing bell: IBM, PPG and Steel Dynamics. We also have previewed four firms that are set to report earnings before markets open on Tuesday morning: Halliburton, HCA, Philip Morris and Synchrony Financial.
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Earlier this morning we previewed three companies reporting results after markets close Tuesday afternoon: Chipotle Mexican Grill, Netflix and United Airlines.
Here’s a look at five reports due out before markets open Wednesday.
ASML
Semiconductor manufacturing equipment maker ASML N.V. (NASDAQ: ASML) has added more than 77% to its share price over the past 12 months, including a year-to-date gain of 39%. It is probably safe to say that the company could sell all the photolithography machines it could build right now, as chipmakers like TSMC, Intel and Samsung expand production to keep up with demand. Its monopoly on extreme ultraviolet technology sets the company up for more success as semiconductors adopt 5-nanometer and smaller processes.
Of 32 surveyed analysts following the stock, 23 rate the shares a Buy or Strong Buy, while five rate the stock a Hold and four rate the shares a Sell or Strong Sell. At a recent price of around $675, the implied upside based on a median price target of about $718 is about 6.4%. At the high price target of $799, upside potential reaches 18.4%.
Analysts expect the company to report revenue of $4.85 billion for the June quarter, down about 5.6% sequentially and up by nearly 30% year over year. Earnings per share (EPS) would be down $2.93 is down by 22% sequentially and up nearly 46% year over year. For the full year, analysts are forecasting EPS of $14.81, up about 43% year over year, on revenue of $21.23 billion, up 24.3%.
At the current price, ASML stock trades at around 45.7 times expected 2021 EPS, 38 times estimated 2022 EPS and 34.1 times estimated 2023 earnings. The 52-week trading range is $343.25 to $723.01. The company pays an annual dividend of $3.27 per share (yield of 0.48%).
Coca-Cola
Dow Jones industrial average component Coca-Cola Co. (NYSE: KO) watched its stock price plunge by more than 30% in late March of last year. Since then, the stock has added more than 50% to its share price, but the recovery has slowed and shares are up less than 3% so far in 2021. Coke took a bigger hit during the pandemic than its competitors because its sales to restaurants and other beverage vendors are a bigger part of its revenue stream. When that dried up, the company revenue sank. Wednesday’s report will reveal the strength of that recovery.
Analysts are mostly bullish on the stock, with 16 of 26 rating the stock a Buy or Strong Buy. The other 10 rate the stock a Hold. With a median price target of $60 and a current price near $56, the upside potential is about 7.1%. At the high price target of $67, the upside potential is 19.6%.
June quarter revenue is forecast at $9.3 billion, up 3.1% sequentially and up 30% year over year. Adjusted EPS are forecast to rise by one penny sequentially, to $0.56, and by 14 cents (33%) year over year. For the full year, the current EPS estimate is $2.18, up 12% year over year. Revenue is forecast to rise to $36.9 billion, up 11.8% compared with 2020.
Coca-Cola stock trades at around 25.4 times expected 2021 EPS, 23.5 times estimated 2022 EPS and 21.9 times estimated 2023 earnings. The 52-week range is $45.85 to $56.68. The company pays an annual dividend of $1.68 per share (yield of 2.98%).
24/7 Wall St.Harley-Davidson
Motorcycle and now e-bike maker Harley-Davidson Inc. (NYSE: HOG) had added more than 80% to its share price over the past 12 months, but that has been sliced to around 48% currently. For the year to date, the stock is up about 15.5%. Earlier this month, Harley introduced its Livewire brand of e-bikes, which are priced at $21,999, almost $8,000 less than the 2019 price when the bikes were first introduced in 2019. That is still pretty pricey, though, and investors will be listening for some guidance on expected sales in the second half of the year.
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Analyst sentiment is mixed. Eight of 17 brokerages following the stock rate the shares a Buy or Strong Buy and seven rate the stock a Hold. At a share price of around $42, the stock’s upside potential based on a median price target of $52 is 23.8%. At the high price target of $70, the potential upside on the share price is 67%.
Analysts are expecting the company to post revenue of $1.39 billion, up 13.8% sequentially and about double the total for the year-ago quarter. Adjusted EPS are expected to dip by nearly 30% to $1.18 quarter over quarter, but that would be well above a loss of $0.35 per share in the June quarter last year. For the full year, the current revenue estimate is $4.44 billion, up 36% year over year, and EPS are forecast to rise by 332% to $3.33 compared to $0.77 in 2020.
Harley-Davidson stock trades at around 12.6 times expected 2021 EPS, 11.8 times estimated 2022 EPS and 10.7 times estimated 2023 earnings. The 52-week range is $22.56 to $52.06. The company pays an annual dividend of $0.34 per share (yield of 0.79%).
Johnson & Johnson
Another Dow 30 component, drug maker Johnson & Johnson (NYSE: JNJ) has seen its shares rise by almost 15% over the past 12 months. For the year to date, the stock is up 7.3%. Shipments of the company’s COVID-19 vaccine were halted temporarily following rare instances of a neurological impact and the company has recently had to recall some sunscreen products. Reuters reported Sunday that Johnson & Johnson is considering offloading liabilities from its Baby Powder litigation in a new business that would then seek bankruptcy protection.
Litigation woes notwithstanding, analysts are mostly bullish on the stock. Of 19 ratings, 13 are at Buy or Strong Buy. There is also one Strong Sell rating. At a share price of around $167, the potential upside based on a median price target of $183.7 is 10%. At the high price target of $204, the potential share price gain is just over 22%.
Second-quarter revenue is forecast to rise by 1% sequentially and 23% year over year to $22.56 billion. Adjusted EPS are expected to slip by 11.6% sequentially and rise by 37% year over year. For the full year, it is expected to post an EPS gain of 19% ($9.55) on a 12.1% increase in revenue to $92.58 billion.
Johnson & Johnson stock trades at around 17.5 times expected 2021 EPS, 16 times estimated 2022 EPS and 15.0 times estimated 2023 earnings. The 52-week range is $133.65 to $173.65. The company pays an annual dividend of $4.24 per share (yield of 2.52%).
24/7 Wall St.Verizon
The third Dow component to report results Wednesday morning is Verizon Communications Inc. (NYSE: VZ). The shares are up just over 3% for the past 12 months and have dipped more than 2% since the beginning of the year. Apple’s 5G-capable iPhone 12 release late last year boosted the stock sharply, but it was not enough to push results to meet full-year expectations for either earnings or revenue. First-quarter results also were not enough better than expected.
Of 29 analysts covering the company, 21 rate the stock a Hold. After all, a robust dividend should be rewarded too. With a median price target of $60.50 and a trading price of around $55.60, upside potential on the stock is 8.8%. At the high price target of $66, upside potential reaches nearly 19%.
Second-quarter revenue is forecast to reach $32.71 billion, down less than 1% sequentially and up by 4.1% compared to the year-ago quarter. Adjusted EPS are expected to slip by two cents sequentially and rise by 11 cents year over year to $1.29. For the full year, EPS are forecast to rise about 4.8% to $5.13 and revenue is forecast to rise by 4.3% to $133.75 billion.
Verizon stock trades at around 10.8 times expected 2021 EPS, 10.7 times estimated 2022 EPS and 10.4 times estimated 2023 earnings. The 52-week range is $53.83 to $61.95. The company pays an annual dividend of $2.51 per share (yield of 4.45%).
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