This week will bring June-quarter results from several energy companies, along with some big health care firms, media companies and utilities. We already have previewed three stocks that will report results after markets close Monday: NXP Semiconductors, Take-Two Interactive and Transocean.
Alibaba, Nikola and Under Armour will post quarterly earnings before Tuesday’s opening bell. Earlier this morning, we previewed earnings due after Tuesday’s closing bell: Activision-Blizzard, Lyft, Occidental Petroleum and Skillz.
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Here are previews of four companies set to report June-quarter results before markets open on Wednesday.
CVS Health
The country’s second-largest provider of health care plans, CVS Health Corp. (NYSE: CVS), has seen its stock price rise by more than 34% in the past 12 months. For the year to date, shares are up about 23%. The 12-month gain is about 5% below that of UnitedHealth but about 4% more year to date. Since July 1, the stock trades roughly flat, having recovered from a mid-month plunge related to the recall of a sunscreen product.
Analysts remain bullish on the stock, with 19 of 26 surveyed brokerages giving the stock a Buy or Strong Buy rating. The rest rate the shares at Hold. At a recent price of around $82.40, the stock’s upside potential based on a median price target of $95.50 is about 16%. At the high price target of $107, the implied upside is almost 30%.
The consensus revenue estimate is $70.27 billion, up 1.7% sequentially and about 7.8% year over year. Adjusted earnings per share (EPS) are forecast at $2.07, which would be three cents higher sequentially and down nearly 22% year over year. For the full year, analysts are looking for EPS of $7.67, up 2.2%, and revenue of $281.75, or about 4.9% more year over year.
The stock trades at 10.8 times expected 2021 EPS, 10.0 times estimated 2022 earnings and 9.1 times estimated 2023 earnings. The stock’s 52-week range is $55.36 to $90.61. CVS Health pays an annual dividend of $2.00 (yield of 2.43%).
General Motors
Automaker General Motors Co.’s (NYSE: GM) stock has risen by nearly 130% over the past 12 months. Growth since the beginning of 2021 is a more modest 37.2%, however. Supply chain issues are affecting all automakers, and GM has offered little to counter Ford’s or other legacy automakers’ thrusts into the electric vehicle market. The company’s Chevy Bolt faced a major recall, and the all-electric Hummer isn’t due out until fall. GM’s guidance could make a difference in how the share price behaves.
Analysts are strongly bullish on the stock, however. Of 21 brokerages covering the company, 19 rate the stock a Buy or Strong Buy, with just two assigning a rating of Hold. At the trading price of around $57, the stock upside potential based on a median price target of almost $74 is 30%. At the high price target of $90, upside potential reaches 58%.
Second-quarter revenue is forecast at $29.66 billion, a decline of around 8.7% sequentially but an increase of 136% year over year. EPS are expected to drop by nearly 18% sequentially to $1.85. In the second quarter of last year, GM posted a loss per share of $0.50. For the full year, EPS is tabbed at $6.90, a gain of nearly 41%, while revenue is expected to rise by more than 11% to $136.48 billion.
GM stock trades at 8.6 times expected 2021 EPS and 8.4 times estimated 2022 and 2023 earnings. The stock’s 52-week range is $24.82 to $64.30. GM has suspended its dividend.
24/7 Wall St.Marathon Petroleum
The country’s largest oil refiner, Marathon Petroleum Corp. (NYSE: MPC), has seen its share price rise by nearly 50% over the past 12 months. For the year to date, the stock has added about 34%. Rising oil prices are generally a drag on refining margins and earnings, and that trend has not escaped the notice of analysts who see Marathon’s revenues flattening or even declining for the rest of the year.
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Even so, of 16 brokerages covering Marathon, 12 rate the shares a Buy or Strong Buy, and the rest recommend holding the stock. At a trading price of around $54.40, the stock’s upside potential based on a median price target of $70 is about 29%. At the high target of $83, upside potential is nearly 53%.
Quarterly revenue is forecast at $21.24 billion, down more than 7% sequentially, but up by about 46% year over year. In the same quarter last year, Marathon posted an adjusted loss per share of $1.33. For the second quarter of 2021, analysts are looking for EPS of $0.38. For the full year, the consensus estimates call for EPS of $0.88, compared to a 2020 loss per share of $3.44. Revenue is forecast to rise by 26.5% to $87.32 billion.
Marathon’s stock trades at 60.8 times expected 2021 EPS, 16.6 times estimated 2022 earnings and 12.7 times estimated 2023 earnings. The stock’s 52-week range is $26.56 to $64.84. Marathon pays an annual dividend of $2.32 (yield of 4.2%).
Royal Caribbean
The cruise line industry was hit especially hard by the COVID-19 pandemic. Since January of 2020, Royal Caribbean Group (NYSE: RCL) has seen its share price tumble by 42%. That decline includes a share price increase of around 57% over the past 12 months but a gain of just 2.6% for the year to date. That yearly gain comes after spikes of around 30% in the share price as hopes rose that vaccinations would bring vacationers back.
Last week, six passengers on one of the company’s ships tested positive for coronavirus, which didn’t help, but Royal Caribbean and other cruise lines already had been struggling with the fallout from the Delta variant of the virus.
Analysts have remained moderately bullish on Royal Caribbean stock, with eight of 18 brokerages putting a rating of Buy or Strong Buy on the stock. Another four rate the shares Sell or Strong Sell. At a trading price of around $76.60, the stock’s implied upside to a median price target of $93.50 is 22%. At the high price target of $135, upside potential jumps to 76%.
Second-quarter revenue is forecast at$14.36 million, up about 234% sequentially, but down about 20% year over year. The company is expected to report a loss per share of $4.38, six cents better sequentially, and $1.75 better than the per-share loss in the second quarter of last year. For the full year, Royal Caribbean is expected to post a loss per share of $13.55, compared to a loss per share of $18.31 last year. Revenue is forecast to improve by 11.7% to $2.47 billion.
The stock trades at 44.1 times estimated 2022 earnings and 11.7 times estimated 2023 earnings. The stock’s 52-week range is $45.71 to $99.24. The company has suspended its dividend.
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