Earnings season for the September quarter got underway with reports Wednesday morning from JPMorgan, Delta Air Lines and BlackRock. Investors were less than stupefied with the results, taking JPMorgan down by more than a percentage point and Delta down by more than three points. Only BlackRock appeared to exceed some expectations.

After markets close Wednesday, Taiwan Semiconductor, United Healthcare and Walgreens are scheduled to report quarterly results. We also have previewed Thursday morning reports from BofA, Citi, Morgan Stanley, U.S. Bank and Wells Fargo.
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Here’s a look a one report due out after markets close Thursday and three due out before markets open on Friday.

Alcoa

Aluminum producer and refiner Alcoa Corp. (NYSE: AA) has added 280% to its share price over the past 12 months, including more than doubling since the beginning of the year. On Tuesday, aluminum prices hit their highest level since 2008. Because aluminum requires so much electricity to refine (if it were a country, the aluminum industry would be the world’s fifth-largest consumer of electricity), production has been slowed as countries, particularly China, search for ways to curb industrial consumption of electricity. If supplies are cut, prices are likely to rise even higher. Alcoa reports results after markets close Thursday.

Alcoa doesn’t attract much attention from analysts. Only 11 cover the stock, but eight of those have a Buy or Strong Buy rating on the stock. The other three rate the shares at Hold. At a recent price of around $47.90, the stock’s upside potential based on a median price target of $56.50 is 18%. At the high target of $63, the upside potential is 31.5%.

Third-quarter revenue is forecast to reach $2.92 billion, which would be up 2.9% sequentially and 23% year over year. Adjusted earnings per share (EPS) are forecast at $1.80, up 21% sequentially and 780% year over year. For the full year, EPS are currently estimated to reach $6.20, compared to a loss of $1.16 a year ago, on revenue of $11.83 billion, up 27.3%.

Alcoa stock trades at 7.6 times expected 2021 EPS, 7.7 times estimated 2022 earnings and 8.6 times estimated 2023 earnings. The stock’s 52-week range is $11.41 to $52.45. Alcoa does not pay a dividend.

Charles Schwab

Charles Schwab Corp. (NYSE: SCHW) has grown its price by about 103% over the past 12 months. As with Goldman Sachs, growth flattened out after early June, and Schwab’s share price has increased by only about 2.3% since then. The company’s market cap of around $144 billion ranks second in the capital markets industry, ahead of Goldman Sachs (about $130 billion market cap) and behind Morgan Stanley ($176 billion). Schwab reports third-quarter results before markets open Friday.

Analysts are mostly bullish on the stock, with 10 of 16 rating the shares a Buy or Strong Buy and the rest giving the stock Hold ratings. At a price of around $75.20, the upside potential based on a median price target of $87 is 15.7%. At the high target of $98, the upside potential reaches 30.3%.
Third-quarter revenue is forecast at $4.51 billion, down about 0.3% sequentially and up about 84% year over year. Adjusted EPS are forecast to rise by more than 15% sequentially to $0.81. That’s up about 60% year over year. The current estimates for fiscal 2021 call for revenue of $18.33 billion, up nearly 57%, and EPS of $3.18, up nearly 30%.

Charles Schwab stock trades at 24.1 times expected 2021 EPS, 21.6 times estimated 2022 earnings and 18.3 times estimated 2024 earnings. The stock’s 52-week range is $37.01 to $78.94. Schwab pays an annual dividend of $0.72 (yield of 0.93%).
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Goldman Sachs

The smallest of the nation’s six biggest diversified banks, Goldman Sachs Group Inc. (NYSE: GS) has posted a 12-month share price gain of nearly 84%. Since early June, however, the shares have bounced around some to trade lower by about 0.8%. Analysts expect the company to report negative operating leverage for the quarter and a drop in fixed-income trading to go along with it. Goldman Sachs reports quarterly results first thing on Friday.

Of the 27 analysts covering the firm, just one has a Sell rating on the stock, while 17 rate the shares at Buy or Strong Buy. At a price of around $380.50, the upside potential based on a median price target of $433.50 is 13.9%. At the high price target of $533, the implied upside is 40%.

Third-quarter revenue is forecast to come in at $11.61 billion, a decline of almost 25% sequentially and an increase of 7.7% year over year. Adjusted EPS are forecast at $9.94, down 33.8% sequentially and up about 2.7% year over year. The current estimates for fiscal 2021 call for revenue of $55.67 billion, up 25%, and EPS of $53.58, up 60%. More than 60% of the EPS growth took place in the first half of the year.

Goldman Sachs stock trades at 7.2 times expected 2021 EPS, 10.2 times estimated 2022 earnings and 9.8 times estimated 2023 earnings. The stock’s 52-week range is $185.52 to $420.76. The annual dividend is $8.00 a share (yield of 2.07%).

Truist

Once known as BB&T, Truist Financial Corp. (NYSE: TFC) is the country’s third-largest regional bank, with a market cap of around $80 billion. Over the past 12 months, the stock’s value has risen by around 43%. U.S. Bancorp, the nation’s largest regional bank, posted a 64% share price gain in the same period. While Truist does not have the daily trading volume of some meme stocks, its daily average of about 4.7 million is about twice that of Goldman Sachs and 20% higher than U.S. Bancorp’s. The bank also pays a solid dividend.

Sentiment on the stock is mixed, with 10 analysts giving the shares a Buy or Strong Buy rating and 11 rating the shares at Hold. At a price of around $59.10, the upside potential based on a median price target of $65 is 10%. At the high price target of $76, the upside potential is 28.6%.

Analysts expect third-quarter revenue of $5.53 billion, down 2.5% sequentially and about 1.3% year over year. Adjusted EPS are forecast at $1.20, down 22% sequentially and up by nearly 24% year over year. For the full fiscal year, current estimates call for EPS of $5.13, up 35%, and revenue of $22.29 billion, down about 2.4%.

Truist stock trades at 11.7 times expected 2021 EPS, 12.4 times estimated 2022 earnings and 11.2 times estimated 2023 earnings. The stock’s 52-week range is $40.05 to $62.69, and the bank pays an annual dividend of $1.92 (yield of 3.19%).

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