Investing

Earnings Previews: Boeing, Coca-Cola, GM, McDonald's

Paul Ausick

Published: October 25, 2021 12:36 pm

Only 14 companies in our watch list reported earnings before markets opened Monday. But the week ahead promises to be a busy one, with more than 900 firms reporting results.

This week gets off to a big start with these reports due after markets close Monday or before they open Tuesday morning: Facebook, GE, Lockheed Martin, Raytheon and UPS.

After markets close, Alphabet, AMD and Microsoft, along with Robinhood, Twitter and Visa, are scheduled to report quarterly results.

Here is a look at four companies scheduled to post results before markets open on Wednesday.

Boeing

Since February of last year when its 737 MAX was grounded, shares of Boeing Co. (NYSE: BA) are down about 38%. Not a bad recovery considering the stock fell by about $250 per share in just over one month. Over the past 12 months, shares have gained about 27%, but Boeing, a Dow Jones industrial average component, is not out of the woods yet.

The company’s 777X continues to have problems, and the new twin-aisle plane is not due to enter into service until late 2023. But the pandemic has cut demand sharply for long-haul flights, and many customers are talking about deferring or cutting orders for the plane. The 787 Dreamliner continues to experience some quality issues, while new orders for the 737 MAX continue to rise. Boeing delivered 26 of the 737 MAX jets last month, as it slowly rebuilds its production and clears its inventory.

There are 23 analysts covering the stock, and 13 have a Buy or Strong Buy rating on the stock while nine rate the shares at Hold. At a recent price of around $212.30, the implied upside based on a median price target of $272 is 28%. At the high target of $314, the implied upside is about 48%.

Consensus estimates call for third-quarter revenue of $16.27 billion, which would be down 4.3% sequentially but up 15% year over year. Analysts are forecasting a quarterly loss per share of $0.14, compared to a profit of $0.40 per share in the prior quarter and a loss per share of $1.39 last year. For the full fiscal year, Boeing is expected to post a per-share loss of $0.88, compared to last year’s loss per share of $23.25. Revenue is expected to increase by nearly 23% to $71.33 billion.

Boeing stock trades at 36.7 times expected 2022 earnings and 26.4 times estimated 2023 earnings. The stock’s 52-week range is $141.58 to $278.57. Boeing has suspended its dividend.

Coca-Cola

Long-time Warren Buffett favorite, and another Dow stock, Coca-Cola Co. (NYSE: KO) has posted a share price gain of about 10.5% over the past 12 months. Shares traded up by nearly 16.5% in mid-August but have since given back a big slice of that gain. More than most soft-drink makers, Coke depends on sales to restaurants, and the company’s revenue took a beating during the pandemic. Coke bounced back in the prior quarter, and analysts will be looking for more evidence that the company’s recovery is continuing.
Analysts are bullish on the stock, with 17 or 26 analysts giving the stock a Buy or Strong Buy rating. The other nine have Hold ratings on the shares. At a price of around $54.20, the upside potential based on a median price target of $62.05 is 14.5%. At the high price target of $67, the upside potential is nearly 24%.

Third-quarter revenue is forecast at $9.72 billion, down 4% sequentially and 12.4% year over year. Adjusted earnings per share (EPS) are pegged at $0.58, down 15% sequentially and up 5.5% year over year. For the full year, current consensus estimates call for EPS of $2.25, up 15.5%, on revenue of $37.83 billion, up 14.67%.

Coca-Cola stock trades at 24.1 times expected 2021 EPS, 22.4 times estimated 2022 earnings and 20.9 times estimated 2023 earnings. The stock’s 52-week range is $47.30 to $57.56, and the company pays an annual dividend of $1.68 (yield of 3.09%).

General Motors

General Motors Co. (NYSE: GM) has had a pretty good year. The stock is up 56% over the past 12 months, including a dip of around 20% in early September. GM plans to have 30 electric vehicles on the market globally by 2025, an ambitious goal considering it has to build that capacity while still producing internal combustion-powered cars and, especially, pickups. Quarterly results, and guidance, are likely to reveal the impact of the chip shortage that is plaguing nearly every automaker.

Analysts like the company’s prospects. Of 21 brokers covering the stock, 19 have a Buy or Strong Buy rating on the shares, and the other two rate the stock at Hold. At a price of around $57.50, the upside potential based on a median price target of $70.15 is 22%. At the high price target of $90, the upside potential is more than 56%.

Third-quarter revenue is forecast at $27.88 billion, down 18.5% sequentially and 21% year over year. Adjusted EPS are pegged at $0.92, down 53.4% sequentially and 67% year over year. For the full year, current consensus estimates call for EPS of $6.28, up 28.3%, on revenue of $126.47 billion, up 3.3%.

GM stock trades at 9.1-times expected 2021 EPS, 8.4 times estimated 2022 earnings and 8.2 times estimated 2023 earnings. The stock’s 52-week range is $33.55 to $64.30. GM does not pay a dividend.

McDonald’s

Shares of Dow Jones industrial average component McDonald’s Corp. (NYSE: MCD) have added just 6.2% to their share price over the past 12 months. Since late March, however, the stock is up nearly 18%. Since its trough in late March of last year, the stock is up just over 80%. Competitor Burger King, owned by Restaurant Brands, reported a miss on revenue and continued difficulty staffing their stores. Analysts will be paying close attention to how McDonald’s is being affected by these same two issues.

Analysts are quite bullish on the stock, with 28 of 37 giving the stock a Buy or Strong Buy rating, while the other nine rate the shares at Hold. At a price of around $237.60, the upside potential based on a median price target of $270 is 13.6%. At the high price target of $306, the upside potential is about 28.8%.

Third-quarter revenue is forecast at $6.04 billion, up 2.6% sequentially and 11.4% year over year. Adjusted EPS are pegged at $2.46, 4% higher sequentially and up nearly 11% year over year. For the full year, current consensus estimates call for EPS of $9.06, up almost 50%, on revenue of $22.96 billion, up 19.6%.

McDonald’s stock trades at 26.2 times expected 2021 EPS, 24.0 times estimated 2022 earnings and 21.9 times estimated 2023 earnings. The stock’s 52-week range is $202.73 to $249.95. McDonald’s pays an annual dividend of $5.52 (yield of 2.32%).