U.S. markets got off to a rocky start Friday morning. Netflix reported results Thursday afternoon that disappointed investors, primarily because of its uncertain guidance. Both railroad operator CSX and chemicals maker PPG Industries beat earnings and revenue estimates, but both traded down in Friday’s premarket.
Earlier Friday morning, financial services firms Ally and Huntington Bancshares, as well as Schlumberger, also beat on both the top and bottom lines but traded lower in Friday’s premarket session.
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We have already previewed three companies set to report earnings on Monday: Halliburton, IBM and Steel Dynamics.
Here is a look at four firms scheduled to report results before markets open on Tuesday.
American Express
Dow Jones industrial average component American Express Co. (NYSE: AXP) has posted a 12-month share-price increase of 28.3%, even including a drop of nearly 14% since late October. The financial sector has been volatile since the beginning of the year and trades at basically the same level now that it did at the end of 2021. Investors’ views on inflation and Federal Reserve actions likely will have a significant impact on financial stocks in the near term.
Analysts have taken a wait-and-see position on the company’s stock. Of 26 brokerages covering the firm, 14 have a Hold rating. Another 11 have a Buy or Strong Buy rating. At a recent price of around $160.60 a share, the implied gain based on a median price target of $190 is about 18.3%. At the high price target of $233, the upside potential rises to 45%.
Fourth-quarter revenue is forecast to rise by about 5.7% sequentially to $11.55 billion, which would be a jump of about 23.50% year over year. Adjusted earnings per share (EPS) are pegged at $1.83, down about 19.3% sequentially but up almost 4% year over year. For full fiscal 2021, analysts are looking for EPS of $9.60, up nearly 155%, on revenue of $41.83 billion, up nearly 16%.
The stock trades at 16.8 times expected 2021 EPS, 16.6 times estimated 2022 earnings of $9.71 and 14.3 times estimated 2023 earnings of $11.23 per share. The stock’s 52-week range is $112.10 to $189.03, and American Express pays an annual dividend of $1.72 (yield of 1.07%). Total shareholder return for the past 12 months was 26.7%.
General Electric
Over the past 12 months, shares of General Electric Co. (NYSE: GE) have added about 7.8% to their price. Since its late July reverse stock split, GE stock has bounced around, and it trades up by about 2.5% to date. Under CEO Larry Culp, the company has made significant progress on its transition plan. Culp and GE have forecast free cash flow for fiscal 2021 in a range of $3.75 billion to $4.75 billion. Along with guidance for 2022 free cash flow, nothing is likely to be more important for investors.
Analysts remain bullish on the stock. There are 15 Buy or Strong Buy ratings on the shares, along with six Hold ratings. No brokerage rates the stock a Sell or Strong Sell. At a share price of around $97.90, the potential upside to a median price target of $125 is about 27.7%. At the high target of $142, the upside potential is 46%.
Fourth-quarter revenue is forecast at $21.35 billion, which would be up 15.9% sequentially and down about 1.3% year over year. Adjusted EPS are forecast at $0.82, up 43.5% sequentially and up more than 28% year over year. For the full year, analysts expect GE to report EPS of $2.04, up more than 2,400%, on sales of $74.89 billion, down almost 6%. The EPS gains are not split-adjusted.
GE stock trades at 48.3 times expected 2021 EPS, 24.5 times estimated 2022 earnings of $4.00 and 17.3 times estimated 2023 earnings of $5.69 per share. The stock’s 52-week range is $85.12 to $116.17 (split-adjusted), and GE pays an annual dividend of $0.32 (yield of 0.33%). Total shareholder return for the past 12 months was 11.3%.
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Johnson & Johnson
Over the past 12 months, pharmaceuticals giant and Dow component Johnson & Johnson (NYSE: JNJ) has added about 4.3% to its share price. After announcing a planned spinoff of its consumer health division in mid-November, shares dropped 5%, before jumping by 11.6% earlier this month. Half that gain has been lost in the past two weeks.
Of 18 brokerages covering the company, nine have Buy or Strong Buy ratings and the rest rate the shares at Hold. At a share price of around $165.10, the upside potential based on a median price target is 9%. At the high target of $215, the upside potential is 30%.
Fourth-quarter revenue is forecast at $25.29 billion, up 8.4% sequentially and up 12.5% year over year. Adjusted EPS are expected to come in at $2.12, down 18.6% sequentially but up 14% year over year. For full fiscal 2021, analysts expect EPS of $9.79, up nearly 22%, on sales of $94.31 billion, up 14.2%.
J&J shares trade at 16.9 times expected 2021 EPS, 16.1 times estimated 2022 earnings of $10.33 and 15.1 times estimated 2023 earnings of $10.96 per share. The stock’s 52-week range is $151.47 to $179.92. The company pays an annual dividend of $4.24 (yield of 2.55%). Total shareholder return for the past year was 5.2%.
3M
Another Dow component, 3M Co. (NYSE: MMM) is set to report fourth-quarter results. Over the past 12 months, the shares have increased by about 5.9% but since early June, shares are down more than 14%. 3M was among the Dogs of the Dow for 2022, one of 10 Dow stocks paying the highest dividend. Until Thursday, the stock traded higher by about 0.5% this year. Then shares tumbled by 2.75% and the stock closed down about 2.3% for the year so far.
Analyst sentiment is mixed, with 13 of 21 brokerages putting a Hold rating on the shares and only three with a Buy rating. At a per-share price of around $173.40, the implied gain based on a median price target of $187 is 7.8%. At the high target of $237, upside potential is 37.7%.
The consensus revenue estimate for the fourth quarter is $8.58 billion, down 4.1% sequentially and flat year over year. Adjusted EPS are forecast at $2.02, a sequential decline of 17.5% and a decrease of 15.1% year over year. For full fiscal 2021, analysts are looking for EPS to rise by 12.3% to $9.81 on a revenue increase of 9.8% to $35.34 billion.
3M stock trades at 17.7 times expected 2021 EPS, 16.8 times estimated 2022 earnings of $10.35 and 15.7 times estimated 2023 earnings of $11.05 per share. The stock’s 52-week range is $167.24 to $208.95, and 3M pays an annual dividend of $5.92 (yield of 3.32%). Total shareholder return for the past 12 months was 4.9%.
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