Investing

Earnings Previews: Enterprise Products, Exxon Mobil, NXP Semiconductors, Sirius XM, UPS

Paul Ausick

Published: January 28, 2022 1:23 pm

Economic concerns outweighed corporate earnings Friday morning. Lower-than-expected consumer spending coupled with higher inflation and low spirits among consumers were driving 10-year and two-year Treasury yields lower.

Apple beat the revenue estimate by about $4.5 billion and the per-share earnings estimate by 11%, and shares traded higher by around 4.5% shortly after the opening bell. Credit services firm Visa beat the earnings estimate by 6.5% and the revenue estimate by 2.4% and also traded up by more than 6%.

There were no earnings reports of interest for Friday afternoon or Monday morning.

Here is a look at five firms scheduled to report results after markets close on Monday or before they open on Tuesday.

Enterprise Products

Energy pipeline operator Enterprise Products Partners LP (NYSE: EPD) has posted a share price gain of about 26% over the past 12 months. It is the second-largest oil and gas midstream (pipeline and infrastructure) company in the country, with a market cap of about $53.6 billion. Enterprise will report fourth-quarter results first thing Tuesday morning.

Regardless of the prices for oil and natural gas, pipeline companies will get paid to transport it, even if the seller does not have enough to put on the line. These guaranteed cash flows make master limited partnerships (MLPs) hot properties with investors looking for significant returns.

Of the 24 firms covering the stock, 21 have a rating of Buy or Strong Buy on the shares. At a recent price of around $23.70 a share, the stock trades about 18% below its consensus price target of $28. At the high target of $32, the upside potential on Enterprise stock is 35%.

Revenue for the December quarter is forecast at $9.67 billion, which would be down about 10.8% sequentially but 37.3% higher year over year. Adjusted earnings per share (EPS) are forecast at $0.54, up less than 1% sequentially and 5.9% higher year over year. For the full 2021 fiscal year, analysts expect to see $2.16 in EPS, up 2.6% year over year, on sales of $39.56 billion, an increase of 45.3%.

Enterprise stock trades at about 11.1 times expected 2021 EPS, 11.0 times estimated 2022 earnings of $2.18 and 10.3 times estimated 2023 earnings of $2.34. The stock’s 52-week range is $20.10 to $25.69, and the company pays an annual distribution of $1.86 (yield of 7.61%). Total shareholder return for the past 12 months was 24.4%.

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Shares of Exxon Mobil Corp. (NYSE: XOM) have risen by nearly 75% over the past 12 months. Since a recent low in mid-August, the stock has gained almost 45%. Rising crude oil prices and a watchful eye on capital spending will keep Exxon shares rising with oil prices. Morgan Stanley analyst Devin McDermott recently reiterated his Overweight rating on the stock and raised his price target from $87 to $95. Exxon’s improving free cash flow and high dividend are paying off for investors.

Of 29 analysts covering the stock, 20 rate the shares a Hold, four give the stock a Strong Buy rating and four more rate the shares at Buy. At a price of around $74.70, the shares trade above the median price target of $73. At the high target of $100, the upside potential is nearly 34%.

Fourth-quarter revenue is forecast at $84.58 billion, up 14.6% sequentially and 81.7% year over year. Adjusted EPS are pegged at $1.92, up 21.5% sequentially and wildly higher than EPS of $0.03 in the year-ago quarter. For full fiscal 2021, current estimates call for EPS of $6.21, up from a loss of $0.33 in 2020, on sales of $280.58 billion, up almost 59%.

Exxon shares trade at about 14.3 times expected 2021 EPS, 12.1 times estimated 2022 earnings of $6.16 and 12.4 times estimated 2023 earnings of $6.00 per share. The stock’s 52-week range is $44.29 to $75.01, and Exxon pays an annual dividend of $3.52 (yield of 4.75%). Total shareholder return for the past 12 months was 73%.

NXP Semiconductors

After posting an all-time high share price in early December, Netherlands-based NXP Semiconductors N.V. (NASDAQ: NXPI) has watched about 21% of that high price evaporate. The share price gain for the past 12 months is about 17.5%. How the company performed in the automotive market is a concern given supply chain constraints in that sector. We shall find out after markets close Monday and NXP releases its December-quarter report.

Of 30 analysts covering the company, 19 rate the stock a Buy or Strong Buy and 10 more rate the shares at Hold. At a share price of around $185.10, the upside potential based on a median price target of $250 is 35%. At the high price target of $300, the upside potential is 62%.

Fourth-quarter revenue is expected to come in at $3 billion, up 5% sequentially and 19.5% year over year. Adjusted EPS are forecast at $3.01, up 5.8% sequentially and 35.6% year over year. For full fiscal 2021, analysts are currently looking for EPS of $10.61, up 73%, on sales of $11.03 billion, up 28%.

NXP stock trades at about 17.4 times expected 2021 EPS, 15.5 times estimated 2022 earnings of $11.90 and 14.4 times estimated 2023 earnings of $12.87 per share. The stock’s 52-week range is $159.81 to $239.91. NXP pays an annual dividend of $2.25 (yield of 1.14%). Total shareholder return for the past 12 months was 13.8%.

Shares of satellite radio provider streaming service Sirius XM Holdings Inc. (NASDAQ: SIRI) have dropped about 10% over the past 12 months. The company on Thursday announced a deal with Neil Young, who was dropped by Spotify at the singer/songwriter’s request. Young told Spotify that either Joe Rogan goes or Young would. Young’s deal with the company covers a seven-day run on satellite radio and a month-long run on the Sirius XM app. That’s hardly enough to turn the company around, however. Sirius XM reports results early on Tuesday.

Of 15 brokerages covering the stock, eight have a rating of Buy or Strong Buy and another three rate the shares at Hold. At a price of around $6.10 per share, the potential upside based on a median price target of $7.50 is about 23%. At the high price target of $10, the upside potential is 39%. (The share price and the price targets are unchanged since the company reported third-quarter results in October.)

The consensus estimate calls for fourth-quarter revenue of $2.24 billion, up 2.0% sequentially and 2.3% year over year. Adjusted EPS are pegged at $0.07, down nearly 7% (one penny) sequentially and flat year over year. For the full fiscal year, Sirius XM is expected to report EPS of $0.30, up 21.3%, on revenue of $8.66 billion, up 7.7%.

Sirius XM’s stock trades at about 20.1 times expected 2021 EPS, 17.7 times estimated 2022 earnings of $0.34 and 15.5 times estimated 2023 earnings $0.39. The stock’s 52-week range is $5.67 to $7.29, and the current annual dividend is about $0.09 (yield of 1.47%). Total shareholder return for the past 12 months was negative 3.5%.

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UPS

Shares of United Parcel Service Inc. (NYSE: UPS) have added about 27% over the past 12 months, including a drop of nearly 11% since posting a recent high on January 7. The stock’s 52-week low was posted last week.

The company (like its competitors FedEx and the U.S. Postal Service) avoided the holiday season foul-ups of 2020 and reported on-time delivery rates exceeding 90%. But that costs money, both for higher labor costs and more demand for expensive fuel. Both freight carriers could see a boost to their air freight revenue as supply chain kinks are not close to getting straightened out yet. UPS reports results before Tuesday’s opening bell.

Analysts remain bullish on the stock, with 17 of 30 giving the shares a Buy or Strong Buy rating and 11 others rating them at Hold. At a share price of around $195.80, the upside potential based on a median price target of $235.30 is 20.2%. At the high price target of $267, the upside potential is 36.4%.

Analysts expect UPS to report fourth-quarter revenue of $27.07 billion, up 16.7% sequentially and about 8.7% higher year over year. Adjusted EPS are pegged at $3.10, up 14.6% sequentially and 16.5% year over year. For the full fiscal year, analysts are looking for EPS of $11.63, up more than 41%, on sales of $96.56 billion, up 14.1%.

UPS stock trades at about 16.8 times expected 2021 EPS, 16.2 times estimated 2022 earnings of $12.09 and 15.1 times estimated 2023 earnings of $12.92 per share. The stock’s 52-week range is $154.76 to $220.24. UPS pays an annual dividend of $4.08 (yield of 2.05%). Total shareholder return for the past 12 months was 27%.