Investing

Earnings Previews: Continental Resources, Marriott International, Restaurant Brands

Paul Ausick

Published: February 11, 2022 12:51 pm

Markets closed lower on Thursday as traders reacted to the highest consumer price index in 40 years. Early Friday, Zillow and Expedia traded up on solid earnings reports, while materials traded mostly lower. Under Armour was the poorest performer among consumer cyclical stocks.

Among stocks reporting results Friday morning, Aurora Cannabis and Affirm traded lower, while Cloudflare traded higher.

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

Continental Resources

Shale oil and gas producer Continental Resources Inc. (NYSE: CLR) has added about 155% to its share price over the past 12 months as oil prices have surged higher. The company is set to report fourth-quarter results after markets close on Monday. The stock swung wildly on Tuesday following an announcement by founder and CEO Harold Hamm cut his stake in the company from around 80% to about 24%. By early Thursday, the stock had regained all its losses, but shares had sunk again by the closing bell.

Of 30 brokerages covering the stock, 17 have put a Hold rating on the shares, and nine have a Buy or Strong Buy rating. At a recent share price of around $56.60, the stock trades just above its median price target of $56.50. At the high price target of $80, the upside potential is 41.6%.

Analysts are forecasting fourth-quarter revenue of $1.71 billion, which would be up 27.2% sequentially and 104% higher year over year. Adjusted earnings per share (EPS) are forecast at $1.66, up 38.7% sequentially and up from a loss per share of $0.23 in the year-ago quarter. For the full 2021 fiscal year, analysts expect Continental to report EPS of $4.50, compared to a loss of $1.17 per share last year, on sales of $5.53 billion, up about 114%.

Continental stock trades at 12.4 times expected 2021 EPS, 8.3 times estimated 2022 earnings of $6.69 and 9.7 times estimated 2023 earnings of $5.75 per share. The stock’s 52-week range is $21.61 to $59.82. The company pays an annual dividend of $0.80 (yield of 1.46%). Total shareholder return over the past year was 153%.

Marriott International

Shares of hotel operator Marriott International Inc. (NASDAQ: MAR) have added about 37.5% to their share price over the past 12 months. The stock popped early last year before sinking in August. Nearly all of the stock’s 12-month gain has come since that trough. The company reports fourth-quarter results first thing Tuesday morning.

Analysts have adopted a wait-and-see attitude toward the stock, with 16 of 24 rating it at Hold and seven with a Buy or Strong Buy rating. At a share price of around $175.30, the stock has outrun its median price target of $165. At the high target of $192, the upside potential is 9.5%.
Marriott analysts have forecast December quarter revenue at $4.03 billion, up 2.0% sequentially and 85.7% higher year over year. Adjusted EPS are forecast at $1.00, up 1.3% sequentially and 88.0% year over year. For the full year, EPS is forecast at $2.87, up 1,500%, on sales of $13.41 billion, up 27%.

Marriott shares trade at about 60.8 times expected 2021 EPS, 33.2 times estimated 2022 earnings of $5.26 and 25.6 times estimated 2023 earnings of $6.84 per share. The stock’s 52-week range is $125.03 to $176.52. Marriott suspended its dividend last year. Total shareholder return for the past year was nearly 38%.

Restaurant Brands

The company behind Burger King, Popeye’s and Tim Hortons, Restaurant Brands International Inc. (NYSE: QSR), owned or operated some 27,000 global locations at the end of 2020. The company’s share price has declined by about 1% over the past 12 months. Competitors Yum! Brands and McDonald’s also missed profit estimates earlier this week, as higher costs weighed on margins. However, both competitors posted 12-month gains of around 22%. Restaurant Brands is set to share fourth-quarter results before Tuesday’s opening bell.

Of 32 brokerages covering the stock, 16 have given Restaurant Brands a Buy or Strong Buy rating, and another 13 rate the stock at Hold. At a share price of around $57.50, the upside potential based on a median price target of $68 is 18.2%. At the high price target of $79, the upside potential is 37.4%.

Fourth-quarter revenue is forecast to come in at $1.50 billion, up 0.5% sequentially and 9.3% higher year over year. Adjusted EPS are pegged at $0.70, down 8.5% sequentially but up 32.0% year over year. For the 2021 fiscal year, revenue is forecast at $5.67 billion, up 14.2%, and adjusted EPS is pegged at $2.77, up 37.1%.

The stock trades at 20.7 times expected 2021 EPS, 19.0 times estimated 2022 earnings of $3.03 and 17.2 times estimated 2023 earnings of $3.34 per share. The stock’s 52-week range is $53.47 to $71.12, and the company pays an annual dividend of $2.12 (yield of 3.74%). Total shareholder return for the past 12 months was 0.63%.