After markets closed on Tuesday, Netflix reported March-quarter results that beat the consensus earnings estimate but missed on revenue. The really bad news was a net loss of 200,000 subscribers, miles away from analysts’ estimate for a net gain of 2.5 million new subscribers. The company also forecast a net loss of 2 million subscribers in the second quarter. The stock traded down more than 27% in Wednesday’s premarket session.
[in-text-ad]
IBM beat analysts’ estimates on both the top and bottom lines Tuesday afternoon, and shares traded up about 1.9% Wednesday morning. Chip manufacturing equipment maker ASML also beat top-line and bottom-line estimates early Wednesday and guided second-quarter revenue below existing estimates, while reaffirming full-year guidance for revenue of €22.3 billion (up 20% year over year). Shares traded up 6% in Wednesday’s premarket.

Abbott Labs beat estimates on both the top and bottom lines Wednesday morning and reaffirmed fiscal 2022 guidance. Investors might be wondering about future sales of its COVID-19 test kits, which accounted for $3.3 billion in quarterly sales. The stock traded down about 2% in premarket trading Wednesday. Baker Hughes missed both the consensus earnings and revenue estimates. The stock traded down about 2%.

Procter & Gamble beat both earnings and revenue expectations and issued guidance that puts consensus estimates near the low end of the company’s forecast ranges. Shares traded 1% higher in the premarket session.

After markets close Wednesday afternoon, Alcoa, CSX, Kinder Morgan, Tesla and United Airlines will be among the host of companies reporting. We also have previewed four firms set to report results before markets open Thursday morning: American Airlines, AT&T, Freeport-McMoRan and NextEra Energy. Earlier in the morning, we previewed expectations for earnings due late Thursday or early Friday from FirstEnergy, Regions Financial and Snap.

Here is a look at five firms reporting quarterly results before Friday’s opening bell.

American Express

Dow Jones industrial average component American Express Co. (NYSE: AXP) has posted a 12-month share price increase of 29%, even including big drops in late November and late February.
In an analyst’s report last week, J.P. Morgan cut its rating on the stock to Neutral, citing valuation concerns and doubts about economic growth. Earlier this week, the Wall Street Journal reported that the Internal Revenue Service is investigating a dubious tax break that Amex was pitching to its clients. The lack of enthusiasm for the stock, though, appears tied most closely to the outlook for spending, with inflation continuing to threaten consumers’ buying power.
[in-text-ad]
Analysts have taken a wait-and-see position on the company’s stock. Of 25 brokerages covering the firm, 12 have a Hold rating. Another 12 have a Buy or Strong Buy rating. At a recent price of around $188.30 a share, the implied gain based on a median price target of $200.00 is about 6.2%. At the high price target of $226.00, the upside potential rises to 20%.

First-quarter revenue is forecast to slip by about 4% sequentially to $11.66 billion, but that would be a jump of about 27% year over year. Adjusted earnings per share (EPS) are pegged at $2.47, up 13.1% sequentially but down about 9.9% year over year. For the full 2022 fiscal year, analysts are looking for EPS of $9.73, down 2.9%, on revenue of $50.42 billion, up nearly 19%.

The stock trades at 19.4 times expected 2022 EPS, 16.6 times estimated 2023 earnings of $11.33 and 14.5 times estimated 2024 earnings of $112.97 per share. The stock’s 52-week trading range is $140.68 to $199.55, and American Express pays an annual dividend of $1.72 (yield of 1.11%). Total shareholder return for the past 12 months was 30.9%.

Cleveland-Cliffs

Iron ore miner and steelmaker Cleveland-Cliffs Inc. (NYSE: CLF) has added about 76% to its share price over the past 12 months. Like all commodity producers, the company’s fortunes turned on the price it could get for its iron ore and, ultimately, its steel. Since late January, when the shares hit a 52-week low, the stock is up nearly 95%. Russia’s invasion of Ukraine sent steel prices soaring again, but price gains have moderated in the past couple of weeks. That trend could last for a while.

Of 10 brokerages covering the stock, five have put a Buy or Strong Buy rating and the rest rate the stock at Hold. At a share price of around $30.60, the implied gain based on a median price target of $32.00 is 4.6%. At the high price target of $46.00, the upside potential is just over 50%.

Analysts are forecasting first-quarter revenue of $5.55 billion, up 3.9% sequentially and 37% higher year over year. Adjusted EPS are forecast at $1.52, down 13.6% sequentially but up from $0.31 per share (390%) in the year-ago quarter. For full fiscal 2022, analysts expect Cliffs to report EPS of $5.61, down 3%, on sales of $22.86 billion, up more than 11.8%.
The stock trades at 5.4 times expected 2022 EPS, 8.1 times estimated 2023 earnings of $3.76 and 12 times estimated 2024 earnings of $2.53 per share. The stock’s 52-week range is $15.81 to $34.04, and the company does not pay an annual dividend. Total shareholder return over the past year was 83.2%.
[in-text-ad]

Newmont

Over the past 12 months, the price of gold has increased by about 9.65%, and nearly all that gain has come since the end of January. Newmont Corp. (NYSE: NEM) has seen its share price rise by about 31.2% over the same 12-month period, and more than all that gain has come since late January.

Newmont recently acquired the last 5% interest outstanding in the Yanacocha gold mine in Peru after paying about $300 million to Buenaventura for a near-44% stake in February. That earlier deal included the transfer to Buenaventura of Newmont’s 47% stake in another joint venture. Yanacocha is reportedly the largest gold mine in South America.

Analysts remain cautious on Newmont stock, with 12 of 20 brokerages giving the shares a Hold rating, while the rest have Buy or Strong Buy ratings. At a share price of around $82.40, the stock has outrun its median price target of $72.00. At the high price target of $96.00, the upside potential is 6.3%.

First-quarter revenue is forecast at $3.05 billion, down 10.1% sequentially and flat year over year. Adjusted EPS are forecast at $0.73, down 6.5% sequentially and down by a penny year over year. For the full 2022 fiscal year, estimates call for EPS of $3.24, up 9.3%, on sales of $13.11 billion, up 7.2%.

Newmont stock trades at 25.5 times expected 2022 earnings, 26.4 times estimated 2023 earnings of $3.11 and 27.0 times estimated 2024 earnings of $3.05 per share. The stock’s 52-week range is $52.60 to $89.37. Newmont pays an annual dividend of $2.20 (yield of 2.67%). Total shareholder return for the past year was 29.4%.

Schlumberger

The largest U.S.-based oilfield services company, Schlumberger Ltd. (NYSE: SLB) has seen its stock price rise by nearly 61% over the past 12 months, less than its two main rivals, Baker Hughes and Halliburton. Like its competitors, Schlumberger has suspended its operations in Russia, which accounted for about 5% of Schlumberger’s sales last year.
The shortage of rigs and labor brought on by the pandemic has left the services companies with significant pricing power until (or unless) they can ramp up to meet increased demand. Whatever happens, that ramp is not likely to be too steep.
[in-text-ad]
Analysts remain bullish on the company. Of 30 brokerages covering the stock, 25 have a Buy or Strong Buy rating. The other five rate the stock at Hold. At a share price of around $42.05, the implied upside based on a median price target of $49.00 is 16.5%. At the high target of $56.00, the upside potential is 33.2%.

First-quarter revenue is forecast at $5.9 billion, down 5.2% sequentially and up 13% year over year. Adjusted EPS are forecast at $0.33, down nearly 20% sequentially and up more than 57% year over year. For the full 2022 fiscal year, analysts are expecting Schlumberger to post EPS of $1.87, up 45.7%, on sales of $25.98 billion, up 13.3%.

Schlumberger shares trade at 22.6 times expected 2022 EPS, 16.1 times estimated 2023 earnings of $2.62 and 13.7 times estimated 2024 earnings of $3.07 per share. The stock’s 52-week range is $24.52 to $46.27. Schlumberger pays an annual dividend of $0.50 (yield of 1.19%). Over the past 12 months, total shareholder return was 69.5%.

Verizon

Telecom giant and Dow component Verizon Communications Inc. (NYSE: VZ) has seen its share price fall by about 2.7% over the past 12 months. Since posting a 52-week low in early December, however, the shares are up about 11.6%, including another sharp drop in mid-March.

Now that rival AT&T has returned to its telecom roots after completing the spinoff of Warner Media, the two rivals will continue to slug it out, primarily on the basis of dividend payments (AT&T still tops Verizon, even after slicing its dividend). Cable operators like Comcast and Charter are also starting to encroach on the telecom giants’ wireless business with packages of broadband access plus wireless service that many consumers find compelling. Verizon plays in an expensive league, too, where costs for spectrum and infrastructure run into multiple billions annually.

While analysts are definitely cool toward Verizon’s potential to grow its share price, the company’s massive dividend yield makes it hard to recommend selling the stock. Of 28 analysts, nine have Buy or Strong Buy ratings on the stock, and 18 rate the shares at Hold. At a share price of around $54.20, the implied gain based on a median price target of $59.00 is 8.9%. At the high price target of $72.00, the potential upside is 32.8%.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

First-quarter revenue is forecast to come in at $33.61 billion, down 1.3% sequentially but up 2.3% year over year. Adjusted EPS are forecast at $1.35, up 3% sequentially and up by the same amount year over year. For full fiscal 2022, analysts currently expect Verizon to post EPS of $5.44, up 1.0%, on sales of $137.26 billion, up 2.7%.

Verizon stock trades at 10.0 times expected 2022 EPS, 9.6 times estimated 2023 earnings of $5.63 and 9.3 times estimated 2024 earnings of $5.86 per share. The stock’s 52-week range is $49.69 to $59.85. Verizon pays an annual dividend of $2.54 (yield of 4.72%). Total shareholder return over the past 12 months was negative 2.6%.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.