After markets closed Thursday afternoon, electricity generator FirstEnergy reported quarterly results that missed analysts’ consensus earnings estimate but beat on revenues. The company issued guidance for the current quarter and fiscal year that was in line with expectations. Shares traded down by less than 1% in Friday’s premarket. Self-styled camera company Snap missed Wall Street estimates on both profits and revenue but did manage to increase its number of daily active users outside the United States by 10 million. Shares traded up by less than 1% Friday morning.
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Before markets opened on Friday, Regions Financial reported quarterly results that beat profit estimates but missed on revenue. Shares traded up by 1.2%. Miner and steel producer Cleveland-Cliffs beat the consensus earnings estimate by a penny and the revenue estimate by about 10%. The company said it expects to gin up record free cash flow in 2022. Shares traded up by 7.7%.
Gold miner Newmont missed estimates on both the top and bottom lines. The company said it expects costs to rise by 5% this year due to inflation, royalty payments and production taxes. Shares traded down about 2.8% in Friday’s premarket. Oilfield services giant Schlumberger beat both top-line and bottom-line estimates and raised its dividend by 40%. The stock traded up by around 2.6%.
American Express also beat top-line and bottom-line estimates, and it reaffirmed previous fiscal 2022 guidance. The stock traded down by about 1%, largely due to increased expenses related to recruiting new cardholders. Verizon managed to meet profit estimates but missed slightly on revenue expectations. The stock dropped by about 2.4% in Friday’s premarket session.
No quarterly reports are due out Friday afternoon. We have previewed three companies due to report before the opening bell on Monday: Activision Blizzard, Coca-Cola and Otis Worldwide.
Here are previews of four firms set to report results before markets open on Tuesday.
Archer Daniels Midland
Agricultural products and food supplier Archer Daniels Midland Co. (NYSE: ADM) has seen its share price increase by more than 67% over the past 12 months. That is more than four times the share price increase in farm equipment maker Deere, but only about 60% of the annual gain put up by fertilizer maker Mosaic. Rising food prices have driven the stock price higher and are likely to continue to do so until, suddenly, they don’t. The shares may be a good example of a momentum stock where timing is everything.
Of 16 brokerages covering the stock, seven have a Buy or Strong Buy rating on the shares, and another eight have a Hold rating. At a recent share price of around $96.00, the stock has outrun its median price target of $87.00. At the high price target of $100.00, the upside potential is 4%.
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First-quarter revenue is forecast to total $20.61 billion, which would be down about 10.7% sequentially but about 9.1% higher year over year. Adjusted earnings per share (EPS) are forecast at $1.40, down 6.7% sequentially and up by a penny year over year. For fiscal 2022, EPS are forecast at $5.50, up 5.9%, on sales of $90.12 billion, up 5.7%.
ADM stock trades at 17.5 times expected 2022 EPS, 17.7 times estimated 2023 earnings of $5.41 and 18.7 times estimated 2024 earnings of $5.15 per share. The stock’s 52-week range is $56.91 to $98.88, and the high was posted Thursday. The company pays an annual dividend of $1.42 (yield of 1.67%). Total shareholder return for the past year was 64.2%.
Corning
Shares of electronic equipment and component maker Corning Inc. (NYSE: GLW) have declined by about 22% over the past 12 months. For the past five years, Corning’s compound annual growth rate (CAGR) has been 8.44%. The net income CAGR for the past five years has not fared as well, down more than 12%. Fitch Ratings last month raised Corning’s credit rating from BBB− to BBB, noting that the company is tidying up its balance sheet and adopting more conservative spending habits.
Of 14 brokerages covering the stock, 11 have a Buy or Strong Buy rating on the shares, and the rest have a Hold rating. At a share price of around $34.50, the stock’s upside potential based on a median price target of $48.00 is 39.1%. At the high price target of $52.00, the upside potential is more than 50%.
First-quarter revenue is forecast to total $3.57 billion, down 3.9% sequentially but up about 9.5% year over year. Adjusted EPS are forecast at $0.50, down 8.1% sequentially and 11.1% higher year over year. For fiscal 2022, EPS are forecast at $2.35, up 13.8%, on sales of $15.09 billion, up 6.8%.
Corning stock trades at 14.7 times expected 2022 EPS, 13.0 times estimated 2023 earnings of $2.67 and 12.0 times estimated 2024 earnings of $2.89 per share. The stock’s 52-week range is $33.52 to $46.82. Corning pays an annual dividend of $0.96 (yield of 3.12%). Total shareholder return for the past year was negative 23.3%.
24/7 Wall St.D.R. Horton
Homebuilder D.R. Horton Inc. (NYSE: DHI) has had an up-and-down 12 months. Shares reached a 52-week high in mid-December and tumbled to a 52-week low earlier this month. Rising mortgage rates have cast a pall over the home building and selling market. Since the beginning of the year, 30-year fixed mortgage rates have climbed from around 3.3% to almost 5.4%. The Federal Reserve is going to start running off its balance sheet, which means it will no longer be buying as many mortgage-backed securities as the central bankers have been for the past few years.
There are 21 brokerages covering the stock, and 15 have a Buy or Strong Buy rating. The other six rate the shares at Hold. At a share price of around $73.25, the upside potential based on a median price target of $114.00 is 55.6%. At the high price target of $151.00, the implied upside is 106%. Is the stock a bargain or a value trap?
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Fiscal second-quarter revenue is forecast to total $7.64 billion, up 8.4% sequentially and about 18.4% year over year. Adjusted EPS are forecast at $3.50, up 10.6% sequentially and by 38.3% year over year. For fiscal 2022, EPS are forecast at $15.87, up nearly 39%, on sales of $35.33 billion, up 27.2%.
The stock trades at 4.6 times expected 2022 EPS, 4.4 times estimated 2023 earnings of $16.54 and 4.7 times estimated 2024 earnings of $15.49 per share. The stock’s 52-week range is $68.79 to $110.45. The company pays an annual dividend of $0.82 (yield of 1.23%). Total shareholder return for the past year was negative 20.8%.
24/7 Wall St.PepsiCo
Soft-drink and snack food maker PepsiCo Inc. (NYSE: PEP) has added about 23% to its share price over the past 12 months, including a 12% drop between mid-January and mid-March. The recent share price gain is based on the company’s popular brands and the pricing power that comes with them. PepsiCo’s ability to pass price increases along to consumers is expected to improve returns to shareholders through the rest of this year and beyond. Analysts will be paying close attention to revenue and profit growth forecasts.
Of 22 brokerages covering the stock, half rate the shares a Buy or Strong Buy and another nine have Hold ratings. At a share price of around $175.80, the upside potential based on a median price target of $181.45 is about 3.2%. At the high price target of $200.00, the upside potential is 13.8%.
First-quarter revenue is forecast at $15.54 billion, down 38.5% sequentially but up about 4.9% year over year. Adjusted EPS are forecast to fall sequentially by about 19.6% to $1.53, which would be two cents higher year over year. For the full 2022 fiscal year, analysts currently expect PepsiCo to post revenue of $81.33 billion, up 2.3%, and EPS of $6.67, up 6.6%.
The stock trades at 26.2 times expected 2022 EPS, 24.2 times estimated 2023 earnings of $7.24 and 22.3 times estimated 2024 earnings of $7.86 per share. The stock’s 52-week range is $141.72 to $177.24. PepsiCo pays an annual dividend of $4.25 (yield of 2.46%). Total shareholder return for the past year was 22.3%.
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