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 2.85% in mid-morning trading Friday. 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 down by less than 1% Friday morning.
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Regions Financial reported quarterly results that beat profit estimates but missed on revenue. Shares traded up by almost 1%. 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 down by less than 1% in mid-morning action Friday.
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 4.3% Friday morning. Oilfield services giant Schlumberger beat both top-line and bottom-line estimates and raised its dividend by 40%. The stock traded around 4.4% higher.
American Express also beat top-line and bottom-line estimates and reaffirmed previous fiscal 2022 guidance. The stock traded down by about 1.7%, 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 5.8% Friday morning.
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, Otis Worldwide) and earnings reports due out Tuesday morning from four companies (ADM, Corning, D.R. Horton, PepsiCo).
Here is a look at what to expect from four more companies also reporting results Tuesday morning.
General Electric
Over the past 12 months, shares of General Electric Co. (NYSE: GE) have slipped by nearly 12%. They dipped to their 52-week low in early March. Last November, the company said it would spin off its health care and energy businesses into separate companies and become primarily an aviation company.
The health care spinoff is expected early next year and the energy spinoff a year later. That means that by mid-2024, what remains of GE will be worth less, probably a lot less. The payoff for investors in shares of the new companies will help salve the wounds, but there is no compelling reason to hold on to the stock in the meantime.
Analysts remain bullish on GE stock. There are 15 Buy or Strong Buy ratings on the stock, along with six Hold ratings, among the 21 brokerages covering the stock. At a recent share price of around $90.60, the potential upside to a median price target of $117.00 is about 29%. At the high target of $133.00, the upside potential is about 47%.
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First-quarter revenue is forecast at $16.94 billion, which would be down 16.6% sequentially and about 1.0% lower year over year. Adjusted earnings per share (EPS) are forecast at $0.20, down 78.6% sequentially and 16.7% year over year. For the full 2022 fiscal year, analysts currently expect GE to report EPS of $3.27, up nearly 55%, on sales of $77.64 billion, or 4.6% higher.
GE stock trades at 27.7 times expected 2022 EPS, 16.7 times estimated 2023 earnings of $5.43 and 13.6 times estimated 2024 earnings of $6.66 per share. The stock’s 52-week range is $85.29 to $116.17 (split-adjusted), and GE pays an annual dividend of $0.32 (yield of 0.35%). Total shareholder return for the past 12 months was negative 14.5%.
Raytheon
Defense contractor Raytheon Technologies Corp. (NYSE: RTX) has seen its share price increase by about 32% over the past 12 months. The stock posted an all-time high earlier this week.
The company was the second-largest federal contractor in 2020, with $28.2 billion in committed dollars (4.95% of all federal contract spending), and the second-largest defense contractor, with $27.4 billion in obligated dollars (7.47% of all defense dollars). The $800 billion U.S. defense budget is a factor, of course, but so is expected demand for the company’s products and services as more countries prepare to mount potential defenses against threats like the invasion currently decimating Ukraine.
Of 21 analysts covering the stock, 16 have given the shares a Buy or Strong Buy rating, and the other five rate the stock at Hold. At a share price of around $101.20, the upside potential based on a median price target of $111.00 is 9.9%. At the high price target of $125, the upside potential is 24.5%.
Analysts expect Raytheon to report first-quarter revenue of $15.83 billion, down 7.1% sequentially but up 3.8% year over year. Adjusted EPS are expected to reach $1.02, down 5.3% sequentially and up by 13.3% year over year. For the full 2022 fiscal year, EPS are currently pegged at $4.81, up 12.6%, on revenue of $69.03, up 7.2%.
Raytheon stock trades at 21.1 times expected 2022 EPS, 17.6 times estimated 2023 earnings of $5.78 and 15.4 times estimated 2024 earnings of $6.62 per share. The stock’s 52-week range is $78.55 to $106.02. Raytheon pays an annual dividend of $2.00 (yield of 2.01%). Total shareholder return over the past 12 months was 32.1%.
UPS
Shares of United Parcel Service Inc. (NYSE: UPS) have added about 8% over the past 12 months, including a drop of more than 18% since posting a 52-week high in early February. The company got a new deep-pocketed rival earlier this week when Amazon announced that it would allow its third-party sellers to partake in the e-commerce giant’s Prime delivery service. Amazon will be able to use its own network of shipping resources and keep the money instead of having to share it with UPS or FedEx. Investors have sprinted for the exits.
Analysts remain mostly bullish on the stock, with 16 of 30 giving the shares a Buy or Strong Buy rating and 13 others rating the stock at Hold. At a price of around $188.00 a share, the upside potential based on a median price target of $240.00 is 27.7%. At the high price target of $275.00, the upside potential is 46.3%.
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Analysts expect UPS to report first-quarter revenue of $23.8 billion, down 14.3% sequentially and up about 3.9% year over year. Adjusted EPS are pegged at $2.88, down 19.8% sequentially but 3.9% higher year over year. For full fiscal 2022, analysts are currently looking for EPS of $12.88, up 6.2%, on sales of $101.84 billion, up 4.7%. The full-year estimates have been sharply reduced since UPS reported fourth-quarter results in January.
UPS stock trades at 14.7 times expected 2022 EPS, 14.1 times estimated 2023 earnings of $13.36 and 13.8 times estimated 2024 earnings of $13.67 per share. The stock’s 52-week range is $174.70 to $233.72. UPS pays an annual dividend of $4.08 (yield of 3.23%). Total shareholder return for the past 12 months was about 8.5%.
Valero
Oil refiner and product marketer Valero Energy Corp. (NYSE: VLO) has seen its share price increase by nearly 59% over the past 12 months, all of it since December 1. Valero purchased 6.85 million barrels of crude from the federal government’s second emergency sale of oil from the nation’s Strategic Petroleum Reserve. Deliveries of the oil are set to proceed between May and July. Valero’s purchase represents just over two days of the company’s daily throughput volume.
Of the 18 analysts covering the stock, 16 have rated the shares as a Buy or Strong Buy and one has a Hold rating. At a share price of around $105.25, the upside potential based on a median price target of $107.00 is 1.7%. At the high price target of $140.00, the upside potential is around 32.5%.
Analysts are forecasting adjusted EPS of $1.64 for the March quarter on revenue of $33.04 billion. The EPS forecast is about 8% lower sequentially and up from a loss per share of $1.73 in the year-ago quarter. Revenue is forecast down 33.5% sequentially and up 59.0% year over year. For the full 2022 fiscal year, current estimates call for EPS of $9.08, up 223%, on revenue of $148.3 billion, up 30.1%.
Valero stock trades at 11.6 times expected 2022 EPS, 13.2 times estimated 2023 earnings of $7.96 and 12.8 times estimated 2024 earnings of $8.20 per share. The stock’s 52-week range is $58.85 to $111.52. The company pays an annual dividend of $3.92 (yield of 3.73%). Total shareholder return for the past 12 months was about 61.4%.
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