The three major U.S. equity indexes closed just barely mixed on Wednesday after a choppy trading session that reached a daily high at around noon and then spent the afternoon sagging. The Dow Jones industrials ended the day up 0.01%, the S&P 500 closed 0.74% lower and the Nasdaq fell by 2.04%. Six of 11 sectors closed higher, led by energy (1.36%) and health care (1.12%). Communications services and tech lagged (down 4.75% and 2.23%, respectively).
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The advance estimate (first of three) on third-quarter gross domestic product is due before markets open on Thursday. Economists’ consensus estimate calls for a year-over-year increase of 2.3%. On Friday, the monthly report on personal consumption expenditures (PCE) will be released before U.S. markets open. Income is expected to rise by 0.3%, and core PCE inflation is forecast to rise by 0.4%. Both estimates match August readings.

The three major indexes traded mixed again in Thursday’s premarket. The Dow was up 0.57%, while the S&P 500 and the Nasdaq traded lower by 0.16% and 0.67%, respectively.

After U.S. markets closed Wednesday, Meta Platforms missed the consensus adjusted earnings per share (EPS) estimate and beat on revenue. Large advertisers are spending less while smaller ones have been more consistent. The ad slowdown, combined with capital spending, did not please investors, who took the shares down by about 24% in Thursday’s premarket.

EQT also missed the consensus EPS estimate, and shares traded down about 4.5% early Thursday.

Antero Resources missed on EPS and beat the consensus revenue estimate. Shares traded down by almost 1% early Thursday.

Ford broke even for the quarter on slightly better-than-expected revenue. In its outlook statement, the company guided EBIT at the low end of its prior range and raised adjusted free cash flow guidance sharply from a range of $5.5 billion to $6.5 billion to a new range of $9.5 billion to $10 billion. Shares traded down about 1.8% Thursday morning.

Before markets opened on Thursday, Caterpillar beat estimates on both the top and bottom lines. Sales rose 19% year over year in the quarter, and profit margins are growing again. Shares traded up about 4.9% in Thursday’s premarket.

McDonald’s also beat both top-line and bottom-line estimates. Same-store sales were up 9.1% globally and 6.1% in the United States. The stock traded about 2.3% higher early Thursday.

Altria missed estimates on both the top and bottom lines and issued in-line guidance for the full fiscal year. Shares traded down about 2.2%.

Cameco beat estimates for EPS and revenue. Shares traded up by about 3.4% in Thursday’s premarket.

After markets close on Thursday, Amazon, Apple, Intel, T-Mobile and U.S. Steel will be reporting quarterly results. Look for Chevron, Exxon Mobil and NextEra Energy to report quarterly earnings Friday morning.
Here is a preview of what analysts are expecting to hear Monday morning from these two companies.
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Alliance Resource Partners

Shares of coal producer Alliance Resource Partners L.P. (NASDAQ: ARLP) have increased more than 87% in the past 12 months. For the year to date, the shares are up more than 97%. Demand for coal is expected to rise to 8 billion metric tons this year, matching a record high posted in 2013. High natural gas prices and economic growth in India have driven demand while slower economic growth in China has acted as a brake on prices. The International Energy Agency (IEA) expects demand for coal to rise in 2023.

Alliance receives virtually no analyst coverage. Two analysts have given the stock a Buy rating, with a median price target of $28.00. At a recent price of around $23.60 a share, the implied upside is 18.6%.

For the third quarter, Alliance is expected to post sales of $670.77 million, which would be up 8.8% sequentially and almost 50% year over year. Adjusted EPS are forecast at $1.54, up nearly 25% sequentially and by 250% year over year. Full-year EPS are forecast at $4.78, an increase of more than 250%, and revenue for the year is estimated to rise by about 55.4% to $2.44 billion.

Alliance stock trades at about 4.9 times expected 2022 EPS, 3.7 times estimated 2023 earnings of $6.36 and 3.2 times estimated 2024 earnings of $7.46 per share. The stock’s 52-week trading range is $9.66 to $27.63. Alliance pays an annual dividend of $1.60 (yield of 6.79%). Total shareholder return for the past 12 months was 101.7%.

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ON Semiconductor

Since posting an all-time high share price in late August, ON Semiconductor Corp. (NASDAQ: ON) has seen its share price drop by more than 24%, before recovering more than 17% over the past 10 days. The bounciness adds up to a 12-month share price gain of about 47% and flat performance for the year to date. ON Semi’s products are sold into industrial end-user markets like automakers, markets that are expected to outperform the consumer markets for personal computers, smartphones and other gadgets in the near term.

Of the 29 analysts covering the stock, 21 have a Buy or Strong Buy rating. The other eight rate the shares a Hold. At a share price of around $67.70, the implied share price gain based on a median price target of $75.00 is 10.8%. At the high price target of $90.00, the implied gain is 32.9%.

Third-quarter revenue is forecast at $2.12 billion, up 1.5% sequentially and 21.8% higher year over year. Adjusted EPS are forecast at $1.31, down 2% sequentially but up 50.6% year over year. For the full 2022 fiscal year, analysts have estimated EPS of $5.12, up 73.7%, on a sales jump of 22.1% to $8.23 billion.

ON Semi’s stock trades at about 13.2 times expected 2022 EPS, 13.9 times estimated 2023 earnings of $4.89 and 13.1 times estimated 2024 earnings of $5.16 per share. The stock’s 52-week range is $43.74 to $76.78. The chipmaker does not pay a dividend, and total shareholder return over the past year was 50.1%.

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