The three major U.S. equity indexes closed mixed on Thursday, with the S&P 500 and the Nasdaq hammered by weak reports from tech megacaps. The Dow Jones industrials ended the day up 0.61%, the S&P 500 closed 0.61% lower and the Nasdaq fell by 1.63%. Five of 11 sectors closed higher, led by industrials (1.14%) and financials (0.75%). Communications services and tech trailed (down 4.12% and 1.25%, respectively). The real estate sector closed flat.

The monthly report on personal consumption expenditures (PCE) was released before U.S. markets open Friday morning. Income rose by 0.4%, above expectations and equal to the August reading. Spending rose 0.6%, also above expectations and equal to the August report.

All three major indexes opened higher Friday morning.

After U.S. markets closed Thursday, Amazon reported adjusted earnings per share (EPS) that beat estimates by a penny. The e-commerce behemoth missed the consensus revenue estimate by about $370 million. Amazon also issued downside revenue guidance well below the consensus estimate. Shares traded down about 10% shortly after Friday’s opening bell.

Apple reported beats on both the top and bottom lines. Quarterly services revenue was short of estimates, as were iPhone 14 sales and iPad revenue. CEO Tim Cook said the company would slow its new hiring. The stock traded up about 4.7% early Friday.

Intel beat the consensus EPS estimate but missed on revenue. Demand slowed more, and to more market sectors than expected. But the earnings number outweighed everything else, and shares traded up more than 8% Friday morning.

T-Mobile missed the revenue estimate but beat on earnings. The mobile services provider added 1.6 million net subscribers in the quarter and announced a $14 billion buyback program with $2 billion in repurchases to come by end of this year. Shares traded up about 7.5%.

U.S. Steel beat estimates on both the top and bottom lines. Shares traded down by about 3.6% early Friday.

Before markets opened Friday morning, Chevron hammered estimates on both the top and bottom lines. Higher prices for crude oil and refined products led to higher margins. No surprises there. Chevron is expected to raise its capital spending by around 20% next year to around $18 billion. Shares traded up about 1.5%.

Exxon Mobil, like Chevron, blasted consensus earnings and revenue estimates. The energy giant posted profits of nearly $20 billion, its best quarterly total ever. Exxon has no plans to boost capital spending significantly next year. Shares traded up about 1.5% Friday morning.

NextEra Energy beat both top-line and bottom-line estimates. It reaffirmed fiscal 2022 EPS guidance and issued EPS guidance for 2023. The stock traded up about 2.7% in early action Friday.

No notable earnings reports are due out Friday afternoon. Before U.S. markets open on Monday, coal miner Alliance Resources and chipmaker ON Semiconductor will report quarterly results. Look for reports from NXP Semiconductors, Sofi Technologies and Uber late Monday or early Tuesday.
Here is a preview of four more earnings reports due out Tuesday morning.

BP

Shares of integrated oil supermajor BP PLC (NYSE: BP) have performed well over the past year but trail far behind Chevron and Exxon, which are up 48% and 57%, respectively. BP’s 12-month increase was about 13.6%. BP just paid $4.1 billion to acquire a renewable gas company, another step toward the company’s stated goal of net-zero emissions from products it sells (so-called Scope 3) by 2050. In the meantime, analysts expect BP to follow Chevron and Exxon to near-record profits in the third quarter.

Of 23 brokerages covering the stock, 16 have a Buy or Strong Buy rating and seven rate the shares at Hold. At a recent price of around $33.20 a share, the implied upside to a median price target of $36.70 is 10.5%. At the high price target of $48.00, the upside potential is about 44.6%.

The consensus estimate for first-quarter revenue is $60.93 billion, which would be down 10.2% sequentially but up 68.5% year over year. Adjusted EPS are forecast at $1.89, down 27.6% sequentially and up 91.0% year over year. For the 2022 fiscal year, analysts expect BP to report EPS of $8.43, up 120%, on sales of $244.3 billion, up 55%.

The stock’s 52-week trading range is $25.33 to $34.30. BP pays an annual dividend of $1.34 (yield of 4.19%). The total shareholder return for the past year was 18.7%.

Enterprise Products

Energy pipeline operator Enterprise Products Partners LP (NYSE: EPD) has posted a share price gain of about 5.4% over the past 12 months. It is the largest oil and gas midstream (pipeline and infrastructure) company in the country, with a market cap of about $54.7 billion. The company’s payout ratio is nearly 82%, thanks in large part to its master limited partnership structure. Enterprise’s guaranteed cash flows from long-term contracts are mostly insulated from commodity price swings.

Of the 21 brokerages covering the stock, 16 have a Buy or Strong Buy rating and the other five have Hold ratings. At a share price of around $25.20, the stock trades about 23% below its consensus price target of $31.00. At the high target of $36.00, the upside potential on Enterprise stock is 42.9%.

Revenue for the September quarter is forecast at $13.82 billion, down about 14.0% sequentially and up 27.6% year over year. Adjusted EPS are forecast at $0.60, down 6.4% sequentially but 11.1% higher year over year. For the full 2022 fiscal year, analysts expect to see $2.46 in EPS, up 11.6% year over year, on sales of $56.1 billion, an increase of 37.5%.

The stock trades at about 10.2 times expected 2022 EPS, 9.7 times estimated 2023 earnings of $2.59 and 9.5 times estimated 2024 earnings of $2.65. The stock’s 52-week range is $20.42 to $28.65, and the company pays an annual distribution of $1.90 (yield of 7.53%). Total shareholder return for the past 12 months was 15.7%.

Oil refiner and marketer Marathon Petroleum Corp. (NYSE: MPC) posted an all-time high share price on Thursday and has posted a stock price gain of nearly 72% over the past year. That is a far larger increase than rival Phillips 66’s 34% gain or Valero’s gain of 63%. While margins in the company’s mid-continent refineries are not at the sky-high levels of Atlantic Coast refineries, profits are likely to continue pouring in at ever higher levels. Valero reported earlier this week that its refining margin more than doubled year over year in the third quarter.

Of 17 brokerages covering Marathon, 13 have a Buy or Strong Buy rating and the rest rate the stock at Hold. At a share price of around $113.70, the stock’s upside potential based on a median price target of $125.00 is about 9.9%. At the high target of $140.00, the upside potential is 23.1%.

Third-quarter revenue is forecast at $40.77 billion, down 24.8% sequentially but up by 25.0% year over year. Analysts are estimating EPS of $7.06, down 33.8% sequentially and a whopping 1,000% higher year over year. For the full 2022 fiscal year, the consensus estimates call for EPS of $24.00, up nearly 880%, on revenue of $171.17 billion, up 41.5%.

Marathon Petroleum’s stock trades at about 4.7 times expected 2022 EPS, 8.8 times estimated 2023 earnings of $12.91 and 12.6 times estimated 2024 earnings of $8.99 per share. The stock’s 52-week range is $59.55 to $115.72. Marathon pays an annual dividend of $2.32 (yield of 2.05%). Total shareholder return for the past 12 months was 76.7%.

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Newmont

Over the past 12 months, gold prices have declined by about 7.6%. Newmont Corp. (NYSE: NEM) has seen its share price fall by about 25.2% over the same 12-month period. Mining stocks, in general, are lower, but miners’ balance sheets are stronger because they are investing less in new projects and looking to reward shareholders with better dividends. Newmont’s free cash flow per share for the past 12 months is $3.01, more than 15% higher than its dividend payment.

Analysts remain cautious on Newmont stock, with half of 20 brokerages giving the shares a Hold rating, while nine have Buy or Strong Buy ratings. At a share price of around $43.10, the upside potential based on a median price target of $53.00 is 23%. At the high price target of $79.52, the upside potential is 84.5%.

Third-quarter revenue is forecast at $2.88 billion, down 6% sequentially and flat year over year. Adjusted EPS are forecast at $0.34, down 25.5% sequentially and down 43.3% year over year. For the full 2022 fiscal year, estimates call for EPS of $2.02, down 31.8%, on sales of $12 billion, down 1.8%.

Newmont stock trades at about 21.3 times expected 2022 earnings, 20.8 times estimated 2023 earnings of $2.07 and 18.3 times estimated 2024 earnings of $2.35 per share. The stock’s 52-week range is $40.00 to $86.37. Newmont pays an annual dividend of $2.20 (yield of 5.15%). Total shareholder return for the past year was negative 22.2%.

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