In late morning trading Tuesday, the Dow Jones industrials were up 0.28%, the S&P 500 up 1.02% and the Nasdaq up 0.66%. The report on employment costs in the fourth quarter came in lower than expected. That is a good thing and helped moderate fears of a sharper-than-expected rate hike when the FOMC meeting concludes Wednesday afternoon.

After markets closed Monday, NXP Semiconductors said it fell short of the consensus earnings per share (EPS) estimate. The Dutch chipmaker beat the revenue estimate but guided current quarter sales below the consensus, although EPS guidance was in line with forecasts. Shares traded up 2.2% on Tuesday.

Before markets opened Tuesday morning, General Motors reported solid beats on both the top and bottom lines. The company issued upside fiscal 2023 guidance with a bonus of $5 billion to $7 billion in free cash flow from its automotive operations. Shares traded up by nearly 8%.

Caterpillar missed the consensus EPS estimate but posted better-than-expected revenue. Cat booked more than $1.1 billion in noncash charges in the fourth quarter and took a hit from the strong dollar. Shares traded down 3.8%.

Exxon Mobil beat the EPS estimate and revenue jumped 12.3% year over year and beat the consensus estimate for the fourth quarter by 5.7%. Production was up by about 100,000 barrels of oil equivalent per day, but lower prices for crude and natural gas cut into earnings. The stock traded up by 1.9%.

McDonald’s beat consensus top-line and bottom-line estimates on a sales jump of 5% globally (13% in constant currency). The company warned that short-term inflationary pressure is expected to continue into this year. Shares traded down 2.6% on Tuesday.

Pfizer posted a mixed quarter, beating the earnings estimate but missing on revenue. What hurt shares Tuesday morning was a downside estimate on 2023 revenue related to COVID-19 treatments. The stock traded down about 0.5%.

UPS also missed the consensus revenue estimate but beat on earnings. As with Pfizer, downside revenue guidance for 2023 was partially offset by estimated dividend payments totaling $5.4 billion and buybacks totaling $3 billion for the year. Shares traded up 3.3%.

AMD and Snap are on deck to report earnings later on Tuesday, and Altria, Enterprise Products Partners, Peloton and T-Mobile will share their results first thing Wednesday morning.

Here are previews of four companies reporting quarterly results before U.S. markets open on Thursday.

Bristol-Myers Squibb

Bristol-Myers Squibb Co. (NYSE: BMY) has added almost 11% to its share price over the past 12 months. The stock has dropped more than 6% in the past three months and is up by just 0.1% since the beginning of the year. Bristol-Myers Squibb reports results Thursday morning.
Two new immunotherapies for melanoma and metastatic non-small cell lung cancer will be heavily promoted directly to consumers through TV ads. Bristol-Myers Squibb also has agreed to settle a lawsuit by two former employees who were fired for refusing to get COVID-19 vaccinations in 2021.

Of 24 analysts covering the drugmaker, 11 have a Buy or Strong Buy rating and 12 rate the stock at Hold. At a recent share price of around $72.00, the implied upside on the stock at a median price target of $83.00 is about 15.3%. At the high price target of $95.00, the upside potential is nearly 32%.

For the company’s fiscal fourth quarter, analysts are expecting revenue of $11.2 billion, which would be a decrease of 0.15% sequentially and 6.5% year over year. Adjusted EPS are tabbed to come in at $1.73, down by 13.3% sequentially and 5.5% lower year over year. For the full 2022 fiscal year, the revenue estimate is $45.91 billion, down about 1.0%, and the EPS estimate is $7.61, up 1.3%.

Bristol-Myers stock trades at about 9.5 times expected 2022 EPS, 9.0 times estimated 2023 earnings of $7.98 and 8.8 times estimated 2024 earnings of $8.20 per share. The stock’s 52-week trading range is $62.90 to $881.44. The company pays an annual dividend of $2.28 (yield of 3.15%). Total shareholder return for the past year was 14.3%.

ConocoPhillips

Over the past 12 months, shares of ConocoPhillips (NYSE: COP) have added 35.1% to their value. That gain is about half as much as the 70% gain the shares had put up for the 12 months preceding their third-quarter earnings. Both Chevron and Exxon Mobil noted the lower price for crude oil and natural gas in the December quarter, and Conoco is highly likely to feel the same pinch. The company reports December-quarter results early Thursday.

The company has begun discussions with Venezuela’s national oil company to recover some $10 billion that Conoco had to write off when its Venezuelan assets were nationalized in 2007. Conoco is also awaiting a decision from the Biden administration that would allow the company to proceed with its $8 billion Willow project in the National Petroleum Reserve-Alaska.

There are 28 brokerages covering the company, and 22 have ratings of Buy or Strong Buy. Four rate the stock at Hold. At a share price of around $120.50, the upside potential based on a median price target of $140.00 is about 16.3%. At the high price target of $160.00, the upside potential is about 32.8%.

For the fourth quarter, analysts expect revenue of $18.16 billion, down 16.0% sequentially but up 13.8% year over year. Adjusted EPS are expected to come in at $2.90, down 19.6% sequentially and up 27.8% year over year. For the full 2022 fiscal year, Conoco is expected to report EPS of $13.60, up 126.2%, on sales of $78.8 billion, up 63%.

Conoco stock trades at 8.9 times expected 2022 EPS, 9.5 times estimated 2023 earnings of $12.66 and 11.1 times estimated 2024 earnings of $10.87 per share. The stock’s 52-week range is $78.30 to $138.49. The company pays an annual dividend of $2.37 (yield of 1.92%). Total shareholder return for the past 12 months was 41.8%.

Merck

Dow Jones industrial average component Merck & Co. Inc. (NYSE: MRK) has added about 31.1% to its stock price over the past 12 months. The pharmaceutical giant’s $37 billion pursuit of Seagen fizzled, but a new partnership with Moderna has produced a good result for treating stage 3 or 4 melanoma for a cocktail of Merck’s Keytruda cancer drug and Moderna’s mRNA-4157. If further trials are also successful, Keytruda may continue to pay off for Merck long after the company loses patent protection on the drug in 2028. Merck reports results before U.S. markets open Thursday.
Analysts have gotten more bullish on Merck stock in the past few months. Of 26 brokerages covering the company, 18 now have a Buy or Strong Buy rating and the rest have a Hold rating. At a share price of around $106.00, the implied upside on the stock is 13.2% at a consensus 12-month price target of $120.00. At the high target of $136.00, upside potential rises to 28.3%.

For the fourth quarter, Merck is expected to report sales of $13.66 billion, down 8.7% sequentially and up 1% year over year. Adjusted EPS is expected to reach $1.54, down 17% sequentially and down 14.4% year over year. For the 2022 fiscal year, EPS is forecast at $7.39, an increase of 22.8% year over year, on sales of $59.13 billion, a jump of 21.4%.

Merck stock trades at 14.3 times expected 2022 EPS, 14.4 times estimated 2023 earnings of $7.38 and 2.1 times estimated 2024 earnings of $8.75 per share. The stock’s 52-week range is $72.88 to $115.49, and the company pays an annual dividend of $2.92 (yield of 2.75%). Total return over the past 12 months was 35.35%.

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Sirius XM

Shares of satellite radio streaming service Sirius XM Holdings Inc. (NASDAQ: SIRI) have dropped about 5.2% over the past 12 months. What drives Sirius XM’s performance is self-paying consumers who received a trial period with their new car purchase and sign up to continue paying. Consumer demand for new cars has slowed and that has taken a slice out of Sirius XM’s self-pay subscriber growth. The worse news is that new car sales could fall even further this ear. Sirius XM reports quarter results first thing Thursday morning.

Of 16 brokerages covering the stock, seven have a Buy or Strong Buy rating and another five rate the shares a Hold. At a price of around $5.90 per share, the potential upside based on a median price target of $6.90 is about 17%. At the high price target of $8.25, the upside potential is 39.8%.

The consensus estimate calls for fourth-quarter revenue of $2.31 billion, up 1.5% sequentially and by 1.3% year over year. Adjusted EPS are pegged at $0.07, flat sequentially and down a penny year over year. For the full 2022 fiscal year, Sirius XM is expected to report EPS of $0.29, down about 13.4%, on revenue of $9.03 billion, up 3.8%.

Sirius XM’s stock trades at 20.1 times expected 2022 EPS, 16.7 times estimated 2023 earnings of $0.35 and 14.2 times estimated 2024 earnings of $0.41. The stock’s 52-week range is $5.69 to $6.88, and the current annual dividend is about $0.10 (yield of 1.64%). Total shareholder return for the past 12 months was 0.3%.

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