In mid-morning trading Tuesday, the Dow Jones industrials were 0.58% lower, the S&P 500 down 0.31%, and the Nasdaq down 0.15%. The monthly consumer price index (CPI) came in as expected with an increase of 0.5% month over month, and core CPI also met an expected increase of 0.4%. Overall inflation dropped to 6.4% on a 12-month basis, an improvement over December’s 12-month inflation rate of 6.5%. All three indexes traded in the green about 45 minutes after the opening bell, before falling back.

After U.S. markets closed Monday, Palantir Technologies reported beating fourth-quarter estimates on both earnings per share (EPS) and revenue. The $0.04 per-share profit was the company’s first since coming public in September 2020. Guidance for the first quarter and the full 2023 fiscal year was a bit light, but shares traded up 10.5% shortly after Tuesday’s opening bell.
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Vornado Realty Trust reported better-than-expected profits but missed on revenue. Shares traded down 0.2% early Tuesday.

Before markets opened on Tuesday morning, Dow component Coca-Cola met analysts’ EPS estimate and beat the revenue estimate. Warren Buffett’s favorite drink also issued upside guidance. Shares traded up a fraction in the morning.

Peabody Energy hammered the consensus EPS estimate and easily beat the revenue forecast. Shares traded up 4.2%.

Cleveland-Cliffs reported results that were more or less in line with expectations, but far below the iron ore miner and steelmaker’s fourth quarter of last year. Shares traded down about 1.5%.

After markets close on Tuesday, Airbnb, Devon Energy and Livent will report quarterly earnings. Barrick Gold, Kraft Heinz and Roblox are scheduled to post their quarterly results before Wednesday’s opening bell. Look for results from Albemarle, Antero Resources, Cisco Systems and Energy Transfer later on Wednesday.

Three companies expected to report quarterly numbers first thing Thursday morning include an oil company, a data analysis firm and a media giant.

Cenovus

Canada-based Cenovus Energy Inc. (NYSE: CVE) owns all or 50% of several refineries in the United States and Canada, in addition to production assets in the oil sands region and offshore. Cenovus’s share price has risen by more than 28% over the past 12 months. But since posting a 52-week high in early June, shares have dropped by about 16.5%, including a rise of 4% since 2023 began.
Cenovus’s operating income dropped by more than 80% sequentially in the prior quarter. Revenue reached $13.9 billion in the first quarter of the year and $16.1 billion in the second quarter before falling back to $13.5 billion in the third quarter. The downward trend is expected to continue for the fourth quarter.
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Analysts are strongly bullish on the stock. Of 19 brokerages covering Cenovus, 16 have Buy or Strong Buy ratings and two more rate it at Hold. At a recent price of around $20.00 per share, the stock’s upside potential based on an average price target of $24.80 is 24%. At a high price target of $29.30, the upside potential is 46.5%.

For the fourth quarter, revenue is forecast at $10.8 billion, down 20.2% sequentially but up 11.1% year over year. Adjusted EPS are forecast at $0.45, down 13.7% sequentially and up from a year-ago loss per share of $0.20. For the full year, analysts expect EPS of $2.65, up 735.1% year over year, on sales of $53.26 billion, up more than 45%.

The stock trades at about 7.6 times expected 2022 EPS, 8.0 times estimated 2023 earnings of $2.50 and 7.3 times estimated 2024 earnings of $2.76. The stock’s 52-week trading range is $14.18 to $24.91. Cenovus pays an annual dividend of $0.34 (yield of 1.71%). Total shareholder return for the past 12 months has been 30.3%.

Datadog

Shares of data monitoring and analytics platform Datadog Inc. (NASDAQ: DDOG) have dropped by more than 48% over the past 12 months. Like most tech companies, shares are bouncing back this year, and they have added more than 15%, only a couple of percentage points better than the six-month dip in the stock’s price. An expected slowdown in IT spending for this year could hit Datadog’s revenue hard. The company’s outlook may be as important as its quarterly results to many investors.

Analysts are strongly bullish on the stock, with 25 of 33 having a Buy or Strong Buy rating and the rest rating the shares at Hold. At a price of around $84.00 a share, the upside potential based on a median price target of $105.00 is 25%. At the high price target of $144.00, the upside potential is 75%.
For the fiscal fourth quarter, Datadog is expected to post revenue of $449.34 million, up 2.9% sequentially and 37.7% higher year over year. Adjusted EPS are pegged at $0.19, down 17.7% sequentially and a penny lower year over year. For the full 2022 fiscal year, it is currently expected to report EPS of $0.91, up 89.3%, on sales of $1.65 billion, up 60.9%.
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Datadog stock trades at 92.4 times expected 2022 earnings, 73.9 times estimated 2023 earnings of $1.14 and 54.3 times estimated 2024 earnings of $1.54 per share. The stock’s 52-week range is $61.34 to $175.89 The company does not pay a dividend, and the total shareholder return for the past year was negative 49.04%.

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Paramount Global

Media giant Paramount Global (NASDAQ: PARA) has dropped more than 37% from its share price over the past 12 months. On Monday, the company fired roughly 120 employees as the Paramount+ cable network gets ready to roll out its merger with Showtime in a new package called catchily enough Paramount+ With Showtime. The company changed its name from ViacomCBS to Paramount Global almost exactly one year ago, and a 52-week high followed in late March. Since then, shares are down nearly 40%.

Analysts are losing patience with the stock. Of 28 brokerages covering the company, only seven have Buy or Strong Buy ratings, down from 13 of 28 in the prior quarter. The number of Sell or Strong Sell ratings has risen from eight to 12. At a price of almost $22.00, the shares trade above the median price target of $19.00. At the high target of $45,00, the upside potential is 104.5%.

Paramount is expected to post fourth-quarter revenue of $8.16 billion, up 18.1% sequentially and by 2.0% year over year. Adjusted EPS are forecast at $0.23, down 40.3% sequentially and down 11.5% year over year. For the full 2022 fiscal year, analysts are looking for EPS of $1.90, down 45.4% year over year, on revenue of $30.21 billion, up 5.7%.

The stock trades at 11.7 times expected 2022 EPS, 17.0 times estimated 2023 earnings of $1.30 and 11.3 times estimated 2024 earnings of $1.96 per share. Paramount’s 52-week range is $15.29 to $39.21. The company pays an annual dividend of $0.96 (yield of 4.45%). Total shareholder return for the past 12 months was negative 34.68%.

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