In Tuesday morning trading, the Dow Jones industrials were down 0.39%, the S&P 500 down 0.81% and the Nasdaq 0.99% lower.

After U.S. markets closed on Monday, First Republic Bank reported first-quarter results that wiped out a gain of more than 12% in the day’s regular trading session. Deposits dropped from $176.4 billion at the end of December to $104.5 billion at the end of March. Profits fell 33% year over year, and revenue fell by 13%. Shares traded down about 29% Tuesday morning.
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Cleveland-Cliffs beat estimates for both earnings per share (EPS) and revenue. The company said that its sales to automakers increased by 36% in the quarter, but revenue ended the period down 11.1% year over year. Even though the company expects “significant” EBITDA growth in the second quarter, investors were unconvinced. Shares traded down 2.9% early Tuesday.

Range Resources also beat estimates on both the top and bottom lines. Shares traded down 1.1%.

Before markets opened on Tuesday, General Electric beat both top-line and bottom-line consensus estimates. Revenue increased by 14.3% year over year, and the company issued in-line guidance for the full fiscal year. GE also raised the low end of its free cash flow estimate to $3.6 billion. Shares dropped about 2% in late-morning trading.

UPS missed consensus EPS and revenue estimates and issued downside guidance for fiscal 2023. The package delivery giant cut its revenue estimate from a range of $97.0 billion to $99.4 billion to $97.0 billion, well short of the consensus estimate of $98.25 billion. UPS said it expects to spend $3 billion on share buybacks this year. Shares traded down 9.2%.

GE HealthCare also beat top-line and bottom-line estimates and reaffirmed previous guidance. Shares traded down 9.4%.

General Motors beat expectations on the top and bottom lines and raised fiscal-year EPS guidance to a new range of $6.35 to $7.35. The automaker also said it expects 2025 revenue to rise to $225 billion, a compound annual growth rate of about 12%, while electric vehicle production will reach 1 million units in North America by 2025. Shares traded down 3%.

Raytheon beat top-line and bottom-line estimates and issued in-line EPS guidance for the full fiscal year. Shares traded down 1.6%.

After U.S. markets close on Tuesday, Alphabet, Enphase Energy, Microsoft, PacWest Bancorp and Visa are set to report quarterly earnings. Look for reports from Boeing, Norfolk Southern and Teck Resources the following morning.

Later on Wednesday, Antero Resources, EQT and Meta Platforms take their turns in the earnings spotlight. And then AbbVie, Altria, American Airlines and Merck are expected to share their results Thursday morning.
Here are previews of three more companies set to report early Thursday.

Caterpillar

Shares of heavy equipment maker Caterpillar Inc. (NYSE: CAT) posted a new 52-week high in late January, but the price has dropped by about 15% since then.
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The company avoided a strike by concluding a six-year contract with 7,000 workers in early March. Its $30 billion backlog is being looked at as both a blessing and a curse. On the one hand, that is about half of this year’s revenue in the bag. On the other hand, where does the other half of 2023 revenue come from now that orders have slowed? The Dow component will have to address this question when it reports results.

Of 29 brokerages covering the shares, 12 have a Hold rating, while another 12 have a Buy or Strong Buy rating. At a recent price of around $221.00 a share, the upside potential to a median price target of $255.00 is 15.4%. At the high target of $345.00, the upside potential is 56.1%.

Caterpillar is expected to report first-quarter revenue of $15.27 billion, which would be down 1.8% sequentially but up 12.4% year over year. Adjusted EPS are forecast at $3.79, down 1.8% sequentially and 30.8% higher year over year. For the full 2023 fiscal year, analysts expect EPS of $15.95, up 15.3%, on revenue of $63.63 billion, up 7.1%.

Caterpillar stock trades at 13.9 times expected 2023 EPS, 12.9 times estimated 2024 earnings of $17.17 and 11.6 times estimated 2025 earnings of $19.03. The stock’s 52-week trading range is $160.60 to $266.04. Caterpillar pays an annual dividend of $4.80 (yield of 2.15%). Total shareholder return for the past 12 months was 4.8%.

Newmont

Over the past 12 months, gold prices have increased by about 4.3%. Newmont Corp. (NYSE: NEM) has seen its share price fall by 36% over the same 12-month period.

Despite a previous rejection, Newmont earlier this month boosted its bid for Australian gold miner Newcrest to AUD$29.4 billion (about $19.65 billion). Newcrest shareholders would receive 0.4 of a Newmont share for each Newcrest share plus a special dividend payment of $1.10 per Newcrest share in cash. The offer is 16% higher than Newmont’s earlier bid and represents a premium of about 46% before Newmont’s earlier bid was revealed. If the deal goes through, it would be the third largest ever for an Australian firm and the third largest in the world so far this year.

Analysts remain cautious on Newmont stock, with 11 of 23 brokerages having Hold ratings while 11 others have Buy or Strong Buy ratings. At a share price of around $47.80, the upside potential based on a median price target of $57.36 is 20%. At the high price target of $67.00, the upside potential is 40.2%.
First-quarter revenue is forecast at $2.73 billion, down 14.8% sequentially and by 9.6% year over year. Adjusted EPS are forecast at $0.33, down 24.3% sequentially and 52.2% lower year over year. For the full 2023 fiscal year, estimates call for EPS of $2.28, up 23.1%, on sales of $12.45 billion, up 4.5%.
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Newmont stock trades at 21.0 times expected 2023 earnings, 18.0 times estimated 2024 earnings of $2.66, and 19.5 times estimated 2025 earnings of $2.45 per share. The stock’s 52-week range is $37.45 to $74.98. Newmont pays an annual dividend of $1.60 (yield of 3.34%). Total shareholder return for the past year was negative 31.22%.

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Peabody Energy

The stock price of Peabody Energy Corp. (NYSE: BTU) has not moved much over the past 12 months, currently trading down by just 1.3% from one year ago. The swings, though, have been impressive. For example, from a July 6 annual low to a 52-week high in late November, the shares gained 70%. Since then, shares have fallen by nearly a quarter. A week ago, the company announced a $1 billion share buyback plan. Coal prices have fallen by nearly 60% since September, and no buyback program Peabody can afford will fix that.

Only four brokerages cover the stock, and three of them have Buy ratings. The fourth rates the stock at Hold. At a share price of around $24.00, the upside potential based on a median price target of $31.50 is 27.1%. At the high price target of $39.00, the upside potential is 62.5%.

First-quarter revenue is forecast at $1.23 billion, down 24.6% sequentially and nearly double year over year. Adjusted EPS are pegged at $1.33, down 51.5% sequentially and 16.9% lower year over year. For the full 2023 fiscal year, consensus estimates call for EPS of $6.94, down 21.2%, on revenue of $5.16 billion, up 3.5%.

Peabody stock trades at 3.5 times expected 2023 earnings, 8.4 times estimated 2024 earnings of $2.874 and 22.1 times estimated 2025 earnings of $1.09 per share. The stock’s 52-week range is $17.42 to $32.89. The company does not pay a dividend. Total shareholder return for the past year was negative 0.47%.

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