The September-quarter earnings season continues to pick up speed as the week comes to a close. Among key earnings reports due Thursday are two large caps, along with a heavily traded transportation stock.

Tuesday Morning’s Reports

Before U.S. markets opened on Tuesday, Albertsons reported better-than-expected adjusted earnings per share (EPS) while missing slightly on revenue. Shares traded up 0.2% about half an hour before noon in New York.

Bank of America reported EPS of more than 8% above the consensus estimate and revenue up 2.8% year over year. A jump in trading revenue was partially offset by a rise of 3.5% in non-interest expenses. Shares basically flat on Tuesday morning.

Goldman Sachs also topped consensus estimates on the top and bottom lines. Revenue was down by 1.3% year over year, and EPS was down nearly 34%. The stock traded down by about 1%.

Johnson & Johnson reported EPS and revenue above consensus estimates as well. Revenue was down 10.3% compared to the third quarter of last year, but EPS was up 4.3%. Shares traded down 0.9%

Lockheed Martin beat top-line and bottom-line estimates, added $6 billion to its share buyback program and boosted its quarterly dividend payment by $0.15 per share. The stock traded up 1%.

On Deck

After markets close Tuesday afternoon, J.B. Hunt, Omnicom and United Airlines will report results. The following morning, these companies will report quarterly results: ASML, Elevance Health, Morgan Stanley and Procter & Gamble. Look for Kinder Morgan, Netflix and Tesla to report quarterly results later on Wednesday.

Here is a look at three earnings reports on the calendar for Thursday morning.

American Airlines

Over the past 12 months, American Airlines Group Inc. (NASDAQ: AAL) has seen its share price drop by about 9%. The stock is down by a third in just the past three months.

American recently raised its third-quarter fuel cost guidance from a range of $2.55 to $2.65 a gallon to $2.90 to $3.00. That is a hike of around 10%. American’s profit may fall by more than 75% as a result, while revenue remains essentially flat. Ticket prices are currently falling, putting more pressure on profitability. How American plans to navigate the second half of the year will be the most important part of its earnings report.

Analysts remain cautious on the stock. Of 21 brokerages covering it, 14 have a Hold rating and just four have Buy or Strong Buy ratings. At a recent price of around $12.00 a share, the implied upside based on a median price target of $15.00 is 25%. At the high target of $29.00, the upside potential is 141.7%.

Third-quarter revenue is forecast at $13.54 billion, which would be down 3.7% sequentially but up 0.6% year over year. American is expected to post adjusted EPS of $0.26, down sequentially from $1.92, as well as down 63% year over year. For the full 2023 fiscal year, analysts expect the company to post EPS of $2.36, up from $0.50 in 2022, on revenue of $52.85 billion, up 7.9%.

The stock trades at 5.1 times expected 2023 earnings, 5.0 times estimated 2024 earnings of $2.40 and 3.2 times estimated 2025 earnings of $3.78 per share. The 52-week trading range is $11.68 to $19.08. American does not pay a dividend. The company’s total return for the past 12 months was negative 9.04%.

AT&T

Shares of AT&T Inc. (NYSE: T) have dropped by 3.5% over the past 12 months, including a decline of more than 21% in 2023.

In a recent report on 5G speeds, T-Mobile posted download speeds more than double that of either AT&T or Verizon. How AT&T will manage to juggle net debt of $159 billion and its massive dividend payments is the main thing investors want to hear about. Between debt repayments totaling $19.3 billion over the past 12 months and cash dividends totaling $8.1 billion, AT&T depends on operating cash flow of more than $36 billion. Does it have the formula?

Sentiment on the stock remains cautious. Of 28 brokerages covering it, 12 have a Buy or Strong Buy rating, while 14 have Hold ratings. At a share price of around $14.50, the implied upside based on a median price target of $18.50 is 27.6%. At the high price target of $28.00, the upside potential is about 93.1%.

Third-quarter revenue is forecast at $30.42 billion, up 1.1% sequentially and by 0.7% year over year. Adjusted EPS are forecast at $0.62, down 1.4% sequentially and 8.8% lower year over year. For the full 2023 fiscal year, EPS are expected to come in at $2.43, down 5.5%, on sales of $121.75 billion, up about 0.8%.

AT&T stock trades at 6.0 times expected 2023 EPS, 5.8 times estimated 2024 earnings of $2.49 and 5.8 times estimated 2025 earnings of $2.52. Its 52-week range is $13.43 to $22.84. AT&T’s current annual dividend is $1.11 (yield of 7.66%). Total shareholder return for the past 12 months was 0.96%.

Freeport-McMoRan

Over the past 12 months, shares of copper and gold miner Freeport-McMoRan Inc. (NYSE: FCX) have jumped by almost 32%. For the year to date, however, shares have dropped 4.2%.

Copper, Freeport’s key revenue producer, trades down by more than 16% since late January and remains down by about a third from a recent high of nearly $5.00 posted in February of last year. Gold prices are down more than 6% since their 12-month peak in early May. The world’s central banks purchased a record amount of gold in the first half of 2023, and overall demand for gold remains well ahead of available supply.

Of 19 analysts covering the stock, 11 have a Buy or Strong Buy rating and the others have Hold ratings. At a share price of around $36.50, the implied upside to a median price target of $46.85 is about 28.4%. At the high price target of $57.00, the upside potential reaches 56.2%.

Third-quarter revenue is forecast at $5.5 billion, down 4.2% sequentially and up 10.0% year over year. Adjusted EPS are forecast at $0.34, down 2.4% sequentially and up 30.8% year over year. For the full 2023 fiscal year, analysts forecast EPS of $1.66, down 31.8%, on sales of $22.95 billion, up 0.8%.

Freeport stock trades at 21.9 times expected 2023 EPS, 16.7 times estimated 2024 earnings of $2.19, and 12.4 times estimated 2025 earnings of $2.95. The 52-week trading range is $27.82 to $46.73. The company pays an annual dividend of $0.60 (yield of 1.64%). Total shareholder return for the past 12 months was 28.65%.

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