5. J.P. Morgan Chase & Co (NYSE: JPM)
> Forecast 2013 revenue: $100 billion, up 2%
> Forecast 2013 earnings: $20 billion, up 6%
> Stock price: $46.15
> Range: $30.83 – $46.49
> Market cap: $175.44 billion
J.P. Morgan Chase CEO Jamie Dimon was until recently considered the preeminent chief executive in his industry. His name was often mentioned as a possible candidate for Treasury Secretary when Tim Geithner retired. As a matter of fact, Warren Buffett said he favored Dimon for the job. But J.P. Morgan has had its share of trouble recently, and the Treasury job position went to Obama’s chief of staff, Jack Lew. The heart of J.P. Morgan’s trouble was a large trade that cost the bank more than $6 billion. It was made by London investment employee Bruno Iksil, who has been called the “London Whale” because of the magnitude of the hit to J.P. Morgan’s financials. Dimon readily admitted that poor management was the cause of the problem, which cost the bank’s chief investment officer her job and caused Dimon to replace the head of London trading operations. As a result, Dimon could lose most of his bonus for last year.
3. (tie) Microsoft Corp. (NASDAQ: MSFT)
> Forecast 2013 revenue: $80 billion, up 9%
> Forecast 2013 earnings: $24 billion, up 7%
> Stock price: $26.46
> Range: $26.26 – $32.95
> Market cap: $222.70 billion
Microsoft, once the most powerful and largest software company in the world, has fallen on hard times. Its flagship product — Windows — was recently updated. The new operating system, Windows 8, has not done well, partly because global PC sales have slowed considerably. Unfortunately for Microsoft, PC sales are not expected to improve this year, as consumers move to tablets and smartphones. Microsoft has several other challenges. Its Online Services Division, made up of its Bing search engine and MSN portal, has struggled with losses. Google Inc. (NASDAQ: GOOG) remains the dominant search engine by far, which has hurt the chances of growth for Bing. Microsoft has also had trouble gaining adoption of its mobile Windows product, which relies in large part on its partnership with handset giant Nokia Corp. (NYSE: NOK). Microsoft’s struggles have hurt it on Wall St. — its stock is down more than 20% over the past five years.
3. (tie) Chevron Corp. (NYSE: CVX)
> Forecast 2013 revenue: $260 billion, up 8%
> Forecast 2013 earnings: Flat at $24 billion
> Stock price: $110.47
> Range: $95.73 – $118.53
> Market cap: $216.21 billion
Chevron is the third largest company in the U.S., based on revenue, according to Fortune, behind only Walmart and Exxon Mobil. Like most of the other large U.S. oil and diversified energy firms, much of Chevron’s revenue comes from overseas. In the most recent quarter, Chevron’s total sales were $55.7 billion, of which $32.4 billion was pegged as “international.” Chevron recently forecast that its financial results for the final quarter of 2012 would be particularly strong. Chevron has significant operations in the natural gas sector, has gas stations under the Chevron, Texaco and Caltex brands, and has large shipping and pipeline operations. Chevron’s stock has outperformed those of most of its global peers over the past five years and has risen 20% over that period.
2. Exxon Mobil Corp. (NYSE: XOM)
> Forecast 2013 revenue: $473 billion, down 1%
> Forecast 2013 earnings: $37 billion, up 2%
> Stock price: $89.10
> Range: $77.13 – $93.67
> Market cap: $406.24 billion
Exxon Mobil is the world’s fourth largest oil company, the largest company in the U.S. based on revenue, and the second largest public corporation in the world based on market capitalization. Like most large energy companies, Exxon has made a large bet on the oil sands business, a relatively new way to produce significant amounts of crude. It also continues to increase its capacity to bring crude from deep-sea locations, and it will invest $14 billion in the Hebron fields off the coast of Newfoundland. As with most of the world’s largest energy companies, Exxon has embraced the clean energy and fuel efficiency movements. The amount Exxon said it will spend to expand its business in the next five years is staggering. In its annual “Outlook for Energy,” the company said it expects to invest $185 billion in energy projects in the period.
1. Apple Inc. (NASDAQ: AAPL)
> Forecast 2013 revenue: $191 billion, up 23%
> Forecast 2013 earnings: $46 billion, up 10%
> Stock price: $523.51
> Range: $418.66 – $705.07
> Market cap: $491.60 billion
Apple is arguably the most widely covered company by the press. More than a year after the death of co-founder and CEO Steve Jobs, Apple’s efforts to maintain its preeminence in the smartphone and tablet PC markets are under constant scrutiny. Apple’s pace of change
has been remarkable. In 2007, when the iPhone was launched, the company was a PC and portable music player company. Now, the iPhone accounts for almost half of Apple’s revenue and two-thirds of its profits. Apple’s lead has been eroded by competition from a broad array of products from other companies, led by the Samsung line of smartphones and Amazon.com Inc.’s (NASDAQ: AMZN) Kindle tablet. Apple’s strength in the app business, in which it has had a mammoth lead, is threatened by apps built for the Google Android mobile operating system. There is a great deal of talk about what Apple will do next to remain ahead of its competition in the broad computer, smartphone, tablet and online app and entertainment businesses. Speculation includes the launch of an Apple TV product and a cheaper version of the iPhone. Nervousness about Apple’s prospects have pushed its shares down by almost 15% over the past six months.
Research by Brian Zajac
Douglas A. McIntyre