The Top 10 Earnings for the Week Ahead

Corporate earnings season is upon us, and 24/7 Wall St. has put together a preview of some of the larger reporting companies for the coming week. We have taken a review of the consensus earnings estimates, stock price and trading history, and some additional color on each. There are no major earnings scheduled for Monday due to the stock and bond markets being closed in observance of Martin Luther King Day.

IBM

International Business Machines Corp. (NYSE: IBM) is set to report fourth-quarter earnings Tuesday afternoon after the close of trading. Thomson Reuters has consensus estimates of $5.43 in earnings per share (EPS) and $24.84 billion in revenue.

IBM only just recently finally dropped its EPS of $20 goal for the end of 2015. The company has cut costs endlessly to get there. Also IBM is supposed to be one of the backlog kings. Even with that backlog of $128 billion at the end of the last quarter, that was down 7% from a year earlier, and its margin was under pressure as well. Here was our 2015 bullish and bearish outlook for IBM.

Shares were trading at $155.99 midday Friday. The stock has a consensus analyst price target of $165.38 and a 52-week trading range of $150.50 to $199.21.

Baker Hughes and Halliburton

Baker Hughes Inc. (NYSE: BHI) and Halliburton Co. (NYSE: HAL) will each report earnings Tuesday before the market open. 24/7 Wall St has not included any color on these companies as they are set to merge later in the year. The consensus estimates for Halliburton are $1.10 in EPS and $8.78 billion in revenue. Baker Hughes has consensus estimates of $1.08 in EPS on revenue of $6.41 billion.

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Netflix

Netflix Inc. (NASDAQ: NFLX) will report its fourth-quarter earnings Tuesday after the market close. Thomson Reuters has consensus estimates of $0.46 in EPS and $1.48 billion in revenue.

Netflix continues to be a top media and services play on Wall Street, and the company announced yet another expansion of its programming and reach last year across Europe. The consensus on Wall Street is that Netflix is likely to benefit from a materially stronger original content launch, which would bolster the already strong franchises like the hit political show “House of Cards.” With many consumers tired of rising cable and carrier content prices, the streaming leader may be poised for a big 2015.

Shares were at $328.20 in the middle of Friday’s trading. The consensus analyst price target is $413.42, and the 52-week trading range is $299.50 to $489.29.

Kinder Morgan

Kinder Morgan Inc. (NYSE: KMI) is set to report its fourth-quarter earnings Wednesday. Thomson Reuters has consensus estimates of $0.35 in EPS and $4.35 billion in revenue.

We would caution readers that Kinder Morgan has closed on the acquisitions of all of Kinder Morgan Energy Partners, Kinder Morgan Management and El Paso Pipeline Partners, and analysts often take more than one quarterly report to get their estimates correct. The merger plan was comprised of $40 billion in parent-company equity, $4 billion in cash and $27 billion in assumed debt. It is a move some shareholders were opposed to, but one many on Wall Street saw as a brilliant move that could reshape the industry. Kinder is among a recent defensive list of MLPs to Buy in a J.P. Morgan report.

Shares were at $41.20 midday in Friday’s trading. The stock has a consensus analyst price target of $46.71 and a 52-week trading range of $30.81 to $43.18.

eBay

eBay Inc. (NASDAQ: EBAY) will report its fourth-quarter earnings Wednesday after the market close. Thomson Reuters has consensus estimates of $0.89 in EPS and revenue of $4.94 billion.

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The company is continuing improvements in its user experience. eBay’s marketplaces keep attracting new users, as evidenced by double-digit growth in active users and items sold. Many Wall Street analysts feel the company has a decided advantage in cross-border shipping of product, something that many other retailers struggle with. While not only enjoying strong early seasonal sales numbers, eBay remains a potential buyout target with it valuable PayPal franchise.

Shares were trading at 53.59 halfway through Friday’s trading session. The stock has a consensus analyst price target of $58.16 and a 52-week trading range of $46.34 to $59.70.

Verizon

Verizon Communications Inc. (NYSE: VZ) is set to report its fourth-quarter earnings Thursday morning. Thomson Reuters has recent consensus estimates of $0.76 in earnings per share and $32.59 billion in revenue.

One of the biggest considerations for the year ahead for Verizon is the current price war with AT&T Inc. (NYSE: T), Sprint Corp. (NYSE: S) and T-Mobile US Inc. (NYSE: TMUS). The price war among these giants has put short-term pressure on earnings for Verizon’s wireless segment. It is also worth noting that defensive investors may have another advantage with Verizon, as it might be one of the best stocks to own during a market sell-off, similar to what we saw earlier in mid-October. Here is our own 2015 bullish and bearish outlook for Verizon.

Shares were at $47.66 in the middle of Friday’s trading. The consensus price target is $52.61. The 52-week trading range is $45.09 to $53.66.

Starbucks

Starbucks Corp. (NASDAQ: SBUX) is scheduled to report its earnings Thursday after the market close. Thomson Reuters has recent consensus estimates of $0.80 in EPS and $4.80 billion in revenue.

The company dominates the retail coffee business in the United States, and the international growth is helping to boost earnings. The stock has been a very uneven performer over the past year, and it is just now getting back to the trading levels of back in November of 2013. With a rapid expansion in China, and what could have been an outstanding holiday selling season, an earnings surprise could be in the cards.

Shares were at $80.06 midday in Friday’s trading. The consensus price target is $90.90, and it has a 52-week trading range of $67.93 to $84.20.

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GE

General Electric Co. (NYSE: GE) is set to report its fourth-quarter results Friday before the market open. Thomson Reuters has consensus estimates of $0.55 in EPS and $42.12 billion in revenue.

GE has a lot going for it. On top of cost controls, the aircraft boom taking place is a major win for GE. Barron’s recently included GE on its Best Income Ideas for 2015 list right at the start of 2015. However a recent issue with the company was an analyst downgrade, to Hold from Buy with the price target cut to $28 from $30 at Deutsche Bank. What will help GE out going forward is if the international economies and oil to stabilize. Here is our own 2015 bullish and bearish outlook for GE shares.

Shares were at $23.57 halfway through Friday’s trading day. The stock has a consensus analyst price target of $29.08 and a 52-week trading range of $23.41 to $27.53.

McDonald’s

McDonald’s Corp. (NYSE: MCD) will report its most recent results Friday before the market open. Thomson Reuters has recent consensus estimates of $1.23 in earnings per share and $6.71 billion in revenue.

Recently consumer behavior and preferences have not gone in favor of McDonald’s. The rise of the organic and natural foods trends has trumped the notion that a family can go eat a truly large meal at McDonald’s for very little money. What may be amazing is that McDonald’s shares have not fallen further lately despite being under such a negative cloud. Here is our own 2015 bullish and bearish outlook for McDonald’s.

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In the middle of Friday’s trading day, shares were at $91.34. The consensus analyst price target is $95.99, and the 52-week trading range is $87.62 to $103.78.

Synchrony Financial

Synchrony Financial (NYSE: SYF) is set to report its earnings Friday before the market open. Thomson Reuters has consensus estimates of $0.60 in EPS and revenue of $2.81 billion.

Synchrony has only recently come about as a spin-off from GE, and analysts are still figuring out earnings. Ahead of earnings the firm, Evercore, started Synchrony as a Buy with a $35 price target, implying an upside of 22% from current prices.

Halfway through Friday’s trading day, shares were at $28.66. The stock has a consensus price target of $30.57. Its 52-week trading range is $22.60 to $30.64.

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