Investing

Earnings Previews: AMD, AT&T, Boeing, Microsoft and Starbucks

The consensus Starbucks EPS estimate has dropped by a penny in the past week to $0.55, a year-over-year decline of 30%, while revenue is forecast to slide by 2.5% to $6.92 billion. Current estimates for the full fiscal year call for EPS of $2.81, up about 140%, and sales up 21% to $28.5 billion. At a recent trading price of around $104, shares are trading within 2% of the consensus price target and at nearly 37 times expected 2021 EPS and about 30 times expected 2022 EPS.

The consensus price target on Starbucks stock is $103.56, and the high target is $122 from analysts at Barclays. The coffee purveyor pays a dividend yield of 1.73%.

Boeing

Dow component Boeing Co. (NYSE: BA) will report fourth-quarter and full-year results that are not expected to show much improvement, even though the company’s bread-and-butter 737 Max aircraft has been cleared by aircraft regulators to return to the skies. Boeing delivered 31 of the planes in December, up from just nine in December 2019. It’s a good start, but more than 400 parked 737 Max jets remain to be delivered. Boeing plans to deliver about half this year and the rest in 2022. The company also still has to figure out what it will do next to keep from falling further behind rival Airbus.

For the fourth quarter, analysts are expecting a net loss per share of $1.80, an improvement of $0.53 per share compared to the fourth quarter of 2019. Revenue is estimated to reach $15.07 billion, down nearly 16% year over year. For the full year, Boeing is expected to report a loss of $9.73, approaching triple its loss in 2019, while revenue is forecast at $57.94 billion, down more than 24% year over year.

At around $201 per share, the stock trades nearly 16% below its price target. The company is expected to post a profit of around $2.10 a share in 2021 and the stock trades at about 96 times expected earnings. Based on estimated EPS of $7.05 in 2022, the shares traded at a multiple of nearly 29. Boeing suspended its dividend in 2019.

AT&T

AT&T Inc. (NYSE: T) saw its shares fall by more than 21% last year as the company’s WarnerMedia division suffered through the closure of U.S. movie theaters as a result of the COVID-19 pandemic. The company also has had to increase investment in building out its 5G network, promoting its new HBO Max streaming service and trying to find a buyer for satellite service DirecTV.

The big success so far appears to be HBO Max, where WarnerMedia has announced the simultaneous release of new 2021 movies for both streaming and theatrical release. Late last week, several news outlets indicated that private equity firm TPG is interested in buying at least part of DirecTV, no doubt at a significant discount to the $67 billion (including debt) that AT&T paid for the satellite service in 2016.

AT&T is expected to report EPS of $0.73 (down 18% year over year) on sales of $44.55 billion (down nearly 5%) for the fourth quarter. Full-year EPS are tabbed at $3.14, a drop of 12% compared to 2019, and revenue is expected to total nearly $171 billion, down nearly 6%.

At a current price of around $29, the implied gain at the consensus price target is about 6.8%. The high price target is a whopping $43 a share. Shares traded at around nine times expected 2020, 2021 and 2022 estimated EPS. AT&T’s major attraction may be its dividend yield of around 7.2%.

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