Investing

Earnings Previews: Caterpillar, Chevron, Honeywell, US Steel, Visa

This week’s blizzard of earnings continues Thursday and Friday with four Dow Jones industrial average components reporting results, along with one other industrial giant.

U.S. Steel

U.S. Steel Corp. (NYSE: X) is expected to report fourth-quarter results after Thursday’s closing bell. The stock gained nearly 48% last year, all of it in the final five weeks. At one point, shares had gained more than 70% before falling back. The lift followed the confirmation that Biden had defeated Trump in the presidential election and rising hopes for a Biden infrastructure program that would have raised the demand for steel.

Commodity steel prices added about 18% last year, and earlier this month U.S. Steel closed its 2017 acquisition of Arkansas-based Big River Steel with a cash payment of $774 million.

For the fourth quarter, analysts are forecasting a loss per share of $0.68 (four cents worse year over year) on revenue of $2.587 billion (down about 8.6%). For the fiscal year, U.S. Steel is expected to post a net loss per share of $5.19, compared with earnings of $0.09 per share in 2019. Full-year revenue is forecast at $9.76 billion (down nearly 25%).

The stock traded Wednesday near $18, well above the consensus price target of $14.09. The steelmaker pays an annual dividend of $0.04 (yield of 0.22%).

Visa

Also scheduled to report Thursday afternoon is Visa Inc. (NYSE: V). The financial services giant earlier this month gave up on its $5.3 billion attempt to acquire fintech firm Plaid, citing an antitrust lawsuit filed by the U.S. Department of Justice that complicated the deal and would have taken “substantial time to fully resolve.”

Visa’s stock fell by nearly 30% last March as lockdowns kept people from spending. Shares worked their way to a gain of 17% for last year, mainly once the Justice Department announced its intention to kill the deal for Plaid.

Analysts have forecast first fiscal quarter earnings per share (EPS) of $1.28, a drop of 12% year over year, and revenue of $5.52 billion, down 8.8%. For the 2021 fiscal year ending in September, analysts have forecast EPS of $5.44 and revenue of $23.3 billion. Those estimates represent an improvement of about 8% in EPS and 6.6% in revenue compared to fiscal year 2020.

At a recent trading price of around $197 per share, the stock trades at about 31 times expected 2021 EPS and 25 times 2022’s estimated earnings. The consensus 12-month price target on the stock is $238.57. Visa pays an annual dividend of $1.28 (yield of 0.63%).

Chevron

Chevron Corp. (NYSE: CVX) is set to report quarterly and full-year results before markets open Friday morning. The oil giant put up the third-worst performance of 2020 among all Dow 30 stocks, losing more than 26% of its market value in 2020. Had rival Exxon Mobil remained among the Dow stocks, it would have outpaced Boeing as the index’s biggest loser of the year. That’s how bad 2020 was for the energy sector.