Investing

Earnings Previews: AT&T, Freeport-McMoRan, Cleveland-Cliffs, Valero Energy

Of the March quarter earnings reports released Tuesday morning, most showed better earnings than analysts were looking for. Two exceptions were Xerox and Dow 30 component Travelers.

After markets close Tuesday, we’ll hear from, among others, Netflix, Tenet Healthcare, and Intuitive Surgical. Before markets open Wednesday, Verizon, NextEra Energy, and ASML are all on tap to report results.

We’ve also previewed five more firms reporting Wednesday afternoon and Thursday morning: Lam Research, Kinder Morgan, Chipotle, Alaska Airlines, and American Airlines.

Here’s a look at four more companies reporting results before markets open Thursday morning.

AT&T

Telecom giant AT&T Inc. (NYSE: T) has moved up the ladder of dividend leaders among the S&P 500 stocks since the beginning of the year. The shares are now the fourth-highest dividend payer, up from eighth at the end of 2020. Less welcome is the dividend yield, now around 7% compared with 7.29% at the end of the year. AT&T shares dropped more than 21% last year but have added 7.6% so far in 2021, more than making up for the lower yield so far this year.

The majority of analysts rate the stock a Hold–20 of 30 ratings–with 9 having a Buy or Strong Buy rating on the shares. The consensus price target on the stock is $29.53 and shares recently traded just above that at around $29.90. At the high target of $36, upside potential on the stock reaches about 20%.

Analysts are expecting the company to report earnings per share (EPS) of $0.78 for the quarter, about 9.5% below last year’s result, on revenue of $42.4 billion, essentially flat with last year. For the full year, analysts have estimated EPS of $3.14, down 4 cents year over year, on revenue of $171.82 billion, again essentially flat with 2020 revenue.

AT&T’s stock trades at 9.5x both 2021 and 2022 estimated EPS and 9.4x estimated 2023 earnings. The stock’s 52-week range is $26.35 to $33.24 and the company pays a dividend of $2.08 (yield of 6.99%).

Freeport-McMoRan

Copper and gold miner Freeport-McMoRan Inc. (NYSE: FCX) has seen its share price rise by about 326% over the past 12 months as commodity prices for gold and copper have soared. Since January of 2019, gold futures have increased by 48% and copper prices have soared by 80% over the past 12 months. If the Biden administration gets its way with the $2.3 trillion infrastructure plan, copper prices are expected to remain high.

But counting on the political winds to be always at your back is not a sound investment policy. Most analysts rate Freeport’s stock as a Hold (17 of 23) while 7 rate the shares a Buy or Strong Buy. The consensus price target on the stock is $38.19 and shares recently traded at around $32.50, implying a potential upside of 17%. At the high target of $55, upside potential reaches 69%.

For the March quarter, analysts have a consensus EPS estimate of $0.50, far ahead of a $0.16 per-share loss a year ago. Revenue is forecast to rise by nearly 75% to $4.88 billion. For the full year, current estimates call for $2.64 in EPS and $21.15 billion in revenue.

Freeport’s stock trades at 13.4x expected 2021 earnings, 11.8x estimated 2022 EPs, and 14.1x estimated 2023 earnings. The stock’s 52-week range is $7.30 to $39.10 and the mining company pays an annual dividend of $0.30 (yield of 0.79%).