Investing

Earnings Previews: General Electric, Tesla, UPS

A new week gets off to a big start as we approach the peak of the March quarter earnings reporting season. Some notable reports out early Friday that beat estimates were American Express (although it missed revenue estimates), Honeywell and oilfield services company Schlumberger.

There are no significant reports due Friday afternoon. Before markets open Monday, Albertsons and Otis Worldwide are scheduled to report results.

After the closing bell on Monday, we’ll hear from electric vehicle maker Tesla while Tuesday morning tees up two reports worth noting (and many more, to be honest).

Tesla

Tesla Inc. (NASDAQ: TSLA) posts its first-quarter financial results late Monday. The electric vehicle maker already has reported that it made 184,800 deliveries in the quarter. In 2020, Tesla stock added more than 740% to its share price, but the enthusiasm has cooled this year, with shares up a mere 4% so far in 2021.

Only eight of 23 ratings on the stock recommend a Buy or Strong Buy, with eight rating the stock a Hold and seven with Underperform or Sell ratings. The consensus price target on the stock is $650.81, and it trades about 12% higher than that currently, at around $731.50.

Analysts are looking for earnings per share (EPS) of $0.79 on revenue of $10.29 billion, increases of about 243% in EPS and 72% in revenue. Estimated EPS for the 2021 fiscal year is $4.31, or 92% higher year over year, and revenue of $49.2 billion, a gain of 56%.

Tesla’s stock trades at 172.3 times expected 2021 EPS, 112.5 times estimated 2022 earnings and 90 times estimated 2023 earnings. The stock’s 52-week range is $136.61 to $900.40, and Tesla does not pay a dividend.

General Electric

Over the past 12 months, General Electric Co. (NYSE: GE) stock has more than doubled. Virtually all of that gain is based on GE’s positive free cash flow in the fourth quarter, a year ahead of schedule, and an expectation for even more this year. The company’s Industrial segment is not expected to equal top-line results either year over year or sequentially.

Of 17 brokerages covering GE, just seven rate the stock a Buy or Strong Buy, and another six rate it at Hold. The consensus price target is $14.27, implying upside potential of around 5.6% at a current price of around $13.50. At the high target of $18, GE’s upside potential reaches 33%.

Analysts have forecast first-quarter EPS of $0.01, down 80% year over year, on sales of $17.52 billion, down 14.7%. Full-year estimates call for EPS of $0.24 (way up from year-ago full-year EPS of $0.01) on sales of $78.33 billion, down about 1.6%.

GE stock trades at 57.2 times, 26.5 times and 18.1 times estimated EPS in 2021, 2022 and 2023, respectively. The 52-week trading range is $5.48 to $14.42, and GE pays an annual dividend of $0.04 (yield of 0.03%).

UPS

Like GE, United Parcel Service Inc. (NYSE: UPS), reports first-quarter results first thing on Tuesday. The shares added nearly 50% last year as pandemic lockdowns drove up demand for home delivery services. Over the past 12 months, the stock is up almost 90%, but it has cooled off since the beginning of the year to a gain of around 7.5% for 2021.

Analysts have adopted a wait-and-see approach to UPS stock, with 19 of 26 putting a Hold rating on the shares. Just six rate the stock a Buy or Strong Buy. Shares currently trade at around $180, slightly above the $177.90 consensus price target. At the high target of $215, upside potential is around 19%.

The consensus EPS estimate for the quarter is $1.72, up 38% compared with the same period a year ago. Revenue is expected to rise by 13.6% year over year to $20.49 billion. Full-year estimates call for EPS of $8.91 and sales of $87.61 billion, up by 8.3% and 3.5%, respectively.

UPS stock trades at 20.2 times expected 2021 EPS, 18.7 times estimated 2022 earnings and 17.7 times estimated 2023 earnings. Shares have changed hands at between $88.85 and $181.19 apiece in the past year, and the company pays an annual dividend of $4.08 (yield of 2.3%).