Earnings Previews: CSX, Kinder Morgan, Las Vegas Sands, Texas Instruments

Investing

Published: July 20, 2021 11:34 am

Last Updated: July 20, 2021 11:37 am

The second week of June-quarter earnings results has been a good one so far. Of nearly 50 companies reporting results through Tuesday morning, only three have missed per-share earnings estimates and only four have missed revenue estimates.

On Monday, we previewed three firms that are reporting quarterly results after Tuesday’s closing bell: Chipotle Mexican Grill, Netflix and United Airlines. In a separate report, we previewed five firms set to report before Wednesday’s opening bell: ASML, Coca-Cola, Harley-Davidson, Johnson & Johnson and Verizon.
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Here’s a look at four reports due out after markets close Wednesday.

CSX

Railroad operator CSX Corp. (NYSE: CSX) enjoyed a share price gain of 27% in 2020. After a bumpy start to this year, the stock has added another 2.5%. U.S. rail traffic is up more than 13% through the week ended July 10 and that has given all U.S. railroads a boost. Last month, CSX filed additional information to the U.S. Surface Transportation Board related to a proposed acquisition of a New England operator. If successful, CSX will extend its operations to 26 states, all east of the Mississippi River.

Analysts remain bullish on the stock, with 13 of 28 surveyed rating the shares a Buy or Strong Buy and seven rating the stock a Hold. At a recent trading price of around $31, upside potential to a median price target of $37 is just over 19%. At a high price target of $40, upside potential rises to 29%.

For the second quarter, analysts have forecast revenue at $2.94 billion and adjusted earnings per share (EPS) at $0.37. Compared to the prior quarter, the revenue forecast is 4.6% higher and the EPS estimate is 19% higher. Revenue is projected to increase by 31% year over year, with EPS increasing by 68%. For the full year, analysts forecast EPS of $1.46, up 22% year over year, and revenue of $11.77 billion, or 11.2% higher.

CSX stock trades at around 21.5 times expected 2021 EPS, 18.9 times estimated 2022 EPS and 17.2 times estimated 2023 earnings. The stock’s 52-week trading range is $22.69 to $34.96. The company pays an annual dividend of $0.37 (yield of 1.21%).

Kinder Morgan

Energy infrastructure company Kinder Morgan Inc. (NYSE: KMI) has seen its share price rise by nearly 25% over the past 12 months. For the year to date, the stock is up almost 31%. The company was mostly insulated against reduced demand for petroleum products. Total revenue fell by about $1.5 billion year over year in 2020, but first-quarter 2021 revenue beat the same period in 2020 by about $2.1 billion, or nearly 66%. February’s freezing weather drove demand for natural gas (and thus bidding for available capacity) through the roof. Kinder Morgan does not expect a recurrence of the windfall.

Analysts remain mixed on the stock, however. More than half (13 of 24) of them recommend holding the stock. Another seven rate the shares a Buy or Strong Buy. At a price of around $17.40, Kinder Morgan stock trades within 1% of its median price target of $18. At the high price target of $22, upside potential is 26.4%.

Second-quarter revenue is forecast at $2.88 billion, down nearly 45% sequentially, but up 12.5% year over year. Adjusted EPS is tabbed at $0.19, down about a third sequentially but two cents higher year over year. For the full year, analysts are currently forecasting EPS of $1.22 (up 39% year over year) and revenue of $14.19 billion, up more than 21%.

The stock trades at around 14.4 times expected 2021 EPS, 18.9 times estimated 2022 EPS and 17.5 times estimated 2023 earnings. Kinder Morgan’s 52-week range is $11.45 to $19.29. The company pays an annual dividend of $1.08 (yield of 6.12%).