Investing

Earnings Previews: AstraZeneca, Comcast, Merck

Three of the five largest U.S. traded companies will report June-quarter earnings after markets close Tuesday. Those would be Apple, Alphabet and Microsoft. We previewed the fourth of those companies, Facebook, earlier in the day.

We also previewed the companies reporting earnings before markets open Wednesday: Boeing, McDonald’s, Pfizer and Tilray.

Before markets open on Thursday, we shall hear from four more companies that attract substantial followings of investors and analysts.

AstraZeneca

Drugmaker AstraZeneca PLC (NYSE: AZN) has seen a relatively modest share price gain of around 5.4% over the past 12 months. For the year to date, the shares are up nearly 17%, and since January of 2020, the stock is up about 20%. The company closed its $39 billion acquisition of Alexion last week. The deal will drive an expected $6 billion to the company’s top line this year, as AstraZeneca begins its march from around $26.6 billion in 2020 revenue to $40 billion in 2025.

Just six surveyed analysts cover the drugmaker, and five of them rate the stock a Buy or Strong Buy. At a recent price of around $57.25, the implied upside on the stock at a median price target of $65.50 is 14.4%. At the high price target of $69.40, the upside potential is around 21%.

For the company’s second quarter, analysts are forecasting revenue of $7.57 billion, an increase of 3.4% sequentially and 20.5% year over year. Adjusted earnings per share (EPS) are tabbed to come in at $0.69, down by about 15.5% sequentially and down by 41.5% year over year. For the full fiscal year, the current revenue estimate is $31.75 billion, up nearly 20%, and the EPS estimate is $2.46, down by nearly 39%.

AstraZeneca stock trades at 55.4 times expected 2021 EPS, 46.0 times estimated 2022 earnings and 38.9 times estimated 2023 earnings. The stock’s 52-week trading range is $46.48 to $60.93. AstraZeneca pays an annual dividend of $1.40 (yield of 2.47%).

Comcast

Media giant Comcast Corp. (NASDAQ: CMCSA) has seen a share price increase of about 37% over the past 12 months. The year-to-date gain is a more modest 13%. All the share price increase has come since November of last year. The company’s NBCUniversal group got off to a poor start with the Tokyo Olympics, but viewership has picked up and the company is hoping for an increase in subscribers to its Peacock streaming service following the games.

Of 36 analysts covering Comcast, 30 rate the stock a Buy or Strong Buy, and another five rate the shares at Hold. At a price of around $58.40, the implied upside on the stock at a median price target of $65 is 11.3%. At the high price target of $75, the upside potential is around 28%.

Analysts are forecasting second-quarter revenue of $27.16 billion, a dip of less than 1% sequentially and an increase of 12.6% year over year. Adjusted EPS of $0.66 are anticipated. That would be down by about 12.5% sequentially and by 4.3% year over year. For the full fiscal year, the current revenue estimate is $113.24 billion, up nearly almost 9.4%, and the EPS estimate is $2.46, or 13.7% higher.

Comcast stock trades at 19.7 times expected 2021 EPS, 15.8 times estimated 2022 earnings and 14.0 times estimated 2023 earnings. Its 52-week range is $40.97 to $59.11. Comcast pays an annual dividend of $1.00 (yield of 1.71%).

Merck

Dow Jones industrial average component Merck & Co. Inc. (NYSE: MRK) has posted a share price increase of around 9.4% over the past 12 months. For 2021 to date, the stock is up 1.6%, and since bottoming out on March 23 of last year, the stock is up 27%. Over the next few years, the company’s Keytruda cancer drug may be on its way to becoming the world’s best-selling prescription drug. One research firm forecast Keytruda sales of $25 billion by 2026. That’s more than 50% of the company’s forecast revenue for all of this year.

Of 24 analysts covering the company, 18 rate the stock a Buy or Strong Buy and the other six have Hold ratings. At a price of around $77.85, the implied upside on the stock at a median price target of $96 is 23.3%. At the high price target of $107, the upside potential is around 37.4%.

For its second quarter, analysts project revenue of $11.2 billion, a dip of about 7.3% sequentially, but an increase of 3% year over year. Adjusted EPS are expected to come in at $1.35, which would be down by about 3.3% sequentially and by 1.5% year over year. For the full fiscal year, the current revenue estimate is $46.55 billion, down by 3%, and the EPS estimate is $5.61, down by 5.5%.

Merck stock trades at 13.8 times expected 2021 EPS, 12.0 times estimated 2022 earnings and 11.3 times estimated 2023 earnings. Its 52-week range is $98.44 to $83.78. Merck pays an annual dividend of $2.60 (yield of 3.37%).