Investing

Earnings Previews: CVS, GM, Marathon, Royal Caribbean

This week will bring June-quarter results from several energy companies, along with some big health care firms, media companies and utilities. We already have previewed three stocks that will report results after markets close Monday: NXP Semiconductors, Take-Two Interactive and Transocean.

Alibaba, Nikola and Under Armour will post quarterly earnings before Tuesday’s opening bell. Earlier this morning, we previewed earnings due after Tuesday’s closing bell: Activision-Blizzard, Lyft, Occidental Petroleum and Skillz.

Here are previews of four companies set to report June-quarter results before markets open on Wednesday.

CVS Health

The country’s second-largest provider of health care plans, CVS Health Corp. (NYSE: CVS), has seen its stock price rise by more than 34% in the past 12 months. For the year to date, shares are up about 23%. The 12-month gain is about 5% below that of UnitedHealth but about 4% more year to date. Since July 1, the stock trades roughly flat, having recovered from a mid-month plunge related to the recall of a sunscreen product.

Analysts remain bullish on the stock, with 19 of 26 surveyed brokerages giving the stock a Buy or Strong Buy rating. The rest rate the shares at Hold. At a recent price of around $82.40, the stock’s upside potential based on a median price target of $95.50 is about 16%. At the high price target of $107, the implied upside is almost 30%.

The consensus revenue estimate is $70.27 billion, up 1.7% sequentially and about 7.8% year over year. Adjusted earnings per share (EPS) are forecast at $2.07, which would be three cents higher sequentially and down nearly 22% year over year. For the full year, analysts are looking for EPS of $7.67, up 2.2%, and revenue of $281.75, or about 4.9% more year over year.

The stock trades at 10.8 times expected 2021 EPS, 10.0 times estimated 2022 earnings and 9.1 times estimated 2023 earnings. The stock’s 52-week range is $55.36 to $90.61. CVS Health pays an annual dividend of $2.00 (yield of 2.43%).

General Motors

Automaker General Motors Co.’s (NYSE: GM) stock has risen by nearly 130% over the past 12 months. Growth since the beginning of 2021 is a more modest 37.2%, however. Supply chain issues are affecting all automakers, and GM has offered little to counter Ford’s or other legacy automakers’ thrusts into the electric vehicle market. The company’s Chevy Bolt faced a major recall, and the all-electric Hummer isn’t due out until fall. GM’s guidance could make a difference in how the share price behaves.

Analysts are strongly bullish on the stock, however. Of 21 brokerages covering the company, 19 rate the stock a Buy or Strong Buy, with just two assigning a rating of Hold. At the trading price of around $57, the stock upside potential based on a median price target of almost $74 is 30%. At the high price target of $90, upside potential reaches 58%.

Second-quarter revenue is forecast at $29.66 billion, a decline of around 8.7% sequentially but an increase of 136% year over year. EPS are expected to drop by nearly 18% sequentially to $1.85. In the second quarter of last year, GM posted a loss per share of $0.50. For the full year, EPS is tabbed at $6.90, a gain of nearly 41%, while revenue is expected to rise by more than 11% to $136.48 billion.

GM stock trades at 8.6 times expected 2021 EPS and 8.4 times estimated 2022 and 2023 earnings. The stock’s 52-week range is $24.82 to $64.30. GM has suspended its dividend.