Earnings Previews: American Express, Cleveland-Cliffs, Intel, Schlumberger

Intel

Since last October, shares of Intel Corp. (NASDAQ: INTC) dropped by 20%, rose by 56% and fell again by about 18%. All that sums to a 12-month share-price gain of 4.6% for the Dow stock. Intel will report quarterly results late on Thursday.

Following last week’s announcements of new Apple laptops that use Apple’s own silicon and not, as in the past, Intel’s, CEO Pat Gelsinger said he “would hope to win back this piece of [Apple’s] business, as well as many other pieces of business, over time.” Let’s just say Gelsinger will have plenty to keep himself busy. Intel is being hounded on all sides, by the likes of Taiwan Semiconductor, AMD, Nvidia and even a potential IPO from GlobalFoundries.

Analysts give Intel a lot of coverage. While that coverage leans toward the positive side, 17 of 43 brokerages rate the stock a Hold. There are more Strong Sell ratings (seven) than Strong Buy ratings (six), but Buy ratings outnumber Sells by 10 to 3. At a price of around $55.20, the implied upside based on a median price target of $60 is about 8.9%. At the high target of $90, the implied upside is 63%.

Third-quarter revenue is forecast at $18.27 billion, down 1.4% sequentially and down less than 1% year over year. Adjusted EPS are forecast at $1.11, down 13.1% sequentially and flat year over year. For fiscal 2021, Intel is expected to report EPS of $4.79, down 9.7%, on sales of $73.75 billion, down about 5.3%.

Intel stock trades at 11.4 times expected 2021 EPS, 12.3 times estimated 2022 earnings and 11.8 times estimated 2023 earnings. The stock’s 52-week range is $43.61 to $68.49. Intel pays an annual dividend of $1.39 (yield of 2.55%).

Schlumberger

The largest U.S.-based oilfield services company, Schlumberger Ltd. (NYSE: SLB), is set to report earnings before markets open for trading on Friday. Over the past 12 months, the company’s stock price has increased by 132%, even more than competitors Baker Hughes (up 112%) and Halliburton (up 116%).

Schlumberger’s share price peaked in early June only to drop by nearly 28% in mid-August. The stock still trades about 5% below the June peak while both Baker Hughes and Halliburton have posted gains since June of about 5% and 6%, respectively. A recent engineering, procurement, construction and installation contract award from Turkish Petroleum has lit a fire under the shares.

Analysts remain bullish on the company. Of 30 brokerages covering the stock, 25 have a Buy or Strong Buy rating on the shares. The other five rate the stock at Hold. At a price of around $34.30, the implied upside based on a median price target of $37 is 7.3%. At the high target of $47, the upside potential is 37%.

Third-quarter revenue is forecast at $5.94 billion, up 5.5% sequentially and almost 13% year over year. Adjusted EPS are forecast at $0.36, up 19% sequentially and 80% year over year. For the full year, analysts are expecting Schlumberger to post EPS of $1.27, up almost 87% on sales of $22.98 billion, down 2.6%.

Schlumberger shares trade at 26.9 times expected 2021 EPS, 18.7 times estimated 2022 earnings and 14.3 times estimated 2023 earnings. The stock’s 52-week range is $13.70 to$36.87, and the company pays an annual dividend of $0.50 (yield of 1.45%).

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