Investing

Earnings Previews: Caterpillar, Comcast, Linde, Sirius XM

Nearly 80 companies in our watch list reported earnings after markets closed Monday and before they opened again on Tuesday. Of those, 20 missed consensus earnings estimates and 21 missed revenue estimates.

After markets close Tuesday, we’ll hear from half a dozen companies: Alphabet, AMD, Microsoft, Robinhood, Twitter and Visa. On Wednesday morning, reports are due from four more companies we follow: Boeing, Coca-Cola, GM and McDonald’s.

We also have previewed three companies set to report results after markets close Wednesday: eBay, Ford and Teladoc.

Here’s a look at four companies scheduled to report results before markets open Thursday.

Caterpillar

After setting a new 52-week high in June, shares of heavy equipment maker Caterpillar Inc. (NYSE: CAT) have retreated 16%. For the past 12 months, the shares are up about 22.5%. The Dow Jones industrial average component has become more capital-efficient in the past few years, but an uncertain future for the construction industry in China and whatever the U.S. Congress decides to spend on infrastructure will have a lot to do with investor enthusiasm for Caterpillar stock.

Probably the best way to describe analyst sentiment for the stock is “wait and see.” Of 29 brokerages covering the shares, 15 have put a Hold rating on the stock. Another 12 rate the stock a Buy or Strong Buy. At the recent price of around $201.70, the upside potential based on a median price target of $232 is 15%. At the high target of $301, the upside potential is 49%.

Caterpillar is expected to report third-quarter revenue of $12.46 billion, which would be down 3.4% sequentially but up 26% year over year. Adjusted earnings per share (EPS) are forecast at $2.21, down 15.2% sequentially and up 65% year over year. For the full fiscal year, analysts currently expect EPS of $10.03, up 53%, on revenue of $50.17 billion, up 20%.

The stock trades at 20.0 times expected 2021 EPS, 16.5 times estimated 2022 earnings and 14.2 times estimated 2023 earnings. The stock’s 52-week range is $149.63 to $246.69. Caterpillar pays an annual dividend of $4.44 (yield of 2.21%).

Comcast

Since early September, Comcast Corp. (NASDAQ: CMCSA) has seen its share price fall by about 41%. Netflix stock has appreciated by around 55% over the same period. Comcast’s businesses continue growing, but the growth has been hampered by rising costs and other expenses. Keep an eye on free cash flow, which was down slightly in the second quarter. That will determine whether dividends or buybacks are in investors’ future.

Analysts are decidedly bullish on the stock, with 29 of 36 giving the shares a Buy or Strong Buy rating and another six having a Hold rating. At a price of around $54.30, the upside potential based on a median price target of $67 is 23.4%. At the high price target of $75, the upside potential is 38%.