Earnings Previews: Altria, Comcast, McDonald's, Southwest Airlines

Investing

Published: January 25, 2022 1:26 pm

Tuesday morning trading, it appears to be the latter. IBM got a nice bump after reporting a beat on both the top and bottom lines, and the stock traded up by around 2.7% shortly before noon on Tuesday. Steel Dynamics also scored a twin beat, but the stock traded down by 2.2%, even though guidance was strong.

As for companies that reported before markets opened Tuesday, American Express beat both profit and revenue estimates and traded higher by about 9.2%. GE beat on profits but missed on revenue and issued disappointing guidance. The stock got hammered and traded down about 6.5% Tuesday morning.

We already have previewed four more also scheduled to report results after Tuesday’s closing bell (Capital One, Microsoft, Navient and Texas Instruments) and four more reporting before the opening bell on Wednesday (Abbott Labs, AT&T, Boeing and Freeport-McMoRan). Earlier in the morning, we previewed four companies reporting results after markets close on Wednesday (Intel, Lam Research, Las Vegas Sands and Tesla).

Here is a look at four firms scheduled to report results first thing Thursday morning.

Altria

The maker and distributor of Marlboro cigarettes, Altria Group Inc. (NYSE: MO) has added about 27% to its share price over the past 12 months. The stock dropped sharply between September and late November but has risen by about 18% since then. Cigarettes are both inflation-proof and high dividend payers. Sad, perhaps, but true.

Sentiment on the company is positive, but not strong. Twelve of 18 analysts have put a Hold rating on the stock while the other six have rated the shares a Buy or Strong Buy. At a recent price of around $49.40 per share, the upside potential based on a median price target of $51.50 is about 4.3%. At the high price target of $68, the upside potential is nearly 37.7%.

Fourth-quarter revenue is forecast at $5.0 billion, down 9.6% sequentially and down 1% year over year. Adjusted earnings per share (EPS) are forecast to come in at $1.08, down 11.2% sequentially and up about 10% year over year. For the full 2021 fiscal year, Altria is expected to report EPS of $4.61, up about 5.7%, on sales of $21.04 billion, up 1%.

Altria stock trades at about 10.7 times expected 2021 EPS, 10.2 times estimated 2022 earnings of $4.84 and 9.6 times estimated 2023 earnings of $5.37 per share. The stock’s 52-week range is $40.46 to $52.59, and Altria pays an annual dividend of $3.60 (yield of 7.21%). Total shareholder return over the past year is 26.5%.

Comcast

Since early September, Comcast Corp. (NASDAQ: CMCSA) has seen its share price fall by nearly 20%. The good news is that’s better than Disney or ViacomCBS. Shares got a little boost on Monday following an upgrade from RBC Capital from Sector Perform to Outperform while maintaining a price target of $60. Free cash flow fell by about $1.3 billion sequentially in the third quarter. Not a good signal to investors.

Analysts are decidedly bullish on the stock, with 29 of 36 giving the shares a Buy or Strong Buy rating and another six have given the stock a Hold rating. At a share price of around $49.10, the upside potential based on a median price target of $62.50 is 27.3%. At the high price target of $75, the upside potential is 52.7%.

Fourth-quarter revenue is forecast to come in at $29.64 billion, down 2.2% sequentially and up 6.9% year over year. Adjusted earnings per share (EPS) are forecast at $0.74, down 15.3% sequentially and up 32% year over year. For the full 2021 fiscal year, analysts are expecting Comcast to report EPS of $3.20, up 22.4%, on sales of $115.67, up 11.7%.

Comcast stock trades at about 15.3 times expected 2021 EPS, 13.2 times estimated 2022 earnings of $3.7, and 11.7 times estimated 2023 earnings of $4.20 per share. The stock’s 52-week range is $46.29 to $61.80. Comcast pays an annual dividend of $1.00 (yield of 2.00%). Total shareholder return over the past year is 1.9%