Investing

Earnings Previews: ConocoPhillips, Honeywell, Merck

U.S. equity markets opened mixed on Tuesday. By mid-morning, the Dow Jones industrials still clung to a fractional gain, while the S&P 500 and the Nasdaq continued sinking. UPS crushed estimates when it reported results early Tuesday. Exxon Mobil, NXP Semiconductors and Sirius XM also beat both profit and revenue estimates. Pipeline operator Enterprise Products beat on revenue but missed the profit estimate.

After markets close Tuesday and before they open on Wednesday, five firms will report quarterly results: Alphabet, AMD, GM, PayPal and Starbucks. Another four companies report quarterly results first thing on Wednesday: AbbVie, Humana, Marathon Petroleum and Novartis. And we also previewed four companies set to release results after markets close on Wednesday: Meta Platforms, Qualcomm, Spotify, and T-Mobile.

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

ConocoPhillips

Over the past 12 months, shares of ConocoPhillips (NYSE: COP) have added about 136% of their value. As with both Chevron and Exxon Mobil, the rise in the share price of the country’s largest independent oil and gas producer is tied inextricably to the rising price of oil. Since late September, crude oil prices have risen by nearly 70%. Because Conoco is not saddled with refining or marketing divisions, the price of crude pushes its share price up even faster than Exxon’s (91.5%) or Chevron’s (67%).

Analysts have noticed. There are 29 brokerages covering the company, and 25 have ratings of Buy or Strong Buy on the stock. The other four rate the stock at Hold. At a recent share price of around $91.20, the upside potential based on a median price target of $95.50 is about 4.7%. At the high price target of $117, the upside potential is 28.3%.

For the fourth quarter, analysts are expecting revenue of $13.34 billion, which would be up about 14.8% sequentially and 120% higher year over year. Adjusted earnings per share (EPS) are expected to come in at $2.18, up 23.3% sequentially and far above the loss per share of $0.19 in the same period a year ago. For the full 2021 fiscal year, Conoco is expected to report EPS of $5.94, compared to last year’s loss per share of $0.97, on sales of $44.93 billion, up 133.3%.

Conoco stock trades at15.4 times expected 2021 EPS, 10.7 times estimated 2022 earnings of $8.49 and 11.9 times estimated 2023 earnings of $7.63 per share. The stock’s 52-week trading range is $40.90 to $91.40, and the high was posted Tuesday morning. The company pays an annual dividend of $1.52 (yield of 1.70%). Total shareholder return for the past 12 months was 131.4%

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