Earnings Previews: American Express, Cleveland-Cliffs, Newmont, Schlumberger, Verizon

In an analyst’s report last week, J.P. Morgan cut its rating on the stock to Neutral, citing valuation concerns and doubts about economic growth. Earlier this week, the Wall Street Journal reported that the Internal Revenue Service is investigating a dubious tax break that Amex was pitching to its clients. The lack of enthusiasm for the stock, though, appears tied most closely to the outlook for spending, with inflation continuing to threaten consumers’ buying power.

Analysts have taken a wait-and-see position on the company’s stock. Of 25 brokerages covering the firm, 12 have a Hold rating. Another 12 have a Buy or Strong Buy rating. At a recent price of around $188.30 a share, the implied gain based on a median price target of $200.00 is about 6.2%. At the high price target of $226.00, the upside potential rises to 20%.

First-quarter revenue is forecast to slip by about 4% sequentially to $11.66 billion, but that would be a jump of about 27% year over year. Adjusted earnings per share (EPS) are pegged at $2.47, up 13.1% sequentially but down about 9.9% year over year. For the full 2022 fiscal year, analysts are looking for EPS of $9.73, down 2.9%, on revenue of $50.42 billion, up nearly 19%.

The stock trades at 19.4 times expected 2022 EPS, 16.6 times estimated 2023 earnings of $11.33 and 14.5 times estimated 2024 earnings of $112.97 per share. The stock’s 52-week trading range is $140.68 to $199.55, and American Express pays an annual dividend of $1.72 (yield of 1.11%). Total shareholder return for the past 12 months was 30.9%.


Iron ore miner and steelmaker Cleveland-Cliffs Inc. (NYSE: CLF) has added about 76% to its share price over the past 12 months. Like all commodity producers, the company’s fortunes turned on the price it could get for its iron ore and, ultimately, its steel. Since late January, when the shares hit a 52-week low, the stock is up nearly 95%. Russia’s invasion of Ukraine sent steel prices soaring again, but price gains have moderated in the past couple of weeks. That trend could last for a while.

Of 10 brokerages covering the stock, five have put a Buy or Strong Buy rating and the rest rate the stock at Hold. At a share price of around $30.60, the implied gain based on a median price target of $32.00 is 4.6%. At the high price target of $46.00, the upside potential is just over 50%.

Analysts are forecasting first-quarter revenue of $5.55 billion, up 3.9% sequentially and 37% higher year over year. Adjusted EPS are forecast at $1.52, down 13.6% sequentially but up from $0.31 per share (390%) in the year-ago quarter. For full fiscal 2022, analysts expect Cliffs to report EPS of $5.61, down 3%, on sales of $22.86 billion, up more than 11.8%.

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