Earnings Previews: Boeing, General Dynamics, Teck Resources

Investing

Published: April 25, 2022 12:16 pm

Before markets opened on Monday, Otis Worldwide beat analysts’ profit estimates while missing on expected revenue. The elevator maker also narrowed its fiscal year earnings per share (EPS) forecast range and lowered its forecast revenue range. Shares traded up about 2.2% shortly after the opening bell.

Activision Blizzard missed on EPS and revenue, but Microsoft still has the $95.00 per share offer on the table so the stock is down less than 1%. Coca-Cola beat both top-line and bottom-line estimates and left its guidance unchanged. The stock was trading up by about 1.8% in the early going Monday.

Before markets open on Tuesday, we shall hear from eight companies we already have previewed. ADM, Corning, D.R. Horton and PepsiCo were covered in one story, and GE, Raytheon, UPS and Valero in another.

Earlier in the morning, we previewed eight companies set to report results after markets close Tuesday: Enphase Energy, GM, QuantumScape and Texas Instruments are in one report, while Alphabet, Chipotle, Microsoft and Visa are in a second.

Here are three firms scheduled to report quarterly results first thing Wednesday morning.

Boeing

Since reaching a 12-month high in early June of last year, shares of Boeing Co. (NYSE: BA) are down by 31.5%. The latest bit of bad news for the Dow Jones industrials company came last Friday when Jon Ostrower reported that Boeing will focus on getting the 737 MAX 10 certified by the December 2022 deadline and put off certification for its 777X widebody until the end of 2024. The original target certification date for the 777X was 2020. Last year, that was pushed out to late 2023.

Boeing delivered 95 commercial jets in the first quarter, up from 77 in the first quarter of 2021. For the same period, rival Airbus delivered 142 this year and 125 last year.

Of 23 analysts covering the stock, 17 have a Buy or Strong Buy rating, while four rate the shares at Hold. At a recent share price of around $174.50, the implied upside based on a median price target of $249.00 is 42.7%. At the high target of $306, the implied upside is about 75.4%.

Consensus estimates call for first-quarter revenue of $16.04 billion, which would be up 8.4% sequentially and about 5.4% higher year over year. Analysts are forecasting a quarterly loss per share of $0.22, compared to a loss of $7.69 per share in the prior quarter and a loss per share of $1.53 last year. For full fiscal 2022, Boeing is expected to post EPS of $3.12, compared to last year’s loss per share of $9.44. Revenue is expected to increase by 28.2% to $79.85 billion.

Boeing stock trades at 56.0 times expected 2022 earnings, 24.7 times estimated 2023 earnings of $7.07 and 19.3 times estimated 2024 earnings of $9.06 per share. The stock’s 52-week range is $167.58 to $258.40. Boeing has suspended its dividend, and total shareholder return for the past year was negative 26.8%.

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General Dynamics

General Dynamics Corp. (NYSE: GD) is the country’s third-largest federal contractor and, in 2021, received about 39% of its revenue from its defense programs. That’s far less than top federal contractor Lockheed Martin, which received 66% of total 2021 revenue from its defense business.
Over the past 12 months, General Dynamics stock has added about 29.3% to its price, more than either Lockheed or Raytheon, the second-largest defense contractor. With demand for ground-force weapons, like tanks and hand-held missiles, on the rise, General Dynamics’ focus there is likely a plus.

Of 17 analysts covering the stock, 11 have a Buy or Strong Buy rating, and five rate the stock at Hold. At a share price of around $235.90, the upside potential based on a median price target of $272.00 is 15.3%. At the high price target of $290.00, the upside potential is 22.9%.

Analysts expect General Dynamics to report first-quarter revenue of $9.02 billion, down 12.3% sequentially and 3.9% lower year over year. Adjusted EPS are expected to reach $2.52, down 25.8% sequentially but up by 1.6% year over year. For full fiscal 2022, EPS are currently pegged at $12.09, up 4.6%, on revenue of $39.32 billion, up 2.2%.

The stock trades at 19.6 times expected 2022 EPS, 16.9 times estimated 2023 earnings of $13.97 and 15.0 times estimated 2024 earnings of $15.74 per share. The stock’s 52-week range is $182.66 to $254.99. General Dynamics pays an annual dividend of $4.76 (yield of 2.13%). Total shareholder return over the past 12 months was 29.8%.

Teck Resources

Canada-based Teck Resources Ltd. (NYSE: TECK) mines metallurgical coal used for steelmaking, copper, zinc and energy (primarily oil). Shares are up almost 62% for the past year, including a drop of nearly 20% from an 11-year high posted just last week.

That dip came on the heels of an analyst’s downgrade following the company’s revised guidance. The revisions include an increase in the average realized price per ton of coal from $131 in the first quarter of last year to $357 per ton this year. That’s a $6 per ton sequentially increase and will add $88 million to sales in the quarter. A railway strike, however, will have a negative effect on volume.

Of 24 analysts covering the stock, 18 have a Buy or Strong Buy rating, and the rest rate the stock at Hold. At a share price of around $34.70, the upside potential based on a median price target of $49.02 is 41.3%. At the high price target of $51.59, the upside potential is 48.7%.