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Earnings Previews: Comcast, McDonald's, Twitter

Before markets opened on Tuesday, United Parcel Service beat analysts’ profit and revenue estimates for the March quarter. UPS also reaffirmed revenue guidance of $102 billion for the 2022 fiscal year, slightly above analysts’ consensus. Shares traded down about 2.5% in the early afternoon Tuesday.

ADM beat estimates on both the top and bottom lines Tuesday morning, and the stock was up by about 3.2% just after noon. Corning also beat on the top and bottom lines and raised revenue guidance for the full fiscal year. The stock traded up by more than 4.6%. Homebuilder D.R. Horton beat estimates as well and issued guidance in line with expectations, and the stock dipped by about 0.7% Tuesday afternoon.

GE continued Tuesday morning’s streak of companies beating estimates, but CEO Larry Culp said that GE currently expects to match the low end of its previous guidance. The stock traded down 11.4%. PepsiCo also beat both revenue and profit estimates but issued profit guidance below analysts’ estimates, even though revenue guidance was higher than analysts are forecasting. The stock traded up about 0.3%. Raytheon beat the earnings per share (EPS) estimate but missed on revenue. Fiscal year guidance was mixed, and shares were up by 0.6% Tuesday afternoon.

After markets close Tuesday, Enphase Energy, GM, QuantumScape and Texas Instruments are on deck to report March-quarter results. To round out the action, Alphabet, Chipotle, Microsoft and Visa also release will their earnings reports after the closing bell.

Before markets open on Wednesday, reports from Boeing, General Dynamics and Teck Resources are expected, along with those from Kraft Heinz, Spotify and T-Mobile. After markets close Wednesday, watch for reports from Ford, Meta Platforms, PayPal and Qualcomm.

Three more notable companies we have covered are Altria, Las Vegas Sands and Sirius XM.

In addition to Caterpillar, Peabody Energy and Southwest Airlines, which are reporting first thing Thursday morning, here are previews of what analysts expect from three more firms.

Comcast

Since early September, Comcast Corp. (NASDAQ: CMCSA) has seen its share price fall by more than 25%. The good news is that’s better than Disney or Paramount Global (aka, ViacomCBS) but worse than the media industry drop of 16.5%. Comcast was able to escape the industry carnage following Netflix’s results, thanks mostly to its cable business.

Consumers, however, like streaming and continue to cut the cord to the tune of about 4.7 million subscribers annually. And it is not just costs that are driving cable cancellations. Consumers are following content, and if that means subscribing to yet another cable package, they are willing to do so.

Analysts remain bullish on Comcast stock, however, with 25 of 35 having a Buy or Strong Buy rating and another nine with Hold ratings. At a recent price of around $45.30 a share, the upside potential based on a median price target of $60 is 32.5%. At the high price target of $72, the upside potential is nearly 59%.

First-quarter revenue is forecast to come in at $30.56 billion, which would be up 0.4% sequentially and 11.9% higher year over year. Adjusted EPS are forecast at $0.81, up about 4.7% sequentially and 6.6% year over year. For the full 2022 fiscal year, analysts are expecting Comcast to report EPS of $3.55, up 10%, on sales of $122.49 billion, up 5.3%.

Comcast stock trades at 12.8 times expected 2022 EPS, 11.4 times estimated 2023 earnings of $3.97 and 9.9 times estimated 2024 earnings of $4.57 per share. The stock’s 52-week range is $44.27 to $61.80. Comcast pays an annual dividend of $1.08 (yield of 2.36%). Total shareholder return over the past year is negative 14.8%.

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