Investing

Earnings Previews: Comcast, McDonald's, Twitter

McDonald’s

Shares of Dow Jones industrial average component McDonald’s Corp. (NYSE: MCD) have added nearly 10% to their share price over the past 12 months, including a drop of about 7% since January 6. Shares reached a new 52-week low in early March, due mostly to the company’s decision to suspend operations at its owned stores in Russia, a decision the company said would cost it about $50 million in monthly revenue. That is about $600 million annualized, for a company that recorded $23.2 billion in total 2021 revenue.

Analysts are solidly bullish on the stock, despite the Russian closings, with 27 of 37 having a Buy or Strong Buy rating while the other 10 rate the shares at Hold. At a share price of around $250.10, the upside potential based on a median price target of $280 is about 12%. At the high price target of $314, the upside potential is about 25.5%.

First-quarter revenue is forecast at $5.57 billion, down 7.3% sequentially but up 8.8% year over year. Adjusted EPS are pegged at $2.17, down 2.8% sequentially down 13.0% lower year over year. For full fiscal 2022, consensus estimates call for EPS of $9.80, up 5.6%, on revenue of $23.89 billion, up 2.9%.

McDonald’s stock trades at 25.5 times expected 2022 EPS, 23.0 times estimated 2023 earnings of $10.88 and 21.2 times estimated 2024 earnings of $11.78 per share. The stock’s 52-week range is $217.68 to $271.15. McDonald’s pays an annual dividend of $5.52 (yield of 2.18%). Total shareholder return over the past 12 months is 9.9%.

Twitter

Since Tesla CEO Elon Musk announced early this month a $44 billion offer to take Twitter Inc. (NYSE: TWTR) private, the stock has gained more than 26%. From a 52-week low posted a month earlier, the shares are up 53%. Now that it appears that Musk’s deal will close later this year, the primary reason to follow the stock is for a window into the business of a venerable social media company and how it is stacking up against rivals like TikTok. The short answer is probably, “Not too well.”

Of 36 brokerages rating the stock, there are 30 Hold ratings and three Buy ratings. At a share price of around $49.80, the stock trades above a median price target of $45.50. Musk offered $54.20 per share.

For the first quarter, revenue is forecast at $1.23 billion, down 21.8% sequentially and up 18.3% year over year. Adjusted EPS are forecast at $0.02, down 92.9% sequentially and 87.5% year over year. For full fiscal 2022, consensus estimates call for EPS of $0.85, up 325%, on revenue of $5.98 billion, up 17.8%.


Twitter stock trades at 58.6 times expected 2022 EPS, 42.3 times estimated 2023 earnings of $1.18 and 32.9 times estimated 2024 earnings of $1.52 per share. The stock’s 52-week range is $31.30 to $73.34. The company does not pay a dividend. Total shareholder return for the past year is negative 25.3%.

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