Investing

Earnings Previews: Devon Energy, Diamondback Energy, Mosaic, Williams

Mosaic

Fertilizer maker Mosaic Co. (NYSE: MOS) has seen its share price increase by more than 85% over the past 12 months, including a decline of more than 16% since posting a 52-week high last week. The stock has far outperformed others in the chemical industry, which has posted one-year growth of just 1.2%.

Russia’s invasion of Ukraine has contributed significantly to the soaring share price, on worries of supply disruptions in commodities generally. The company already has warned that sales of some products will be around the low end of guidance ranges. Momentum investing in the stock apparently has peaked.

Of 21 brokerages covering the stock, 10 have a Buy or Strong Buy rating on the shares, and another 10 have a Hold rating. At a share price of around $65.30, the upside potential based on a median price target of $70 is 7.2%. At the high price target of $90, the upside potential is 37.8%.

First-quarter revenue is forecast to total $4.05 billion, up 4.1% sequentially and 76.1% year over year. Adjusted EPS are forecast at $2.42, down almost 24% sequentially but 325% higher year over year. For fiscal 2022, EPS are forecast at $12.13, up 140.7%, on sales of $19.4 billion, up 57%.

Mosaic stock trades at 5.4 times expected 2022 EPS, 7.2 times estimated 2023 earnings of $9.10 and 11.0 times estimated 2024 earnings of $5.94 per share. The stock’s 52-week range is $28.26 to $79.58. The company pays an annual dividend of $0.45 (yield of 0.71%). Total shareholder return for the past year was 82.2%.

Williams

Oil and gas pipeline operator Williams Companies Inc. (NYSE: WMB) has seen its share price add more than 54% over the past 12 months. The company’s Transco system that delivers natural gas from the Gulf Coast region to customers on the Eastern Seaboard is the nation’s largest-volume natural gas system. Williams transports about 30% of U.S. natural gas and is expanding its capacity to supply gas to liquefied natural gas (LNG) producers and power plants in the eastern United States.

Analysts are bullish on the stock, with 17 of 23 having a Buy or Strong Buy rating. Another five rate the shares at Hold. At a price of around $34.80 a share, the stock trades essentially at its median price target of $35. At the high price target of $42, the upside potential is 20.7%.


Analysts expect the company to report first-quarter revenue of $2.41 billion, down 25.9% sequentially and 7.7% lower year over year. Adjusted EPS are forecast at $0.34, down 11.7% sequentially and down a penny year over year. Current estimates for fiscal 2022 call for EPS of $1.41, up 3.4%, on sales of $10.49 billion, down 1.4%.

Williams stock trades at 24.8 times expected 2022 EPS, 23.0 times estimated 2023 earnings of $1.51 and 22.1 times estimated 2024 earnings of $1.58 per share. The stock’s 52-week range is $23.53 to $336.37. The company pays an annual dividend of $1.70 (yield of 4.95%). Total shareholder return for the past year was 51.3%.

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