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Earnings Previews: AbbVie, Chevron, Exxon Mobil, Procter & Gamble

The three major U.S. equity indexes closed lower on Tuesday. The Dow Jones Industrial Average dropped 0.71%, the S&P 500 fell 1.15%%, and the Nasdaq Composite closed down by 1.87%. Eight of 11 sectors, led by consumer cyclicals (down 3.2%) and communications services (down 2%) closed lower while utilities (up 0.6%) led the gainers. At Fed chair Jerome Powell’s press conference this afternoon, economists are expecting to hear that the Fed’s policy rate will rise by 0.75%. The major indexes are trading higher late Wednesday morning..

After markets closed Tuesday, Alphabet reported misses on both the top and bottom lines. Better-than-expected search ad sales buoyed investors’ spirits, however, and the shares were trading up about 6.7% Wednesday morning.

Microsoft, like Alphabet, missed on both the top- and bottom-line estimates. An upbeat revenue forecast based on demand for the company’s cloud service has the stock trading up about 4.9% Wednesday.

Visa beat analysts’ estimates on both profit and revenue. Shares of the credit-card company traded up by about 1% Wednesday morning.

Before markets opened Wednesday morning, Boeing missed on both top- and bottom-line estimates. The aerospace company said it remained on track to post positive free cash flow in 2022 and that 737 production has now reached 31 per month. The stock traded up less than 1%.

Uranium company Cameco reported better-than-expected earnings per share (EPS) and revenue. Shares traded up more than 9.5% Wednesday morning.

Kraft Heinz also beat estimates for the top and bottom lines. The food company’s stock traded down about 6.8% Wednesday.

T-Mobile reported a surprise loss of $108 million that was blamed on costs related to the Sprint merger and other one-time items (totaling $1.09 billion). The telecom also missed revenue estimates even though service revenues rose by 5.7% year over year. Shares traded up about 3.5%.

After markets close Wednesday afternoon, Antero Resources, Ford, Meta Platforms, and Qualcomm will report quarterly results.

We’ve also previewed five companies reporting results before markets open Thursday morning–Comcast, Merck, Southwest Airlines, Tilray, and Valero Energy–and four more reporting results after markets close Thursday afternoon: Amazon, Apple, Intel, and US Steel.

Here’s a look at four companies set to report results before markets open Friday morning.

AbbVie

Pharmaceuticals giant AbbVie Inc. (NYSE: ABBV) posted an all-time high share price in early April, but that has dropped by more than 13% since. Although the company’s best-selling drug, Humira, loses patent protection in January, the company’s product pipeline improved markedly following its acquisition of Botox-maker Allergan. Of special note to investors, AbbVie’s dividend yield and total return are outstanding.

Brokerage firms remain bullish on AbbVie, with 14 of 23 putting Buy or Strong Buy ratings on the stock and another seven giving the shares a Hold rating. At a current price of around $149.20, the implied gain based on a median price target of $160.00 is 7.2%. At the high price target of $200.00, the implied gain is 34%.

Estimates for the second quarter of 2022 call for revenue of $14.63 billion, up 8.1% sequentially and an increase of 4.8% year over year, while adjusted EPS) is pegged at $3.30, up 4.5% sequentially and a gain of about 6.1% year over year. For the full 2022 fiscal year, analysts are currently looking for EPS of $13.90, a gain of 9.4% year over year, and sales of $59.56 billion, up 6.1%.

AbbVie stock trades at 10.7 times expected 2022 EPS, 12.4 times estimated 2023 earnings of $11.97, and 12.6 times estimated 2024 earnings of $11.82 per share. The stock’s 52-week range is $105.56 to $175.91, and AbbVie pays an annual dividend of $5.64 (yield of 3.74%). Total shareholder return over the past year was 31.6%.

Chevron

Over the past 12 months, shares of Chevron Corp. (NYSE: CVX) have risen by around 48%, including a drop of about 25% in just five weeks between early June and mid-July. Since peaking at around $124 a barrel in March, the price has fallen to below $100, a dip of 22.2%. The Energy Information Administration reported this morning that U.S. stockpiles are shrinking. Recession talk has cooled crude oil prices while production has remained essentially stagnant. If the Fed pulls in its inflation expectations–and if people believe that–crude demand and prices could jump higher again.

Analysts’ sentiment remains strong for the stock, even if the optimism is a bit more muted. At the beginning of January, 22 analysts had Buy or Strong Buy ratings on the stock. By April, that number had dropped to 15. Currently, of the 28 brokerages covering the company, 15 have a Buy or Strong Buy rating on the stock, and 12 have Hold ratings on the shares. At a current price of around $148.60, the upside potential based on a median price target of $178.00 is 21.8%. At the high price target of $202.00, the upside potential is 35.97%.

Second-quarter revenue is forecast at $57.69 billion, up 6.1% sequentially and 53.4% year over year. Adjusted EPS is forecast at $5.03, an increase of 34.3% sequentially and 194% year over year. For the full 2022 year, analysts currently expect Chevron to post EPS of $17.82, a gain of 119.2%, on revenue of $221.41 billion, up 36.3%.

Chevron stock trades at a multiple of 8.3 times expected 2022 EPS, 9.2 times estimated 2023 earnings of $16.07, and 11 times estimated 2024 earnings of $13.52 per share. The stock’s 52-week range is $92.86 to $182.40. Chevron pays an annual dividend of $5.68 (yield of 3.86%). Total shareholder return for the past 12 months was 54.2%.

Exxon Mobil

Shares of Exxon Mobil Corp. (NYSE: XOM) have risen by almost 57% over the past 12 months. Like Chevron, the company’s stock decreased by nearly 21% in the period between early June and mid-July. Investors will be looking at Exxon to share some of its windfall profits either through buybacks or a special dividend. One analyst estimates that the company could report year-over-year profit growth of 400%.

Of 27 analysts covering the stock, 14 rate the shares a Hold, seven give the stock a Strong Buy rating, and five more rate the shares a Buy. At a current price of around $90.75, the upside potential based on a median price target of $100.00 is 10.2%. At the high target of $125.00, the upside potential is 37.7%.

Second-quarter revenue is forecast at $111.67 billion, up 23.4% sequentially and 64.9% year over year. Adjusted EPS is pegged at $3.89, up 87.9% sequentially and  254% year over year. For the full 2022 fiscal year, current estimates call for EPS of $12.06, up 124.2%, on sales of $413.68 billion, an increase of almost 45%.

Exxon shares trade at a multiple of 7.5 times expected 2022 EPS, 9.1 times estimated 2023 earnings of $10.00, and 10.7 times estimated 2024 earnings of $8.49 per share. The stock’s 52-week range is $52.10 to $105.57, and Exxon pays an annual dividend of $3.52 (yield of 3.93%). Total shareholder return for the past 12 months was 64.9%.

Procter & Gamble

Dow 30 stock Procter & Gamble Inc. (NYSE: PG) has posted a share price gain of around 2.3% over the past 12 months. From a high posted in late January, shares slid 19% to a 52-week low in mid-June. Since then the shares have added about 9.5%. The company’s sales are rising, but investors are going to want to hear about profit margin and management’s outlook for fiscal 2023.

Of 23 analysts covering the stock, 13 have placed a Buy or Strong Buy rating on the shares, and nine more have a Hold rating. At a current price of around $144.00, the upside potential based on a median price target of $159.00 is 10.4%. At the high price target of $180.00, the implied gain is 25%.

Analysts expect P&G to report fourth fiscal 2022 quarterly revenue of $119.41 billion, virtually flat sequentially and up 2.4% year over year. Adjusted EPS is pegged at $1.23, down 7.7% sequentially and up 8.8% year over year. For the full 2022 fiscal year ended in June, current estimates call for EPS of $5.82, up 2.9%, on sales of $80.07 billion, an increase of 5.2%.

P&G shares trade at a multiple of 24.7 times expected 2022 EPS, 23.9 times estimated 2023 earnings of $6.03, and 22 times estimated 2024 earnings of $6.54 per share. The stock’s 52-week range is $129.50 to $165.35. P&G pays an annual dividend of $3.65 (yield of 2.53%). Total shareholder return for the past year was 4.6%.

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