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Earnings Previews: Chevron, Exxon Mobil, NextEra Energy

After markets close Wednesday, Antero Resources, EQT, Ford and Meta Platforms will report quarterly results. Look for Altria, Cameco, Caterpillar and McDonald’s to report first thing Thursday morning. Later that day, Amazon, Apple, Intel, T-Mobile and U.S. Steel take their turns on the earnings stage.

Here is a preview of what analysts are expecting to hear Friday morning from these three companies.

Chevron

Over the past 12 months, shares of Chevron Corp. (NYSE: CVX) have risen by nearly 55%. Since peaking at around $124 a barrel in March, the price has dropped to below $90, a dip of about 27.5%.

Downstream profits (refining and marketing) are likely to drop by nearly 50% quarter over quarter while profits from natural gas sales are likely to be stronger. A recession could send the price tumbling, but that is still a possibility, not a cinch. All in all, Chevron and its peers are likely to continue doing well if not at quite the level of the previous two quarters.

Analysts’ sentiment remains strong for the stock. Of the 29 brokerages covering the stock, 16 have a Buy or Strong Buy rating and 12 have Hold ratings. At a recent share price of around $176.00, the upside potential based on a median price target of $180.00 is 2.2%. At the high price target of $202.00, the upside potential is 16.5%.

Third-quarter revenue is forecast at $61.44 billion, which would be down 10.6% sequentially but 37.4% higher year over year. Adjusted EPS are forecast at $4.85, down 16.6% sequentially and up 63.9% year over year. For the full 2022 year, analysts expect Chevron to post EPS of $18.42, up 126.5%, on revenue of $239.67 billion, up 47.5%.

Chevron stock trades at about 9.6 times expected 2022 EPS, 10.7 times estimated 2023 earnings of $16.55 and 12.6 times estimated 2024 earnings of $14.06 per share. The stock’s 52-week trading range is $110.73 to $182.40. Chevron pays an annual dividend of $5.68 (yield of 3.25%). Total shareholder return for the past 12 months was 61.3%.

Exxon Mobil

Shares of Exxon Mobil Corp. (NYSE: XOM) have risen by nearly two-thirds over the past 12 months. The company’s downstream profits are expected to drop by about a third sequentially, mostly due to lower prices for chemicals due to slowing demand. Exxon and Chevron have been returning cash to shareholders for several quarters now and are not likely to pause.

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