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Earnings Previews: BP, Enterprise Products, Marathon Petroleum, Newmont

Here is a preview of four more earnings reports due out Tuesday morning.

BP

Shares of integrated oil supermajor BP PLC (NYSE: BP) have performed well over the past year but trail far behind Chevron and Exxon, which are up 48% and 57%, respectively. BP’s 12-month increase was about 13.6%. BP just paid $4.1 billion to acquire a renewable gas company, another step toward the company’s stated goal of net-zero emissions from products it sells (so-called Scope 3) by 2050. In the meantime, analysts expect BP to follow Chevron and Exxon to near-record profits in the third quarter.

Of 23 brokerages covering the stock, 16 have a Buy or Strong Buy rating and seven rate the shares at Hold. At a recent price of around $33.20 a share, the implied upside to a median price target of $36.70 is 10.5%. At the high price target of $48.00, the upside potential is about 44.6%.

The consensus estimate for first-quarter revenue is $60.93 billion, which would be down 10.2% sequentially but up 68.5% year over year. Adjusted EPS are forecast at $1.89, down 27.6% sequentially and up 91.0% year over year. For the 2022 fiscal year, analysts expect BP to report EPS of $8.43, up 120%, on sales of $244.3 billion, up 55%.

The stock’s 52-week trading range is $25.33 to $34.30. BP pays an annual dividend of $1.34 (yield of 4.19%). The total shareholder return for the past year was 18.7%.

Enterprise Products

Energy pipeline operator Enterprise Products Partners LP (NYSE: EPD) has posted a share price gain of about 5.4% over the past 12 months. It is the largest oil and gas midstream (pipeline and infrastructure) company in the country, with a market cap of about $54.7 billion. The company’s payout ratio is nearly 82%, thanks in large part to its master limited partnership structure. Enterprise’s guaranteed cash flows from long-term contracts are mostly insulated from commodity price swings.

Of the 21 brokerages covering the stock, 16 have a Buy or Strong Buy rating and the other five have Hold ratings. At a share price of around $25.20, the stock trades about 23% below its consensus price target of $31.00. At the high target of $36.00, the upside potential on Enterprise stock is 42.9%.

Revenue for the September quarter is forecast at $13.82 billion, down about 14.0% sequentially and up 27.6% year over year. Adjusted EPS are forecast at $0.60, down 6.4% sequentially but 11.1% higher year over year. For the full 2022 fiscal year, analysts expect to see $2.46 in EPS, up 11.6% year over year, on sales of $56.1 billion, an increase of 37.5%.

The stock trades at about 10.2 times expected 2022 EPS, 9.7 times estimated 2023 earnings of $2.59 and 9.5 times estimated 2024 earnings of $2.65. The stock’s 52-week range is $20.42 to $28.65, and the company pays an annual distribution of $1.90 (yield of 7.53%). Total shareholder return for the past 12 months was 15.7%.

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