Investing

Earnings Previews: KeyCorp, Procter & Gamble, Truist

About 90 minutes after Tuesday’s opening bell, the Dow Jones industrials traded down 0.9%, the S&P 500 was down 0.1% and the Nasdaq traded 0.04% lower.

On Monday, Taiwan-based United Microelectronics reported quarterly and year-end results that missed the earnings per share (EPS) estimate slightly and beat the revenue estimate. Shares traded up 2.1% by mid-morning Tuesday.

Before the bell on Tuesday, Goldman Sachs reported misses on both EPS and revenue. Investment banking fees were down 48% year over year, and the bank’s provision for loan losses jumped from $344 million a year ago to $972 million. Shares traded down about 6%.

Morgan Stanley also missed the consensus EPS estimate but did top the revenue estimate. Investment banking fees were off 49% year over year, and equity net revenue fell 24% compared with the fourth quarter of last year. Shares traded up 7.2%.

Silvergate Capital missed on profits, reporting a loss of $1 billion, compared to a net profit of $18.4 million in the year-ago quarter. Shares traded up 20.5% in Tuesday’s premarket, likely due to the fact that Signature Bank reported a loss on digital assets of $12.4 billion compared to Silvergate’s $8.1 billion dump.

After markets close on Tuesday, United Airlines is expected to report quarterly results. Here is our preview. First thing Wednesday morning, Charles Schwab and Prologis are on deck to report quarterly earnings. Later on Wednesday, Alcoa, Discover Financial and Kinder Morgan will post results.

Here are our previews for three firms set to report results early Thursday morning.

KeyCorp

KeyCorp (NYSE: KEY) is a bank holding company that offers consumer banking at nearly 1,000 Key Bank locations and more than 1,300 ATMs in 15 states. The bank also offers wealth advisory and investment management services. By market cap, it is the 20th largest regional bank in the country, but its dividend is among the top quarter. As is the case with many banks, analysts are expecting lower revenue and profits due to the economic environment. A surprise in either direction likely will move the stock noticeably.

Analysts are cautious, with 10 of 22 having a Buy or Strong Buy rating and nine more rating the stock at Hold. At a recent price of around $18.00 per share, the upside based on a median price target of $20.00 is 11.1%. At the high price target of $43.00, the upside potential is 139%.


Fourth-quarter revenue is forecast to reach $1.93 billion, which would be up 2.3% sequentially but down 1.0% year over year. Adjusted EPS are forecast at $0.55, flat sequentially and down 15.4% year over year. For the full year, EPS is estimated to reach $2.10, down 20.0%, on revenue of $7.3 billion, up 0.1%.

KeyCorp stock trades at 8.6 times expected 2022 EPS, 8.2 times estimated 2023 earnings of $2.20 and 7.5 times estimated 2024 earnings of $2.40. The stock’s 52-week trading range is $15.26 to $37.17, and the company pays an annual dividend of $0.82 (yield of 4.51%). Total shareholder return over the past year was negative 30.3%.

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