Earnings Previews: Altria, Enterprise Products, Peloton, T-Mobile

In 2022, Peloton fired some 4,500 employees, replaced its chief executive, gave up its goal to manufacture its own products in the United States and cut its retail presence. New CEO Barry McCarthy has set a goal of positive free cash flow by end of fiscal 2023 (June). At the end of the September quarter, free cash flow was negative $246.4 million. McCarthy has cut about three-quarters from the negative free cash flow total in the second quarter of last year. But the company has to generate more revenue because it cannot cut costs indefinitely.

Analysts remain mildly bullish on the company. Of 31 brokerages covering the shares, 13 have a Buy or Strong Buy rating, while another 16 rate the stock at Hold. At a share price of around $12.70, the stock has outrun its median price target of $12.40. At the high target of $20.00, the upside potential is about 57.4%.

For the company’s second quarter of fiscal 2023, which ended in December, analysts expect revenue to total $712.3 million, up 15.5% sequentially but down 37% year over year. Analysts also expect a loss per share of $0.64, worse than the $0.59 loss per share in the prior quarter but better than the $1.32 per-share loss in the year-ago quarter. For the full fiscal year, analysts estimate a loss per share of $2.36, compared to a loss of $4.62 per share in fiscal 2022, on revenue of $2.66 billion, down about 25.6%.

Peloton is not expected to post a profit in 2023, 2024 or 2025. The stock’s estimated 2023 enterprise value to sales multiple is 2.2 times. That multiple drops to 2.0 in 2024 and 1.8 in 2025. The stock’s 52-week range is $6.66 to $40.35, and Peloton does not pay a dividend. Total shareholder return over the past year is negative 47.2%.


T-Mobile US Inc. (NASDAQ: TMUS) posted its 52-week high in early November, just a few days after releasing its third-quarter results. That is also the stock’s all-time high. Since then, the stock fell to a recent low of around $140.00 late last month, before recovering to close at $146.73 last Friday.

Unlike rivals AT&T and Verizon, T-Mobile offers growth, and analysts back up that offer with an overwhelmingly positive outlook for the stock. The company’s rollout of 5G leads its rivals by miles, and free cash flow for the four quarters through September totaled nearly $2 billion. The company could use some of that for a buyback (likely) or a dividend (less likely).

Analysts are nearly unanimously bullish on the stock, with 29 of 33 having a Buy or Strong Buy rating, and three more rating it at Hold. At a share price of around $146.30, the implied gain based on a median price target of $175.00 is about 19.6%. At the high target of $222.00, the implied gain is 51.7%.

Fourth-quarter revenue is forecast at $20.66 billion, up 6.1% sequentially and down by less than 1% year over year. Adjusted EPS are pegged at $1.06, down 53.1% sequentially and by 3.6% year over year. For the full 2022 fiscal year, analysts have forecast EPS of $2.18, down 48.9%, on sales of $79.96 billion, up 0.2%.

T-Mobile stock trades at 67.2 times expected 2022 EPS, 22.2 times estimated 2023 earnings of $6.62 and 15.7 times estimated 2024 earnings of $9.34 per share. The stock’s 52-week range is $104.80 to $154.38. The company does not pay a dividend, and total shareholder return for the past 12 months was 38.2%.

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