In mid-morning trading Monday, the Dow Jones industrials traded 0.7% higher, the S&P 500 was up 0.71% and the Nasdaq was up 0.88%.
After U.S. markets close, Palantir Technologies and Vornado Realty Trust will report quarterly results. Cleveland-Cliffs, Coca-Cola and Peabody Energy are on deck to report results first thing Tuesday morning. Then later on Tuesday, look for reports from Airbnb, Devon Energy and Livent.
Here is a look at what to expect when the following three firms report earnings before Wednesday’s opening bell.
Barrick Gold
Over the past 12 months, the price of gold has dipped by just under 1%. Barrick Gold Corp. (NYSE: GOLD) has seen its share price slide by more than 13% over the same period.
The big news in the gold fields is the $16.9 billion buyout offer from Newmont for Australia’s largest gold producer, Newcrest. Barrick CEO Mark Bristow said last week that his company would not make a competing bid. The company announced last week that its proven and probable gold reserves grew by 6.7 million ounces in 2022 to 76 million ounces at a grade of 1.67 grams per ton of rock with an assumed price of $1,300 per ounce. That is about one ounce of gold for every 17 tons of rock.
Analysts remain bullish on Barrick stock, with 19 of 25 brokerages having a Buy or Strong Buy rating while the rest have Hold ratings. At a recent share price of around $18.00, the upside potential based on a median price target of about $21.50 is 19.4%. At the high price target of $29.00, the upside potential is 61.1%.
Fourth-quarter revenue is forecast at $2.8 billion, which would be up 10.9% sequentially but down about 14.8% year over year. Adjusted EPS are forecast at $0.12, down 7.5% sequentially and by 65.7% year over year. For the full 2022 fiscal year, estimates call for EPS of $0.78, down 33.1%, on sales of $10.96 billion, down 8.5%.
Barrick stock trades at about 23.1 times expected 2022 earnings, 20.7 times estimated 2023 earnings of $0.87 and 17.5 times estimated 2024 earnings of $1.03 per share. The stock’s 52-week trading range is $13.01 to $26.07. Barrick pays an annual dividend of $0.55 (yield of 3.07%). Total shareholder return for the past year was negative 10.05%.
24/7 Wall St.Kraft Heinz
Shares of Kraft Heinz Co. (NASDAQ: KHC) have added about 16% over the past 12 months, with more than half that gain coming in the past three months. For the year to date, however, the shares are down 1.5%. A solid dividend and payout ratio of 160% keeps about half the stock in the investment portfolios of institutional investors. The company does need to pay more attention to growth, but, in the meantime, its payout is enough to keep investors in the pen.
Analysts, who typically focus more on growth than dividends, are mixed on Kraft Heinz. Of 21 brokerages covering the stock, 11 have a Hold rating and seven have a Buy or Strong Buy rating. At a share price of around $40.00, the upside potential based on a median price target of $44.00 is 10%. At the high price target of $52.00, the upside potential is 30%.
Kraft Heinz is expected to post fourth-quarter revenue of $7.24 billion, up 11.2% sequentially and 7.9% higher year over year. Adjusted EPS are forecast at $0.78, up 24.0% sequentially and down 1.3% year over year. For the full 2022 fiscal year, analysts are looking for EPS of $2.71, down 7.5% year over year, on revenue of $26.34 billion, up by 1.1%. Costs are higher, but Kraft is able to raise prices enough to keep from falling behind.
The company’s stock trades at 14.8 times expected 2022 EPS, 14.5 times estimated 2023 earnings of $2.76 and 13.7 times estimated 2024 earnings of $2.92 per share. The stock’s 52-week range is $32.73 to $44.87. Kraft Heinz pays an annual dividend of $1.60 (yield of 4.04%). Total shareholder return for the past 12 months was 20.22%.
Roblox
Interactive entertainment platform Roblox Corp. (NYSE: RBLX) has seen its stock price tumble by nearly 48% over the past 12 months. Thanks to a year-to-date gain of nearly 23%, the damage is not worse. When the company announced third-quarter results that fell short of estimates, the stock took a 20% hit. Roblox is unlike many other tech companies in two ways: it has yet to announce any layoffs, and it continues to place more emphasis on growth than profits.
Of 28 analysts covering the stock, 12 have a Buy or Strong Buy rating and nine more rate it at Hold. At a price of around $35.00 a share, the implied gain based on a median price target of $35.50 is 1.4%. At the high target of $71.00, the upside potential is about 100%.
24/7 Wall St.The consensus fourth-quarter revenue estimate is $884.71 million, up 26.1% sequentially and by 14.8% year over year. Analysts also expect Roblox to post a loss per share of $0.54, compared to the prior quarter’s loss of $0.50 per share and the year-ago quarter’s loss of $0.25. For the full fiscal year, the company is expected to post a loss of $1.62 per share compared to last year’s loss of $0.97 per share. Revenue is forecast at $2.85 billion, up 4.5%.
Roblox is not expected to post a profit in 2022, 2023 or 2024. The stock’s enterprise value to sales multiple for 2022 is 6.9. For 2022 and 2023, the multiple is 5.9 and 5.1, respectively. The stock’s 52-week range is $21.65 to $73.71, and the company does not pay a dividend. The total shareholder return for the past year was negative 47.49%.
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