In mid-morning trading on Monday, the Dow Jones industrials were up 0.08%, the S&P 500 down 0.03% and the Nasdaq 0.41% lower.
Before markets opened on Monday, Dow component Coca-Cola reported better-than-forecast earnings per share (EPS) and revenue. The company expects to see fiscal year EPS of $2.58 to $2.60, in line with Wall Street estimates and prior guidance. Currency exchange rates will be a headwind in the second quarter and the rest of the year. Shares traded up about 0.6% Monday morning.
After U.S. markets close on Monday, Cleveland-Cliffs, First Republic Bank and Range Resources will report quarterly results. General Electric, GE Healthcare, General Motors, Raytheon and UPS are on deck to report earnings Tuesday morning. Look for Alphabet, Enphase Energy, Microsoft, PacWest Bancorp and Visa to report quarterly results later on Tuesday.
Here are previews of three companies set to report results before Wednesday’s opening bell.
Boeing
Since reaching a 12-month high in mid-February, shares of Boeing Co. (NYSE: BA) dropped to a recent low in late March following the company’s announcement of a new problem with its 737, a problem the company has since said is no big deal. Boeing also plans to increase its production rate of the 737 to 38 per month by June, 42 per month by January and 52 per month by January 2025, according to an exclusive report from Reuters late last month. The January 2025 production rate matches the company’s production before the two fatal crashes in 2018 and 2019.
Of 24 analysts covering the stock, 15 have a Buy or Strong Buy rating and eight more have Hold ratings. At a recent share price of around $203.50, the implied upside based on a median price target of $233.00 is 14.5%. At the high target of $270.00, the implied upside is about 32.7%.
The consensus estimate for first-quarter revenue is $17.56 billion, which would be down 12.1% sequentially but up 25.5% year over year. Analysts are forecasting an adjusted loss per share of $1.05, compared to a loss of $1.75 per share in the prior quarter and a loss per share of $2.75 in the first quarter of last year. For the full 2023 fiscal year, Boeing is expected to post a loss of $0.78 per share, compared to last year’s loss per share of $11.06. Revenue is expected to increase by 17.1% to $78.02 billion.
Boeing stock trades at 36.6 times estimated 2024 earnings of $5.56 and 22 times estimated 2025 earnings of $9.26 per share. Its 52-week trading range is $113.02 to $221.33. The Dow component has suspended its dividend, and total shareholder return for the past year was 12.45%.
24/7 Wall St.Norfolk Southern
Shares of railroad operator Norfolk Southern Corp. (NYSE: NSC) have fallen by about 21.3% over the past 12 months. The stock is down nearly 14% so far in 2023, largely the result of an Ohio derailment in February that released toxic chemicals when the derailed cars ignited.
Last week, Ohio Governor Mike DeWine told CNN that Norfolk Southern must do more to make whole the residents who have had their homes devalued and suffered health problems related to the incident. For its part, the railroad has said it will stay in East Palatine, Ohio, for “as long as it takes.” It did not say no matter how much it costs.
Analysts are naturally cautious, with 10 of 28 having a Buy or Strong Buy rating and 18 more rating the stock at Hold. At a share price of around $212.50, the upside potential to a median price target of $240.00 is about 12.9%. At a high price target of $275.00, the upside potential rises to 29.4%.
For the first quarter, analysts have forecast revenue at $3.11 billion, down 3.9% sequentially but 7.2% higher year over year. Adjusted EPS are forecast at $3.15, down 8.0% sequentially and up by 7.5% year over year. For the full fiscal year, analysts forecast EPS of $13.47, down 2.9% year over year, and revenue of $12.59 billion, down 1.2%.
Norfolk Southern stock trades at 15.8 times expected 2023 EPS, 14.5 times estimated 2024 EPS of $14.63 and 13.3 times estimated 2025 earnings of $15.99 per share. The stock’s 52-week range is $196.33 to $269.05. The company pays an annual dividend of $5.40 (yield of 2.55%). Total shareholder return over the past year is negative 19.55%.
Teck Resources
Canada-based Teck Resources Ltd. (NYSE: TECK) mines metallurgical coal used for steelmaking, copper, zinc and energy (primarily oil). Shares are up 13% for the past year, including a jump of 20% so far in 2023. The company’s shareholders will vote Wednesday on a proposal to split the company into two firms, one to be called Elk Valley Resources to mine the met coal, and the other, Teck Metals, to operate its other mines. Competing against that division is a hostile offer from commodity giant Glencore to acquire Teck Resources for $22.5 billion. Stay tuned.
Of 17 analysts covering the stock, 14 have a Buy or Strong Buy rating and 2two more rate the stock at Hold. At a share price of around $45.40, the upside potential based on a median price target of about $48.80 is 7.6%. At the high price target of around $59.10, the upside potential is 30.2%.
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