In mid-morning trading on Monday, the Dow Jones industrials were up 0.17% and the S&P 500 up 0.05%, but the Nasdaq was 0.22% lower.
Before U.S. markets opened on Monday, Norwegian Cruise Lines reported quarterly results that beat estimates on both the top and bottom lines. The cruise line operator also issued lower-than-expected second-quarter earnings per share (EPS) guidance and higher than forecast fiscal year EPS guidance. Shares traded up 5.8%.
ON Semiconductor beat analysts’ estimates for both EPS and revenue. The chipmaker also reaffirmed earnings and revenue guidance for fiscal 2023. Shares traded up about 7.5% Monday.
SoFi Technologies also beat both top-line and bottom-line estimates Monday morning. The company issued better-than-expected revenue guidance for the current quarter and the full fiscal year and boosted both ends of fiscal year EBITDA guidance. The stock traded down about 10.5%.
After markets close on Monday, MGM Resorts, NXP Semiconductors and Transocean are expected to report quarterly results. Then, BP, Enterprise Products Partners, Pfizer and Uber are on deck to report results the following morning. Look for results from AMD, Caesars, Energy Transfer and Ford later on Tuesday.
Here is what analysts expect to hear from these three companies when they report results before markets open 0n Wednesday.
Barrick Gold
Over the past 12 months, the price of gold has risen by about 6.7%. Canada-based Barrick Gold Corp. (NYSE: GOLD) has seen its share price improve by 11.4% over the same period. As was the case with rival Newmont, which reported results last week, higher realized gold prices could boost profits despite higher costs and lower production.
Barrick dropped out of the bidding for Australia’s Newcrest in January when the price was around $16.5 billion. Newmont’s latest offer came in at $19.5 billion, so Barrick’s idea that it will grow organically has at least been cheaper than continuing the chase for a bolt-on acquisition.
Analysts’ enthusiasm for Barrick stock has waned, with 17 of 23 brokerages having a Buy or Strong Buy rating while eight have Hold ratings. At a recent price of around $19.00, the upside potential based on a median price target of about $22.50 is 18.4%. At the high price target of around $25.50, the upside potential is 34.2%.
First-quarter revenue is forecast at $2.57 billion, which would be down 7.5% sequentially and by about 10% year over year. Adjusted EPS are forecast at $0.12, down 9.9% sequentially and by 53.8% year over year. For the full 2023 fiscal year, estimates call for EPS of $0.86, up 14.4%, on sales of $11.8 billion, up 7.2%.
Barrick stock trades at 22.3 times expected 2023 earnings, 17.7 times estimated 2024 earnings of $1.08 and 17.3 times estimated 2026 earnings of $1.10 per share. The stock’s 52-week range is $13.01 to $23.42. Barrick pays an annual dividend of $0.55 (yield of 2.89%). Total shareholder return for the past year was negative 10.84%.
CVS Health
The country’s third-largest provider of health care plans, CVS Health Corp. (NYSE: CVS), has seen its stock price rise dive by 23.6% in the past 12 months. The $10.6 billion acquisition of Oak Street Health in an all-cash transaction did not help. Since the deal was announced in early February, CVS stock is down nearly 14%.
CVS made the deal to keep up with Walgreens, Cigna, and UnitedHealth in adding primary care services to offset the eroding insurance business. The problem is that Oak Street has been losing money, and a turnaround is not expected just because the operations will get a new owner.
Analysts remain bullish on the stock, with 19 of 26 brokerages having a Buy or Strong Buy rating. The rest rate it at Hold. At a share price of around $73.50, the stock’s upside potential based on a median price target of $110.00 is about 79.7%. At the high price target of $143.00, the implied upside is 94.6%.
The consensus revenue estimate for the third quarter is $80.84 billion, down 3.6% sequentially but 5.2% higher year over year. Adjusted EPS are forecast at $2.09, up 5.2% sequentially and down 5.9% year over year. For the full 2023 fiscal year, analysts are looking for EPS of $8.77, up 0.9%, and revenue of $334.1 billion, up about 3.6% year over year.
CVS stock trades at 8.4 times expected 2023 EPS, 8.1 times estimated 2024 earnings of $9.07 and 7.4 times estimated 2025 earnings of $9.87 per share. The stock’s 52-week range is $71.94 to $107.26. CVS Health pays an annual dividend of $2.42 (yield of 3.3%). Total shareholder return for the past 12 months was negative 21.53%.
Kraft Heinz
Shares of Kraft Heinz Co. (NASDAQ: KHC) have retreated by 9.5% over the past 12 months. For the year to date, shares are down just over 3%. A solid dividend and payout ratio of 83% explains why more than 80% of the stock is held by institutional investors. Earnings guidance was below expectations when the company reported fourth-quarter results in February. The company also said it was going to stop raising prices for the rest of the year in North America, Europe, Latin America and most of Asia. Investors are going to want to see how that is working out.
Analysts, who typically focus more on growth than dividends, are mixed on the company. Of 21 brokerages covering the stock, 12 have Hold ratings and eight 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%. The targets and medians have not changed since February.
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