After U.S. markets closed on Thursday, railroad operator CSX met the consensus estimate for earnings per share (EPS) and barely missed Wall Street’s revenue estimate. Intermodal (container) volume was down 18% year over year. Shares traded down 4.1% shortly before noon ET on Friday.
Intuitive Surgical reported better-than-expected EPS and revenue, but sales of its da Vinci robotic surgery device did not rise to the level investors were hoping for. Shares traded down 2.6% Friday morning.
Before U.S. markets opened on Friday, American Express beat the analysts’ EPS estimate but missed by about 2.3% on revenue. Year over year, however, revenue was up more than 12% to a record, and EPS reached an all-time high. Credit card spending reached an all-time high, and the company added another $100 million to its credit loss provision, bringing its total backstopping fund to $1.2 billion. That contributed to Friday morning’s share price decline of around 3.3%.
Schlumberger, like Amex, beat on profits and missed on revenue. The EPS beat was a single penny, while adjusted EBITDA rose by 10% sequentially and 28% year over year. Expenses, however, rose 16.7% sequentially and 20.8% year over year. Diluted EPS was higher sequentially but down 47% year over year. The stock traded down 3.3% Friday morning.
No earnings reports of note are due after U.S. markets close Friday or before they open on Monday. Later on Monday, look for results from Cadence Systems, Cleveland-Cliffs and NXP Semiconductor.
These four companies, including one Dow Jones industrial, are on deck to report quarterly results first thing Tuesday morning.
General Electric
Over the past 12 months, shares of General Electric Co. (NYSE: GE) have added nearly 64%, including a jump of nearly 33% for the year to date. Investors have prospered from the company’s spin-off of its healthcare business. The big issue now is the coming spin-off of the remaining energy business. What will be left behind is GE’s aviation business, and that will be the new GE.
Analysts remain bullish on the stock. There are 13 Buy or Strong Buy ratings, along with seven Hold ratings, among the 20 brokerages covering it. At a recent share price of around $111.00, the stock is close to its median price target of $111.50. At the high target of $130.00, the upside potential is 17%. The planned spin-off of the energy business is not expected to fetch the premium that followed the split with GE’s healthcare business.
First-quarter revenue is forecast at $15.15 billion, which would be up 4.6% sequentially but down 18.8% year over year. Adjusted EPS are forecast at $0.46, up 70% sequentially and down 41% year over year. For the full 2023 fiscal year, analysts expect GE to report EPS of $2.05, down 21.8%, on sales of $63.06 billion, down 17.6%. Second-quarter numbers for the prior quarter and the prior year include healthcare operations that were spun off in January 2023.
GE stock trades at 54.2 times expected 2023 EPS, 27.6 times estimated 2024 earnings of $4.02 and 20.8 times estimated 2025 earnings of $5.34 per share. Its 52-week range is $61.88 to $112.15, and GE pays an annual dividend of $0.32 (yield of 0.29%). Total shareholder return for the past 12 months was 109.69%.
24/7 Wall St.GE Healthcare
GE Healthcare Technologies Inc. (NASDAQ: GEHC) began trading on January 3 and joined the S&P 500 index on the same day. Since the spin-off from GE, which retained a 20% stake in the company, shares have added nearly 42%.
Last week, the company said it plans to form a new joint venture between its China-based subsidiary and Sinopharm, China’s state-controlled medical device maker. GE and Sinopharm have done business together for 30 years. The new agreement will focus on “non-premium CT and general imaging ultrasound solutions” for the primary care and rural domestic market.
The number of analysts covering the stock has risen from two in January to 10, and seven of those brokerages have a Buy or Strong Buy rating. There are also three Hold ratings. At a share price of around $82.70, the implied upside based on a median price target of $92.00 is 11.2%. At the high target of $97.00, the upside potential is 17.3%.
Analysts are forecasting first-quarter revenue of $4.79 billion, up 1.7% sequentially. EPS is expected to come in at $0.87, or 2.3% higher sequentially. For the full 2023 fiscal year, EPS are forecast at $3.74.
GE Healthcare stock trades at 22.1 times expected 2023 EPS, 19.3 times estimated 2024 earnings of $4.28 and 16.9 times estimated 2025 earnings of $4.90 per share. The stock’s year-to-date range is $53.00 to $87.83, and the company has initiated an annual dividend of $0.12 (yield of 0.15%).
3M
Over the past 12 months, shares of 3M Co. (NYSE: MMM) have tumbled by 22%. 3M was among our Dogs of the Dow for 2023, one of 10 Dow stocks paying the highest dividend, largely as a result of a falling share price. The stock price has dropped about 13.4% so far in 2023. The stock is one of the index’s three worst performers for both the past 12 months and for the year to date.
If there is any good news for the company, it is the $10.3 billion settlement it has reached with U.S. towns and cities over contaminated drinking water supplies. The not-so-good news is that similar litigation is still in the works.
Analyst sentiment reflects the company’s woes. Of 19 brokerages covering the stock, 15 have a Hold rating. There are no Buy or Strong Buy ratings, and 4 Sell or Strong Sell ratings. At a per-share price of around $104.00, the stock is trading at its median price target. At the high target of $161.00, the upside potential is 54.8%.
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The consensus revenue estimate for the first quarter is $7.88 billion, down 1.8% sequentially and down 9.4% year over year. Adjusted EPS are forecast at $1.76, a sequential decline of 10.7%, and a year-over-year decline of 29.0%. For the full 2023 fiscal year, analysts are looking for EPS to tumble by 14.7% to $8.62 on a revenue decline of 6.8% to $31.93 billion, down 6.7%.
3M stock trades at 12.1 times expected 2023 EPS, 10.8 times estimated 2024 earnings of $9.58 and 10.0 times estimated 2025 earnings of $10.39 per share. The 52-week range is $92.38 to $152.30, and 3M pays an annual dividend of $6.00 (yield of 5.75%). Total shareholder return for the past 12 months was negative 18.55%.
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