After U.S. markets closed on Monday, Diamondback Energy reported revenue that beat Wall Street estimates by 1.2% and fell more than 30% year over year. Earnings per share (EPS) came in 5.1% below consensus and 47.9% below year-ago EPS. The stock traded down 0.5% at noon.
Before markets opened on Tuesday, BP missed the consensus EPS and revenue estimates. A dividend increase and a new buyback program softened the bad news. The stock traded down 1.1%.
Caterpillar beat estimates on both the top and bottom lines. The shares appear headed for a new all-time high. The stock traded up about 8.2% in the noon hour on Tuesday.
Enterprise Products missed estimates on both the top and bottom lines. Shares traded down about 1.1%.
Pfizer beat the consensus EPS estimate by 17.5%, but profits per share were lower by 67% year over year. Revenue also missed the consensus estimate and dropped by 54% year over year. Shares traded down 0.4% in the noon hour.
Uber posted a solid EPS beat and missed slightly on revenue. Shares traded down 5.5%.
After U.S. markets close on Tuesday, AMD, Devon Energy, Starbucks and Virgin Galactic will release earnings results. Then the following morning, look for reports from Cameco, CVS Health and Kraft Heinz. Taking their turns on the earnings stage later on Wednesday are Albemarle, MGM Resorts, Occidental Petroleum, PayPal and Qualcomm.
Here is a preview of what to expect from three companies reporting results first thing Thursday morning.
AB-InBev
In 2022, Anheuser-Busch InBev S.A./N.V. (NYSE: BUD) was the largest beer company in the world, with nearly $58 billion in revenue. Its most popular brand, Bud Light, was the best-selling beer in America. Then Bud Light ran a TV ad featuring transgender influencer Dylan Mulvaney, and Bud Light lost its top ranking. For the four-week period ending July 1, Modelo Especial (also brewed in the United States by AB-InBev) took over as number 1 with a market share of 8.7% to Bud Light’s 7.0%. What will the company have to say about all that?
Of 27 analysts covering the company, 18 have a Buy or Strong Buy rating and six more have a Hold rating. At a recent price of around $56.60 a share, the upside potential based on a median price target of about $69.00 is 21.9%. At the high price target of $90.00, the upside potential rises to 59%.
Analysts expect the company to report second-quarter revenue of $15.38 billion, which would be up 8.2% sequentially and by 4.0% year over year. Adjusted EPS are pegged at $0.70, up 7.2% sequentially but down 6.7% year over year. For the full 2023 fiscal year, estimates call for EPS of $3.04, down 3.4%, and revenue of $61.66 billion, up 6.7%.
AB-InBev stock trades at 18.6 times expected 2023 EPS, 15.7 times estimated 2025 earnings of $3.60,and 13.8 times estimated 2025 earnings of $4.09 per share. Its 52-week trading range is $44.51 to $67.09. The company pays an annual dividend of $0.82 (yield of 1.40%). Total shareholder return for the past 12 months was 8.21%.
ConocoPhillips
Over the past 12 months, shares of ConocoPhillips (NYSE: COP) have added 20% to their value. That gain includes a share price drop of about 4.2% over the past six months. The oil producer’s payout ratio of around 40% makes it a favorite of institutional investors who own about 80% of the outstanding shares. Crude oil prices are lower than they were a year ago but are expected to move higher in the second half of the year. The company’s outlook is likely to determine how investors react to the report.
There are 26 brokerages covering ConocoPhillips, and 19 have ratings of Buy or Strong Buy. The others rate the stock at Hold. At a share price of around $116.80, the upside potential based on a median price target of $126.00 is about 7.3%. At the high price target of $153.00, the upside potential is about 31.2%.
For the second quarter of 2023, analysts expect revenue of $15.03 billion, down 3.1% sequentially and 31.7% lower year over year. Adjusted EPS are expected to come in at $1.96, down 17.7% sequentially and by 49.9% year over year. For the full 2023 fiscal year, Conoco is expected to report EPS of $9.00, down 33.4%, on sales of $62.46 billion, down 24%.
Conoco stock trades at 13.0 times expected 2023 EPS, 11.6 times estimated 2024 earnings of $10.04 and 12.4 times estimated 2025 earnings of $9.40 per share. The 52-week trading range is $88.00 to $138.49. The company pays an annual dividend of $2.40 (yield of 2.04%). Total shareholder return for the past 12 months was 29.34%.
Warner Bros. Discovery
Media company Warner Bros. Discovery Inc. (NASDAQ: WBD), created following the April 2022 merger of Discovery with AT&T’s WarnerMedia, posted a 52-week low in late December. Since then, the stock is up by more than a third but is still down nearly 14% for the past 12 months. The studio’s Barbie movie has grossed more than $780 million worldwide since its release two weeks ago. Alas, the revenue will not show up until the company reports third-quarter earnings in about three months.
Of 27 analysts covering the stock, there are nine Hold ratings and 17 ratings of Buy or Strong Buy. At a share price of around $13.00, the implied upside based on a median price target of $19.00 is 46.2%. At the high price target of $33.00, the implied gain is around 154%.
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