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 1.2% Tuesday morning.
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 0.8%.
Caterpillar beat estimates on both the top and bottom lines. The shares appear headed for a new all-time high. Caterpillar’s stock traded up 7.5% in mid-morning action Tuesday.
Enterprise Products missed estimates on both the top and bottom lines. Shares traded down 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 up 1.1%.
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.
Here is a preview of what to expect from five companies reporting results after Wednesday’s closing bell.
24/7 Wall St.Albemarle
Albemarle Corp. (NYSE: ALB) has regained some of its mojo after sinking to a 52-week low in April following the Chilean government’s announcement that it would assume a controlling interest in the country’s lithium mining operations. Albemarle’s stock remains down about 13% over the past 12 months, but most of that decline was absorbed in the last half of 2022. Lithium prices have bounced a little higher but remain 45% below their level of one year ago. So far, rising demand has not led to higher prices, likely due to high prices for electric vehicles.
Analysts are mostly bullish on Albemarle. Of 26 brokerages covering the stock, 19 have a Buy or Strong Buy rating, and five more have Hold ratings. At a recent price of around $212.00 a share, the implied gain based on a median price target of $275.00 is 29.7%. Based on the high price target of $360.00, the upside potential is about 69.8%.
Second-quarter revenue is forecast at $2.39 billion, which would be down 7.2% sequentially but up 61.4% year over year. Adjusted EPS are forecast at $4.52, down 56.2% sequentially and up 31.0% year over year. For the full 2023 fiscal year, analysts expect Albemarle to report EPS of $23.17, up 5.5%, on sales of $10.05 billion, up 37.2%. Albemarle posted nearly half of the fiscal year’s forecast EPS in the first quarter.
Albemarle stock trades at 9.2 times expected 2023 EPS, 9.5 times estimated 2024 earnings of $22.29 and 9.5 times estimated 2025 earnings of $22.28 per share. Its 52-week trading range is $171.82 to $334.55. Albemarle pays an annual dividend of $1.60 (yield of 0.77%). Total shareholder return over the past year was negative 12.54%.
MGM Resorts
Resort and casino operator MGM Resorts International (NYSE: MGM) has seen its share price increase by about 55% over the past 12 months. More than half of the share price gain has been posted this year. The boom times have slowed, however, as a new outbreak of COVID-19 in China was expected to hit a peak of 65 million per week by the end of June. Whether that was really the peak or if the disease is still spreading will have a lot to do with MGM’s outlook.
Sentiment remains mostly bullish on the stock, with 11 of 18 analysts having a Buy or Strong Buy rating and the rest rating it at Hold. At a share price of around $50.80, the upside potential based on a median price target of $58.00 is 14.2%. At the high price target of $64.00, the upside potential is 26%.
The consensus second-quarter revenue estimate is $3.8 billion, down 1.9% sequentially but 16.6% higher year over year. MGM is forecast to post EPS of $0.52, up 17.7% sequentially and compared to EPS of $0.03 in the year-ago quarter. For the full year, analysts expect EPS of $2.33, much better than last year’s loss per share of $2.74, on sales of $15.44 billion, up 17.6%.
MGM shares trade at 21.8 times estimated 2023 earnings, 19.4 times estimated 2024 earnings of $2.62 and 17.8 times estimated 2025 earnings of $2.85 per share. The 52-week trading range is $26.20 to $51.35. MGM pays an annual dividend of $0.01 (yield of 0.02%), and the total shareholder return for the past year was 55.14%.
Occidental Petroleum
Low prices have taken their toll on Occidental Petroleum Corp. (NYSE: OXY), just as they have on other oil and gas producers. In the first quarter of 2023, the company reported EPS that was down 48% year over year. Warren Buffett increased Berkshire Hathaway’s stake in Oxy to almost 25%. WTI crude oil traded down by about 13% for the past 12 months, while Oxy’s stock traded down by about 4% for the same period.
Of 26 brokerages covering the stock, 15 rate it at Hold and 10 have a Buy or Strong Buy rating. At a share price of around $63.00, the implied gain based on a median price target of $66.00 is 4.8%. At the high price target of $81.00, the upside potential is 28.6%.
Second-quarter revenue is forecast at $6.74 billion, down 7.2% sequentially and by 37.2% year over year. Adjusted EPS are pegged at $0.76, down 29.9% sequentially and by 75.9% year over year. For the full 2023 fiscal year, analysts expect to see EPS of $4.07, down 56.5%, on revenue of $28.04 billion, down 24.4%.
Occidental stock trades at 15.5 times expected 2023 EPS, 13.1 times estimated 2024 earnings of $4.83 and 13.9 times estimated 2025 earnings of $4.54 per share. The 52-week range is $55.51 to $77.13. Occidental pays an annual dividend of $0.72 (yield of 1.16%). Total shareholder return for the past year was negative 3.73%.
PayPal
PayPal Holdings Inc. (NASDAQ: PYPL) has seen its share price drop by more than 13% over the past 12 months, including a 6% increase so far in 2023. The company has fired some 2,000 people in an effort to get expenses under control but continues to face competitive challenges from large entrants like Apple and Google into the space PayPal has carved out for itself in more than 20 years. Sales rose year over year in the first quarter, as did profits. PayPal stock may get a boost if it can keep up that kind of performance.
Of 49 analysts covering the stock, 33 rate it at Buy or Strong Buy, and 16 have Hold ratings. At a share price of around $75.00, the upside potential based on a median price target of $90.00 is 16.7%. At the high target of $200.00, the upside potential is nearly 140%.
Second-quarter revenue is expected to come in at $7.27 billion, up 3.3% sequentially and by 6.8% year over year. Adjusted EPS are forecast at $1.16, down 0.6% sequentially but 24.7% higher year over year. For the full 2023 fiscal year, estimates call for EPS of $4.94, up 19.6%, on sales of $29.59 billion, up 7.5%.
PayPal stock trades at 15.2 times expected 2023 EPS, 13.2 times estimated 2024 earnings of $5.67 and 11.9 times estimated 2025 earnings of $6.32 per share. The 52-week range is $58.95 to $103.03. PayPal does not pay a dividend, and the total shareholder return for the past 12 months was negative 13.12%.
Qualcomm
Networking chip and equipment maker Qualcomm Inc. (NASDAQ: QCOM) has dropped about 9.7% from its share price over the past 12 months. The Dow Jones industrial average component could be a real value at its current share price, or it could be a value trap.
The company has been working on a way to shrink AI language models to fit on a cell phone. Qualcomm beamed at the recent announcement of Meta Platforms’ decision to release its Llama 2 large language model as open source. If, as the company believes, Qualcomm is way ahead of all its competitors in figuring out how to run AI algorithms on a smartphone, the stock is a bargain. If not, well, not so much.
Of 33 analysts covering Qualcomm, 25 have a Buy or Strong Buy rating and another seven rate it at Hold. At a share price of around $131.00, the upside potential based on a median price target of $140.00 is 6.9%. At the high target of $159.00, the upside potential is 21.4%.
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