Investing

Wednesday Morning Earnings Reports From Boeing, General Dynamics, T-Mobile

Paul Ausick

Published: October 23, 2023 12:11 pm

No notable earnings reports were released Friday afternoon or Monday morning. By the end of this week, there will be plenty to mull over. Two trillion-dollar+ tech giants will report results on Tuesday, and the nation’s two supermajor oil and gas companies will have plenty to talk about on Friday.

Speaking of oil, Monday morning’s big news is Chevron’s $53 billion all-stock acquisition of Hess. Take a look at what Chevron gets.

Before markets open on Tuesday, 3M, Cleveland-Cliffs, Halliburton and RTX will report quarterly earnings. So will ADM, Coca-Cola and Verizon. Look for earnings reports later on Tuesday from Alphabet, Microsoft, Snap, Texas Instruments and Visa.

Here is a look at three earnings reports set for release first thing Wednesday morning.

Boeing

Boeing Co. (NYSE: BA) could post its largest quarterly loss of the year this week. The Dow Jones industrial average company has not really stumbled, but it is certainly staggering around. Problems with the 737 and 787 continue, and the company’s defense division is heading for more losses. Commercial division deliveries dropped by more than 6% in the third quarter. The good news is that demand remains strong. Now, the company has to return to doing things right the first time.

Boeing stock is up nearly 30% over the past 12 months, including a year-to-date decline of more than 5%. The stock is down almost 15.5% over the past three months.

Of 27 analysts covering Boeing, 17 have a Buy or Strong Buy rating. Ten more have Hold ratings. At a share price of around $181.00, the implied upside based on a median price target of $250.00 is 27.6%. At the high target of $285.00, the implied upside is about 57.5%.

The consensus estimate for third-quarter revenue is $18.3 billion, which would be down 7.3% sequentially but up 14.7% year over year. Analysts are forecasting ‌an adjusted loss per share of $2.61, compared to a loss of $0.82 per share in the prior quarter and a loss per share of $6.18 in the third quarter of last year. For the 2023 fiscal year, Boeing is expected to post an adjusted loss of $4.28 per share, compared to last year’s loss per share of $11.06. Revenue is expected to increase by 16.6% to $77.68 billion.

Boeing stock trades at 37.4 times estimated 2024 earnings of $4.83 and 20.4 times estimated 2025 earnings of $8.85 per share. Its 52-week trading range is $132.21 to $43.10. Boeing has suspended its dividend, and total shareholder return for the past year was 27.77%.

General Dynamics

General Dynamics Corp. (NYSE: GD) is the country’s third-largest federal contractor. In 2022, received about 63% of its revenue from defense programs. That is considerably less than top federal contractor Lockheed Martin’s 72.7% of total 2022 revenue from its defense business.

Over the past 12 months, General Dynamics stock has dropped by about 1.2%. In the past month, shares are up more than 4%, due largely to the Hamas-Israeli war. A potential government shutdown will not cause serious damage to the stock. In fact, a shutdown may make ‌shares even more attractive to investors.

Of 24 analysts covering the stock, 17 have a Buy or Strong Buy rating. The rest rate it at Hold. At a share price of around $235.00, the upside potential based on a median price target of $262.50 is 11.7%. At the high price target of $325.00, the upside potential is 38.3%.

Analysts expect General Dynamics to report first-quarter revenue of $10.08 billion, down 0.7% sequentially and up 1.1% year over year. Adjusted EPS are forecast to reach $2.94, up 8.9% sequentially and down by 9.8% year over year. For the 2023 fiscal year, EPS are currently pegged at $12.60, up 3.4%, on revenue of $42.41 billion, up 7.6%.

At the current price, the stock trades at 18.6 times expected 2023 EPS, 15.7 times estimated 2024 earnings of $14.91 and 14.2 times estimated 2025 earnings of $16.48 per share. The 52-week trading range is $202.35 to $256.86. General Dynamics pays an annual dividend of $5.28 (yield of 2.25%). Total shareholder return over the past 12 months was negative 0.97%.

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T-Mobile

T-Mobile US Inc. (NASDAQ: TMUS) posted its all-time high ‌last November. Since then, shares have slipped by about 10%. Yet the company has met or beaten EPS expectations for 20 consecutive quarters, even as sales have stagnated. Despite some $70 billion in long-term debt, T-Mobile has raised its free cash flow to around $4.33 billion over the past 12 months. The share price is up just 2% in the past year, including a drop of nearly 2.2% in the past week.

Analysts are solidly bullish on the stock, with 28 of 30 having a Buy or Strong Buy rating. The others rate it at Hold. At a price of around $139.00 a share, the implied gain based on a median price target of $175.00 is about 25.9%. At the high target of $225.00, the implied gain is 61.9%.

Third-quarter revenue is forecast at $19.37 billion, up 0.9% sequentially but down by 0.6% year over year. Adjusted EPS are pegged at $1.89, down 7.5% sequentially and by 16.7% year over year. For the 2023 fiscal year, analysts have forecast EPS of $7.68, up 15%, on sales of $78.5 billion, down 1.3%.

T-Mobile stock trades at 18.1 times expected 2023 EPS, 13.7 times estimated 2024 earnings of $10.09, and 11 times estimated 2025 earnings of $12.64 per share. The 52-week range is $124.92 to $154.38. The company does not pay a dividend, and total shareholder return for the past 12 months was 1.59%.