Earnings Preview: Antero Resources, Ford, Meta Platforms, Qualcomm

The three major U.S. equity indexes closed mixed on Monday. The Dow Jones Industrial Average added 0.28%, the Standard & Poor’s 500 closed up 0.13%, and the Nasdaq Composite fell 0.43%. Eight of 11 sectors, led by energy (up 3.7%) and utilities (up 1.3%) closed higher, while consumer cyclicals (down 0.9%) led the losers. After markets closed, Walmart sharply cut guidance for the rest of this year, and the shares traded down more than 9% in Tuesday’s premarket session. In premarket trading Tuesday morning, all three major indexes traded lower by less than half a point.

After markets closed Monday, energy company Range Resources reported better-than-expected earnings per share (EPS) and sharply higher revenue. The stock traded up more than 4% in the premarket session Tuesday.

NXP Semiconductors beat top and bottom line estimates and issued upside guidance for the third quarter. Shares traded down about 0.4% in Tuesday’s premarket.

Before markets opened Tuesday morning, General Electric also beat top and bottom line estimates, and orders for the company’s aircraft engines rose 26% year over year. Not all the news was good. The company expects supply-chain issues to lower free cash flow by about $1 billion. The stock traded up about 4.7%.

Albertsons beat both revenue and profit estimates and raised fiscal year 2022 EPS and same-store sales guidance. Shares of the grocery chain traded up about 2.2%.

3M Company also beat top and bottom line estimates but issued EPS guidance that was below the consensus estimate. Shares traded up more than 4%.

Coca-Cola also reported earnings and revenue above expectations. Shares traded up about 1%.

General Motors missed EPS estimates but beat on revenue. The company also announced multi-year agreements with lithium miner Livent and cathode provider LG Chem and reaffirmed prior guidance. The stock traded down about 1.7%.

McDonald’s reported better-than-expected EPS but missed on revenue. Shares traded up by about 0.5%.

UPS beat estimates on both the top and bottom lines and raised its share buyback forecast for this year to $3 billion. Shares traded down about 2.6%.

After markets close Tuesday afternoon, Alphabet, Microsoft, Texas Instruments, and Visa will be reporting quarterly results. On Wednesday morning, we’ll hear from Boeing, Cameco, Kraft-Heinz, and T-Mobile.

Here’s a look at four companies set to report results after markets close Wednesday afternoon.

Antero Resources

Independent oil and gas producer Antero Resources Corp. (NYSE: AR) is a major producer of natural gas liquids (NGLs) and natural gas in the Appalachian Basin. Over the past 12 months, the company’s share price has increased by about 186%. From early June to early July, the stock plunged by 40%. NGL prices have been low, and that has caused concern among some analysts. As demand from Europe for natural gas strengthens, Antero and its majority-owned Antero Midstream pipeline to the U.S. East Coast should see revenues and profits rise.

Analysts are bullish on Antero stock. Of 16 brokerages covering the company, 11 have given the stock a Buy or Strong Buy rating, and four rate the shares a Hold. At the current price of around $39.20, the upside potential based on a median price target of $49.50 is 26.3%. At the high price target of $62.00, the upside potential is 57%.

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Second-quarter revenue is forecast at $1.82 billion, up 130.8% sequentially and up 271.9% year over year. Analysts expect to post EPS of $1.96, up 70.6% sequentially and up from $0.13 in the year-ago quarter. For the full fiscal 2022 year, EPS is currently forecast at $6.25, up 333.5% year over year, on sales of $6.58 billion, up 42.5%.

Antero stock trades at 6.3 times expected 2022 earnings, 4.9 times estimated 2023 earnings of $7.95 per share, and six times estimated 2024 earnings of $6.55 per share. The stock’s 52-week range is $10.91 to $48.80. The company does not pay a dividend and total shareholder return for the past year was 186.3%.

Ford

Ford Motor Co. (NYSE: F) has reorganized itself around its electric vehicle (EV) plans. The company shipped its first all-electric F-150 Lightning pickups in May and booked sales of more than 1,800 in June. Overall shipments of EVs in June increased by more than 75% month over month, and that includes a drop of nearly 21% in Mustang Mach-E sales caused by a production stop due to a safety defect. Ford this month also introduced its gasoline-powered 2023 F-150 Raptor R pickup with a starting price of $109,145, the highest base price of any pickup on the market not named Hummer (GM’s base price for the all-electric Hummer is $110,595).

Analysts remain mixed on the stock with 12 of 22 brokerages giving the stock a Hold rating and 8 putting a Buy or Strong Buy rating on the shares. At a current price of around $12.80, the upside potential based on a median price target of $14.30 is 11.7%. At the high price target of $32.00, the upside potential is 150%.

Second-quarter revenue is forecast at $35.19 billion, up 9.6% sequentially and up 45.8% year over year. Adjusted EPS is forecast at $0.45, up 17.3% sequentially and up nearly 250% year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $1.92, up 20.9%, on sales of $144.34 billion, up 14.4%.

Ford stock trades at a multiple of 6.7 times expected 2022 EPS, 6.3 times estimated 2023 earnings of $2.03, and 6.4 times estimated 2024 earnings of $2.01 per share. The stock’s 52-week range is $10.61 to $25.87. Ford pays an annual dividend of $0.40 (yield of 3.12%). Total shareholder return for the past year was negative 5.5%.

Meta Platforms

Shares of Meta Platforms Inc. (NASDAQ: META) have plunged by nearly 55% over the past 12 months. With digital advertising in apparent freefall, the outlook for Meta’s Facebook platform is mixed at best. Apple’s app tracking transparency compounded Meta’s difficulties, making it more difficult to target ads to specific Facebook and Instagram users. And the vaunted Metaverse is still more of a promise than a product. With nothing to replace lost ad revenue except firing staff, employees are expecting job cuts of about 10% (around 7,800 of the company’s reported 77,800 full-time employees.

Of 54 analysts covering the stock, 40 have given the shares a Buy or Strong Buy rating and 12 have put a Hold rating on the stock. At a recent price of around $166.65, the upside potential based on a median price target of $260.00 is 56%. At the high target of $466.00, the upside potential is 180%.

Meta is expected to report second-quarter revenue of $28.95 billion, up 0 3.7% sequentially and down by 0.4% year over year. Adjusted EPS is pegged at $2.56, down 6% sequentially and down 29% year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $11.43, down 17%, on sales of $124.23 billi9on, up 5.3%.

The company’s stock trades at a multiple of 14.6 times expected 2021 EPS, 12.7 times estimated 2023 earnings of $13.15, and 11.4 times estimated 2024 earnings of $14.66 per share. The stock’s 52-week range is $154.25 to $384.33. Meta does not pay a dividend and total shareholder return for the past year was negative 54.9%.

Qualcomm

Networking chip and equipment maker Qualcomm Inc. (NASDAQ: QCOM) has added about 7.7% to its share price over the past 12 months. Since posting a 52-week low in late June, the shares have added 27.6%. The sudden turnaround in June came after closely followed Apple analyst Ming-Chi Kuo predicted that Apple had failed to develop its own 5G modem chip and that Qualcomm would remain Apple’s exclusive supplier of modem chips through the second half of next year. Apple is likely to get its own chip eventually, but until then, Qualcomm will have a near-certain income stream that it may already have begun to replace.

Of 33 analysts covering the company, 23 have a Buy or Strong Buy rating on the shares, and the other 10 rate the stock a Hold. At the current price of around $153.25, the upside potential based on a median price target of $184.00 is 20%. At the high target of $250, the upside potential is 63%.

Third fiscal quarter 2022 revenue is forecast to come in at $10.85 billion, down 2.8% sequentially and up 35.6% year over year. Adjusted EPS is forecast at $2.87, down 10.6% sequentially and up 49.5% year over year. For the full 2022 fiscal year, analysts currently expect the company to post EPS of $12.55, up 47%, on sales of $44.4 billion, up 32.7%.

Qualcomm stock trades at a multiple of 11.5 times expected 2022 EPS, 12.2 times estimated 2023 earnings, 11.6 times estimated 2023 earnings of $13.16, and 11.3 times estimated 2024 earnings of $13.55 per share. The stock’s 52-week range is $118.22 to $193.58. Qualcomm pays an annual dividend of $3.00 (yield of 1.96%). Total shareholder return over the past 12 months was 7.7%.

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