Earnings Previews: DR Horton, General Electric, Halliburton, Lockheed Martin, Raytheon

Over the past 12 months, shares of General Electric Co. (NYSE: GE) have slipped by more than 23%. The shares dipped to their 52-week low in early July and have bounced more than 66% higher since. On January 3, GE spun off its Healthcare business into a new company, GE HealthCare Technologies Inc. (NASDAQ: GEHC), and GE shares have added 15.9%, and GE HealthCare shares have added 14.2% since the split. Following a spinoff of its energy businesses next year, GE will become solely an aerospace company.

Analysts remain bullish on the stock. There are 16 Buy or Strong Buy ratings, along with five Hold ratings, among the 21 brokerages covering it. At a share price of around $76.90, the potential upside to a median price target of $85.00 is about 11.8%. At the high target of $110.00, the upside potential is about 43%.

Fourth-quarter revenue is forecast at $22.11 billion, up 15.9% sequentially and by 8.9% year over year. Adjusted EPS are forecast at $1.16, up more than 230% sequentially and by 26.1% year over year. For the full 2022 fiscal year, analysts expect GE to report EPS of $2.55, up 20.4%, on sales of $76.8 billion, up 3.5%.

GE stock trades at 30.1 times expected 2022 EPS, 31.3 times estimated 2023 earnings of $2.56 and 18.6 times estimated 2024 earnings of $4.13 per share. The stock’s 52-week range is $59.93 to $101.91, and GE pays an annual dividend of $0.32 (yield of 0.4%). Total shareholder return for the past 12 months was negative 1.7%.

Halliburton

Oilfield services firm Halliburton Co. (NYSE: HAL) has seen its share price rise by nearly 42% over the past 12 months. Since the beginning of the year, however, shares are up a modest 2.1%. Crude oil prices are down more than 3.5% over the past year, but China’s return to the world energy economy is expected to boost demand for oil, and Halliburton’s services, both onshore and off, will be in steady demand. That is the bull case, and most analysts are buying it.

Of 26 analysts covering the company, 24 have a Buy or Strong Buy rating, and the other two have Hold ratings. At a share price of around $40.20, the upside potential based on a median price target of $47.50 is about 18.7%. At the high target of $54.00, the implied gain is about 34%.

Fourth-quarter revenue is forecast to come in at $5.59 billion, up about 4.4% sequentially and by more than 30% year over year. Adjusted EPS are forecast at $0.65, up 11.7% sequentially and by 86.1% year over year. For the full 2022 fiscal year, analysts expect EPS of $2.10, up 94.7%, on sales of $20.3 billion, up 32.7%.

Halliburton stock trades at 19.1 times expected 2022 EPS, 13.6 times estimated 2023 earnings of $2.95 and 11.2 times estimated 2024 earnings of $3.57 per share. The stock’s 52-week range is $23.30 to $43.99, and the company pays an annual dividend of $0.48 (yield of 1.18%). Halliburton’s total shareholder return for the past year was 43.6%.

Lockheed Martin

Over the past 12 months, shares of Lockheed Martin Corp. (NYSE: LMT) have added about 16.4%, but they are down more than 10% since posting a 52-week high in early December. For fiscal 2024, newly-elected Speaker Kevin McCarthy agreed to demands from fellow Republicans that tie an increase in the U.S. debt ceiling to cuts in discretionary spending and, more important to the Pentagon, a cap on the 2024 defense budget at the same level as fiscal 2022, about $75 billion below the 2023 level. For Lockheed, which derived about 96% of its 2021 revenue from Pentagon business, this is a big deal.