Earnings Previews: AbbVie, Comcast, Valero Energy

Comcast

Comcast Corp. (NASDAQ: CMCSA) has added more than 24% to its share price so far in 2023, but the stock has gained less than 2% over the past 12 months. The company has been waging a defensive battle against booming fixed wireless deployment by AT&T and Verizon. Comcast’s large customer base helps, but new fixed wireless is cheaper and almost as fast as Comcast’s fiber optic service.

The good news for investors is that Disney is highly likely to purchase Comcast’s 33% stake in Hulu in January. The minimum price is around $9 billion, but most analysts think it will go higher. Comcast thinks it is worth about three times that price.

Analysts remain bullish on Comcast stock, however, with 19 of 32 brokerages having a Buy or Strong Buy rating and another 11 rating it at Hold. At a share price of around $43.50, the upside potential based on a median price target of $46.50 is 6.9%. At the high price target of $60.00, the upside potential is 37.9%.

Second-quarter revenue is forecast to come in at $30.14 billion, up 1.5% sequentially and basically flat year over year. Adjusted EPS are forecast at $0.98, up 6.4% sequentially but 3.0% lower year over year. For the full 2023 fiscal year, analysts expect Comcast to report EPS of $3.63, down 0.2%, on sales of $120.3 billion, down 0.9%.

Comcast stock trades at 11.9 times expected 2023 EPS, 10.6 times estimated 2024 earnings of $4.07 and 9.7 times estimated 2025 earnings of $4.47 per share. The 52-week trading range is $28.39 to $43.72. Comcast pays an annual dividend of $1.16 (yield of 2.68%). Total shareholder return over the past year is 5.29%.

Valero Energy

Oil refiner and product marketer Valero Energy Corp. (NYSE: VLO) has seen its share price increase by about 21% over the past year. Shares have dipped by less than 1% so far in 2023. Refining and marketing profits depend a lot on the price of crude. West Texas Intermediate prices are up about 3% so far this year and down by 18.5% over the past 12 months. Crude prices have bounced a bit higher over the past three months, adding about $5.00 a barrel (6%) to Valero’s costs. The solid dividend keeps investors interested.

Of the 21 analysts covering the stock, 16 have a Buy or Strong Buy and four have Hold ratings. At a share price of around $126.00, the upside potential based on a median price target of $140.50 is 11.5%. At the high price target of $171.00, the upside potential is around 35.7%.

Analysts are forecasting second-quarter revenue of $35.57 billion, down 2.4% sequentially and down 31.1% year over year. Adjusted EPS are pegged at $5.08, down 38.6% sequentially and by 27.5% year over year. For the full 2023 fiscal year, current estimates call for EPS of $21.68, down 35.7%, on revenue of $143.73 billion, down 18.5%.

Valero stock trades at 5.8 times expected 2023 EPS, 9.5 times estimated 2024 earnings of $13.23 and 11.2 times estimated 2025 earnings of $11.19 per share. The 52-week range is $97.73 to $150.39. The company pays an annual dividend of $4.08 (yield of 3.46%). Total shareholder return for the past 12 months was about 18.9%.

Originally published at 24/7 Wall St.

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