Second-quarter revenue is forecast at $13.73 billion, which would be up 12.7% sequentially and 2.3% higher year over year. American Airlines is expected to post adjusted EPS of $1.59, up sequentially from $0.05, and more than double the year-ago EPS of $0.76 per share. For the full 2023 fiscal year, the company is expected to post EPS of $2.96, up nearly 500%, on revenue of $52.81 billion, up 7.8%.
American stock trades at 6.2 times expected 2023 earnings, 5.4 times estimated 2024 earnings of $3.41 and 3.7 times estimated 2025 earnings of $4.92 per share. Its 52-week trading range is $11.65 to $21.42. American does not pay a dividend. The company’s total return for the past 12 months was 27.16%.
Freeport-McMoRan
Over the past 12 months, shares of copper and gold miner Freeport-McMoRan Inc. (NYSE: FCX) have soared by more than 56%. For the year to date, however, shares have added only 6.2%.
Gold prices are up about 15% for the past 12 months. Including a year-to-date gain of 8%, the yellow metal is trading close to its all-time high. Copper, Freeport’s key revenue producer, trades up about 15.5% for the past 12 months but is essentially flat since the beginning of the year. The company managed to reduce expenses in the first quarter but still failed to increase net income. Freeport burned almost $1.3 billion in cash in the first quarter, and free cash flow was negative $71 million.
Of 21 analysts covering the stock, 10 have a Buy or Strong Buy rating, and 10 rate it at Hold. At a share price of around $41.00, the implied upside to a median price target of $46.35 is about 13%. At the high price target of $57.00, the upside potential reaches 39%.
Second-quarter revenue is forecast at $5.66 billion, up 5.1% sequentially and by 4.4% year over year. Adjusted EPS are forecast at $0.38, down 27.8% sequentially and by 34.5% year over year. For the full 2023 fiscal year, analysts are expecting EPS of $1.79, down 26.6%, on sales of $22.99 billion, up 0.9%.
Freeport stock trades at 22.8 times expected 2023 EPS, 19.0 times estimated 2024 earnings of $2.15 and 15.2 times estimated 2025 earnings of $2.69. The 52-week range is $26.03 to $46.73. The company pays an annual dividend of $0.60 (yield of 1.46%). Total shareholder return for the past 12 months was 60.74%.
Newmont
Newmont Corp. (NYSE: NEM) has seen its share price fall by about 17.5% over the same 12 months that gold prices rose 15%. Newmont’s finally successful chase to pay around $19 billion for Australian gold miner Newcrest no doubt plays a part in the share price decline.
For mining companies wanting to stay in business, however, acquisitions are generally cheaper than new exploration. If a miner wants growth, it has to come by acquisition. And, provided that borrowing a truckload or two of cash is not too expensive, the limits on acquisition prices are an upwardly moving target.
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