Earnings Previews: BlackRock, Delta Air Lines, Taiwan Semiconductor, Walgreens

For the third quarter, the consensus revenue forecast is $13.63 billion, down 1.4% sequentially and up 49% year over year. Delta is expected to post EPS of $1.55, up 7.6% sequentially and by more than 400% year over year. For the full year, analysts expect EPS of $2.63 per share, compared to a year-ago loss of $4.08, on sales of $48.78 billion, up 63.2%.

The airline’s stock trades at 11.2 times estimated 2022 earnings, 5.9 times estimated 2023 earnings of $4.97 and 4.6 times estimated 2024 earnings of $7.83 per share. The stock’s 52-week range is $27.20 to $46.27. The company has suspended its dividend payment, and its total return for the past 12 months was negative 32.2%.

Taiwan Semiconductor

Last week, Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) reported that September-quarter revenue rose by 48% sequentially to $19.4 billion. Sagging PC sales have caused other chipmakers to warn on quarterly earnings, but TSMC continues to rely on Apple to outperform the market. So far, that bet has been paying off.

The company already has indicated that it will adhere to new U.S. export controls issued last week. Every chipmaker and semiconductor equipment maker closed in the red Monday as investors worry about Chinese retaliation for the stricter controls and sales to China generally.

Of 32 analysts covering the stock, 29 have a Buy or Strong Buy rating, and the others rate the shares at Hold. At a share price of around $67.40, the implied upside based on an average price target of nearly $118 is 74.8%. At the high price target of $160, the upside potential is 137.4%.

For TSMC’s third quarter of fiscal 2022, analysts are looking for revenue of $19.02 billion, up 5.9% sequentially and 27.7% higher year over year. Adjusted EPS are expected to come in at around $1.40, down 9% sequentially but up 30% year over year. For the full fiscal year, EPS are forecast at $5.31, up 39%, on revenue of $70.31 billion, up 22.9%.

TSMC stock trades at an enterprise value to sales multiple of 4.7, slipping to 4.3 in 2023 and 3.6 in 2024. The stock’s 52-week range is $67.01 to $145.00, and the low was posted Monday. The company pays an annual dividend of $1.86 (yield of 2.66%). Total shareholder return for the past 12 months is negative 37.8%.

Walgreens

Dow component Walgreens Boots Alliance Inc. (NYSE: WBA) was one of 2022’s Dogs of the Dow, the 10 stocks that paid the best dividend yield at the end of December 2021. The stock has dropped by nearly a third over the past 12 months, and shares posted their 52-week low last week. The company’s dividend yield remains outstanding, but that likely is due to the falling share price. As always in these kinds of situations, the question is how long this can last.

Of 19 analysts covering the stock, 16 have a Hold rating and two rate the shares at Sell or Strong Sell. At a share price of around $31.80, the upside potential based on a median price target of $41.50 is 30.5%. At the high target of $48, the upside potential is 51.0%.

For the company’s fourth quarter of fiscal 2022, analysts are expecting revenue of $32.17 billion, down 1.3% sequentially and by 6.1% year over year. Adjusted EPS are forecast to come in at $0.77, down 20.0% sequentially and 34.2% lower year over year. For the full fiscal year that ended in August, consensus estimates call for EPS of $5.03, down 5.2%, on revenue of $132.43 billion, down about 0.1%.

Walgreens stock trades at 6.3 times expected 2022 EPS, 7.0 times estimated 2023 earnings of $4.55 and 6.7 times estimated 2024 earnings per share of $4.75. The stock’s 52-week range is $30.39 to $55.00, and Walgreens pays an annual dividend of $1.92 (yield of 6.29%). Total return over the past 12 months was negative 29.8%.

Originally posted at 24/7 Wall St.

By Paul Ausick