Earnings Previews: BP, Caterpillar, Enterprise Products, Diamondback Energy, Pfizer

The consensus estimate for second-quarter revenue is $54.79 billion, which would be down 2.5% sequentially and by 19.3% year over year. Adjusted earnings per ADS are forecast at $1.21, down 25.8% sequentially and by 53.6% year over year. For the 2023 fiscal year, analysts expect BP to report EPS of $5.69, down 34.1%, on sales of $217.84 billion, down 9.8%.

BP stock trades at 6.3 times expected 2023 EPS, 6.4 times estimated 2024 earnings of $5.76 and 6.5 times estimated 2025 earnings of $5.64 per ADS. Its 52-week trading range is $27.21 to $41.38. BP pays an annual dividend of $1.51 (yield of 4.08%). The total shareholder return for the past year was 33.01%.

Caterpillar

Shares of heavy equipment maker Caterpillar Inc. (NYSE: CAT) posted a 52-week high in late January, but the price has dropped by about 1.3% since then. The company’s 12-month return on capital employed is 21% and its free cash flow of $6.4 billion are both positives for investors. The negative is that the stock is expensive. Caterpillar reports results first thing Tuesday morning.

Of 29 brokerages covering the shares, 14 have a Hold rating, while another 12 have a Buy or Strong Buy rating. At a price of around $258.00 apiece, the shares have outrun their median price target of $255.00. At the high target of $351.00, the upside potential is 37.2%.

Caterpillar is expected to report second-quarter revenue of $16.53 billion, up 4.2% sequentially and 13.0% higher year over year. Adjusted EPS are forecast at $4.58, down 6.8% sequentially but up 44.0% year over year. For the full 2023 fiscal year, analysts are expecting EPS of $17.98, up 30%, on revenue of $65.42 billion, up 10.1%.

Caterpillar stock trades at 14.4 times expected 2023 EPS, 14.0 times estimated 2024 earnings of $18.45 and 12.7 times estimated 2025 earnings of $20.32. The 52-week trading range is $160.60 to $266.04. Caterpillar pays an annual dividend of $4.80 (yield of 2.01%). Total shareholder return for the past 12 months was 42.50%.

Enterprise Products Partners

Energy pipeline operator Enterprise Products Partners L.P. (NYSE: EPD) has posted a share price gain of about 1.6% over the past 12 months, including an 11.7% gain for the year to date. The company reports results Tuesday morning.

It is the largest oil and gas midstream (pipeline and infrastructure) company in the country, with a market cap of about $58.6 billion. The company’s payout ratio is nearly 75%, thanks in large part to its master limited partnership (MLP) structure. Enterprise’s guaranteed cash flows from long-term contracts are mostly insulated from commodity price swings, making Enterprise and its peers even more popular when times are bad.

Of the 21 brokerages covering the stock, 17 have a Buy or Strong Buy rating and the others have Hold ratings. At a share price of around $27.00, the implied upside based on a median price target of $32.00 is 18.5%. At the high target of $35.00, the upside potential on Enterprise stock is 19.6%.

Revenue for the first quarter is forecast at $12.32 billion, down about 1% sequentially and down 23.3% year over year. Adjusted EPS are forecast at $0.58, down 9.1% sequentially and byn9.4% year over year. For the full 2023 fiscal year, analysts expect to see $2.55 in EPS, up 1.3% year over year, on sales of $52.51 billion, a decrease of 9.8%.

Enterprise stock trades at 10.6 times expected 2023 EPS, 10.0 times estimated 2024 earnings of $2.68 and 9.7 times estimated 2025 earnings of $2.78. The 52-week trading range is $22.90 to $27.36, and the company pays an annual distribution of $2.00 (yield of 7.43%). Total shareholder return for the past 12 months was 11.50%.