Here are previews of three more companies set to report early Thursday.
Caterpillar
Shares of heavy equipment maker Caterpillar Inc. (NYSE: CAT) posted a new 52-week high in late January, but the price has dropped by about 15% since then.
The company avoided a strike by concluding a six-year contract with 7,000 workers in early March. Its $30 billion backlog is being looked at as both a blessing and a curse. On the one hand, that is about half of this year’s revenue in the bag. On the other hand, where does the other half of 2023 revenue come from now that orders have slowed? The Dow component will have to address this question when it reports results.
Of 29 brokerages covering the shares, 12 have a Hold rating, while another 12 have a Buy or Strong Buy rating. At a recent price of around $221.00 a share, the upside potential to a median price target of $255.00 is 15.4%. At the high target of $345.00, the upside potential is 56.1%.
Caterpillar is expected to report first-quarter revenue of $15.27 billion, which would be down 1.8% sequentially but up 12.4% year over year. Adjusted EPS are forecast at $3.79, down 1.8% sequentially and 30.8% higher year over year. For the full 2023 fiscal year, analysts expect EPS of $15.95, up 15.3%, on revenue of $63.63 billion, up 7.1%.
Caterpillar stock trades at 13.9 times expected 2023 EPS, 12.9 times estimated 2024 earnings of $17.17 and 11.6 times estimated 2025 earnings of $19.03. The stock’s 52-week trading range is $160.60 to $266.04. Caterpillar pays an annual dividend of $4.80 (yield of 2.15%). Total shareholder return for the past 12 months was 4.8%.
Newmont
Over the past 12 months, gold prices have increased by about 4.3%. Newmont Corp. (NYSE: NEM) has seen its share price fall by 36% over the same 12-month period.
Despite a previous rejection, Newmont earlier this month boosted its bid for Australian gold miner Newcrest to AUD$29.4 billion (about $19.65 billion). Newcrest shareholders would receive 0.4 of a Newmont share for each Newcrest share plus a special dividend payment of $1.10 per Newcrest share in cash. The offer is 16% higher than Newmont’s earlier bid and represents a premium of about 46% before Newmont’s earlier bid was revealed. If the deal goes through, it would be the third largest ever for an Australian firm and the third largest in the world so far this year.
Analysts remain cautious on Newmont stock, with 11 of 23 brokerages having Hold ratings while 11 others have Buy or Strong Buy ratings. At a share price of around $47.80, the upside potential based on a median price target of $57.36 is 20%. At the high price target of $67.00, the upside potential is 40.2%.
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