Earnings Previews: Ford, Starbucks, US Steel

Fourth-quarter revenue is forecast at $40.73 billion, which would be up 9.5% sequentially and by 15.5% year over year. Adjusted EPS are forecast at $0.62, up 106.3% sequentially and 138.4% higher year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $1.99, up 24.9%, on sales of $150.24 billion, up 19.1%.

Ford stock trades at about 6.8 times expected 2022 EPS, 8.0 times estimated 2023 earnings of $1.69 and 7.9 times estimated 2024 earnings of $1.72 per share. The stock’s 52-week trading range is $10.61 to $21.05. Ford pays an annual dividend of $0.60 (yield of 4.65%). Total shareholder return for the past year was negative 31.6%.

Starbucks

Starbucks Corp. (NASDAQ: SBUX) posted its 52-week high last week, reaching a gain of almost 58% since it dipped to a 52-week low in mid-May. Over the past 12 months, the stock has gained 11%. The company has joined only a few others that require employees to return to their offices. In Starbucks’ case, that means at least three days a week. A month ago, employees at 100 company stores began a strike to pressure Starbucks and CEO Howard Schultz to unionize the stores. Fewer than 300 of Starbucks’ 9,000 U.S. locations are currently unionized.

Analyst sentiment is cool on the stock, with 20 of 34 having a Hold rating and 14 with a Buy or Strong Buy rating. At a share price of around $109.00, the upside potential based on a median price target of $111.00 is 1.8%. At the high price target of $136.00, the upside potential is 24.8%.

For the company’s first quarter of fiscal 2023, analysts expect revenue of $8.78 billion, up about 4.4% sequentially and by 9.0% year over year. Adjusted EPS are pegged at $0.77, down 5% sequentially and up 6.9% year over year. For the 2023 fiscal year ending in September, current estimates call for EPS of $3.44, 16.1%, on sales of $36.09 billion, up 11.9%.

Starbucks stock trades at 31.8 times expected 2023 EPS, 26.8 times estimated 2024 earnings of $4.07 and 22.5 times estimated 2025 earnings of $4.85 per share. The stock’s 52-week range is $68.39 to $109.73. Starbucks pays an annual dividend of $2.12 (yield of 1.94%). Total shareholder return for the past year was 13.64%.

U.S. Steel

Over the past 12 months, shares of United States Steel Corp. (NYSE: X) have added 37.5% to their value. More than all of the gain came in the past three months, and more than a third came in January. Steel prices have been climbing, if erratically, since November, adding about 20% to the price of steel rebar. Between May and November, steel prices fell by nearly a third, so the recent gains are certainly welcome. The big question, of course, is whether construction will pick up enough to keep raising demand for steel.

Of 11 brokerages covering the shares, only three have a Buy or Strong Buy rating. Another five rate the stock at Hold. At a price of around $28.50, the shares trade above the median price target of $24.00. At the high target of $37.00, the upside potential is 29.8%.

Fourth-quarter revenue is expected to come in at $4.01 billion, down 23.0% sequentially and 28.6% lower year over year. Adjusted EPS are forecast at $0.63, down almost 68% sequentially and by 82.7% year over year. For the 2022 fiscal year, analysts expect U.S. Steel to post EPS of $9.47, down 29.7%, on sales of $20.78 billion, up 2.5%.

U.S. Steel stock trades at 3.0 times expected 2022 EPS, 11.9 times estimated 2023 earnings of $2.39 and 15.4 times estimated 2024 earnings of $1.85 per share. The stock’s 52-week range is $16.41 to $39.25, and the company pays an annual dividend of $0.20 (yield of 0.69%). Total shareholder return for the past 12 months was 38.73%.

Originally published at 24/7 Wall St.

By Paul Ausick