Hundreds of earnings reports will be released this week. Among the most anticipated are reports from Tesla and Netflix. We will have coverage of these reports as they get closer. In this report, we look at a top logistics firm, the world’s largest publicly traded ad agency and a major U.S. airline.
Monday Morning’s Report
Before U.S. markets opened on Monday, Charles Schwab reported earnings per share (EPS) that beat the consensus estimate. Revenue came in short, down 16.3% year over year. Shares traded up by about 1% shortly after Monday’s opening bell.
Coming Up
Bank of America, Goldman Sachs, Johnson & Johnson and more will report quarterly earnings first thing Tuesday morning. Here is our look at what to expect from these reports.
Here is a look at three notable reports on the earnings calendar for Tuesday afternoon.
J.B. Hunt
Trucking and logistics company J.B. Hunt Transport Services Inc. (NASDAQ: JBHT) has seen its share price rise by more than 15% over the past 12 months.
The company has missed estimates for both sales and earnings per share (EPS) in three consecutive quarters. Last month, it acquired the brokerage operations of Berkshire Hathaway’s BNSF Logistics and signed a long-term service deal with BNSF. Analysts expect Hunt’s intermodal (container) volume to improve slightly in the third quarter. Intermodal volume is down almost 8% year over year for the entire industry. That has put pressure on pricing, profits and margins.
Of 26 analysts covering the stock, 16 have a Buy or Strong Buy rating, while another eight rate it at Hold. At a recent share price of around $191.00, the upside potential based on a median price target of $205.00 is 7.3%. At the high price target of $220.00, the upside potential is 15.2%.
Third-quarter revenue is forecast at $3.2 billion, which would be up 2.2% sequentially but down 16.7% year over year. Adjusted EPS are forecast at $1.84, up 1.5% sequentially and 28.4% lower year over year. For the full 2023 fiscal year, analysts expect to see EPS of $7.57, down 17.8%, on sales of $12.86 billion, down 13.2%.
J.B. Hunt shares trade at 25.3 times expected 2023 EPS, 21.7 times estimated 2024 earnings of $8.84 and 19.4 times estimated 2025 earnings of $9.85 per share. The 52-week trading range is $159.83 to $209.21. The company pays an annual dividend of $1.68 (yield of 0.88%). Total shareholder return for the past 12 months was 16.19%.
Omnicom
Omnicom Group Inc. (NYSE: OMC) is the world’s largest (by market cap) advertising, marketing and communications company, with some 5,000 clients in more than 70 countries. Omnicom posted an all-time high at around $98.00 a share in July. The shares have dropped 24% since then. Ad spending increased in the second quarter, and analysts expect that growth to rise slowly through the end of the year. Keep an eye on cash flow. It has declined in each of the past two quarters. Omnicom needs to turn that around.
Of 13 analysts covering the stock, just four have a Buy or Strong Buy rating, while another eight rate it at Hold. At a share price of around $75.00, the upside potential based on a median price target of $92.50 is 23.3%. At the high price target of $113.00, the upside potential is about 50.7%.
Third-quarter revenue is forecast at $3.57 billion, down 1.1% sequentially but up 3.8% year over year. Adjusted EPS are forecast at $1.85, up 2.2% sequentially and by 4.5% year over year. For the full 2023 fiscal year, analysts expect to see EPS of $7.33, up 6%, on sales of $14.6 billion, up 2.2%.
Omnicom shares trade at 10.1 times expected 2023 EPS, 9.6 times estimated 2024 earnings of $7.75 and 8.9 times estimated 2025 earnings of $8.33 per share. The 52-week range is $66.39 to $99.23. Omnicom pays an annual dividend of $2.80 (yield of 3.76%). Total shareholder return for the past year was 13.58%.
United Airlines
Over the past 12 months, United Airlines Holdings Inc. (NASDAQ: UAL) stock has added about 9.4%, significantly less than the decline of more than 43% to rival Delta’s stock. United posted record-high revenue in the second quarter, due to strong pent-up demand from travelers. That demand likely slowed in the third quarter, and higher fuel costs, declining demand for travel and lower revenue per seat mile could squeeze all airlines’ revenue and profit.
Analysts remain bullish on the stock. Of 21 brokerages covering the stock, 15 have assigned a Buy or Strong Buy rating. Another four have Hold ratings. At a share price of around $39.00, the upside potential based on a median price target of $60.00 is 53.8%. At the high price target of $93.00, the upside potential rises to 146.2%.
The consensus third-quarter revenue forecast calls for sales of $14.41 billion, up 1.6% sequentially and by 11.9% year over year. Analysts anticipate an adjusted EPS of $3.41 per share, down 32.2% sequentially but 21.4% higher year over year. For the full fiscal year, analysts expect EPS of $10.05, up nearly 300% year over year. Revenue is forecast to rise by 19.2% to $53.59 billion.
The stock trades at 3.9 times expected 2023 earnings, 3.8 times estimated 2024 earnings of $10.21 and 3.1 times estimated 2025 earnings of $12.64 per share. Its 52-week range is $35.25 to $58.23, and United does not pay a dividend. Total shareholder return for the past 12 months was 9.38%.
Originally published at 24/7 Wall St.
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