Earnings Previews: McDonald’s, PepsiCo, 3M, Verizon
In the first half-hour of trading Friday, the Dow Jones industrials and the S&P 500 were both flat and the Nasdaq was 0.11% lower.
After U.S. markets closed Thursday afternoon, railroad operator CSX reported quarterly results that beat estimates on both the top and bottom lines. Shares traded up 2.4% early Friday.
Before markets opened on Friday, Procter & Gamble beat the consensus earnings per share (EPS) and revenue estimates. The consumer goods giant also affirmed previous fiscal 2023 EPS guidance and raised revenue guidance. Shares traded up by 4.2%.
Regions Financial missed both Wall Street revenue and profit estimates, but considering the bank’s near-death experience, that is not so bad. The stock traded down about 4.4% Friday morning.
Schlumberger also beat both top-line and bottom-line estimates, but not by enough to impress investors. Shares traded down 1.9%.
Freeport-McMoRan beat consensus estimates for both EPS and revenue, but the bar was set too low to give shares a lift. Lower copper prices and a 50% drop in production contributed to the mediocre results. Shares traded down by 4.3%.
Cleveland-Cliffs, Coca-Cola, First Republic Bank and Range Resources are on deck to report quarterly results on Monday.
Here are previews of four companies set to report results first thing Tuesday morning.
McDonald’s
Shares of McDonald’s Corp. (NYSE: MCD) have added almost 14% to their price over the past 12 months, though growth for the first quarter of 2023 so far is just 4.3%.
Two weeks ago, the fast-food chain laid off hundreds of corporate employees and reduced the compensation of others. That does not hurt the share price, of course. What might is a continuing dispute with the company’s franchisees over corporate standards and rules that Mickey D’s insists on but that franchisees balk at because they have little to no input into the process nor any recourse from its effects.
Of 36 brokerages covering the Dow stock, 27 have a Buy or Strong Buy rating, while another eight rate McDonald’s at Hold. At a recent share price of around $291.00, the upside potential based on a median price target of $300.00 is 3.1%. At the high price target of $330.00, the upside potential is about 13.4%.
First-quarter revenue is forecast at $5.58 billion, which would be down 5.8% sequentially and down about 1.6% year over year. Adjusted EPS are pegged at $2.33, down 9.9% sequentially but up 2.2% year over year. For the full 2023 fiscal year, consensus estimates call for EPS of $10.64, up 5.4%, on revenue of $24.43 billion, also up 5.4%.
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