JNJ, HAL, AAL, CLF, TSCO: Earnings Preview

By Kirsteen Mackay

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This week we preview earnings for Johnson & Johnson (NYSE: JNJ), Halliburton (NYSE: HAL), American Airlines (NASDAQ: AAL), Cleveland-Cliffs (NYSE: CLF), and Tractor Supply Co (NASDAQ: TSCO).

As companies report earnings this week, the financial institutions are in focus. Monday sees earnings reports from Bank of America Corp (NYSE: BAC), Goldman Sachs Group (NYSE: GS), and Charles Schwab (NYSE: SCHW), while Nasdaq (NASDAQ: NDAQ) reports on Wednesday and American Express (NYSE: AXP) on Friday.

Here is our brief of some earnings picks for the week ahead:

Johnson & Johnson (NYSE: JNJ)

The Johnson & Johnson (NYSE: JNJ) share price is up 3.4% year-to-date. And JNJ stock has steadily climbed 31% over the past five years.

This $469bn stock has a 2.5% dividend yield and a price-to-earnings ratio (P/E) of 24.

Johnson & Johnson is due to report Q2 earnings on Tuesday, July 19, 2022. FactSet analyst estimates have an EPS consensus of $2.54 and a sales consensus of $23.8bn.

In JNJ's first quarterly report for 2022, global sales rose 5% to $23.4bn, while US sales rose 2.7% to $11.4bn. A 6% rise in pharmaceuticals and medical devices made up for a 1.5% decline in consumer healthcare sales.

With its vast global presence, JNJ doesn’t benefit from a strong US dollar.

The company has a history of dividend growth and remains a popular stock for long-term investors.

FactSet analysts have an Overweight rating on the stock with a target share price of $188.82.

Halliburton Company (NYSE: HAL)

Halliburton Company (NYSE: HAL) is one of the world's largest providers of products and services to the energy industry. Halliburton is due to report Q2 earnings on Tuesday, July 19, 2022. FactSet Estimates have an EPS consensus of $0.45 and a sales consensus of $4.7bn.

The HAL share price is up 32% over the past year but has fallen over 36% since early June. Pressure on the oil price continues as federal interest rate hikes look likely to quell demand.

Halliburton's management team anticipates North American customer spending to grow 35% this year from its previous estimate of 25%. It also expects international activity to improve in Q2.

In Q1, the HAL dividend rate was $0.12 per common share. The company expects dividend payments to remain approximately the same in Q2.

FactSet analysts have an Overweight rating on the stock with a target share price of $45.10. 

American Airlines Group Inc. (NASDAQ: AAL)

The share price of the American Airlines Group Inc. (NASDAQ: AAL) has fallen over 24% year to date. Yet it enjoyed a slight rise last week after declaring it expects to report its first pre-tax quarterly profit since the pandemic began. 

The $9.2bn company saw its market value slip below $4bn during the COVID-19 lows. It has since recouped some of those losses, but challenging circumstances remain, such as higher jet fuel costs and labor shortages.

Now, thriving travel demand is helping it balance inflationary costs. 

Investors will be looking for confidence that demand will continue. Inflation threatens businesses, but the rate hikes anticipated to suppress it could well bring a recession and a drop in consumer travel demand.

American Airlines will report Q2 earnings on Thursday, July 21, 2022. FactSet Estimates have an EPS consensus of $0.77 and a sales consensus of $13.3bn.

FactSet analysts have a Hold rating on the stock with a target share price of $17.59.

If you're interested in airline stocks, read our interesting write-up on Vertical Aerospace (NYSE: EVTL), an electric aerospace outfit that recently struck a deal with American Airlines.

Cleveland-Cliffs Inc (NYSE: CLF)

Steel producer Cleveland-Cliffs Inc (NYSE: CLF) has seen its share price fall over 33% year to date.

Cliffs is the largest flat-rolled steel producer in North America. Founded in 1847 as a mine operator, it is also North America's largest manufacturer of iron ore pellets. The company employs approximately 26,000 people across its operations in the United States and Canada. 

In Q1, Cleveland-Cliffs management stated:

We believe the ongoing increase in input costs, driven largely by current geopolitical events, provides us a unique advantage relative to our domestic peers, which can be capitalized on through higher margins.

Cleveland-Cliffs is due to report Q2 earnings on Friday, July 22, 2022. FactSet Estimates have an EPS consensus of $1.31 and a sales consensus of $6bn.

CLF stock has a price-to-earnings ratio (P/E) of 2.1 versus the industry average of 0.7. Its price-to-book value (P/BV) of 1.2 is close to the industry average of 0.8. Cleveland-Cliffs stock does not come with a shareholder dividend.

FactSet analysts have an Overweight rating on the stock with a target share price of $26.60.

Tractor Supply Co (NASDAQ: TSCO)

Tractor Supply Co (NASDAQ: TSCO) is due to report Q2 earnings on Thursday, July 21, 2022. FactSet Estimates have an EPS consensus of $3.50 and a sales consensus of $3.8bn. 

TSCO is a company with seasonal demand, and historically, its sales and profits are highest in Q2 and Q4. 

In Q1 net sales rose 8.3% to $3.02bn Y/Y. Comparable store sales for Q1 were $2.94bn, up 5.2% Y/Y. 

The TSCO share price is down 14% year-to-date but has steadily risen over 284% in the past five years.

TSCO stock has a price-to-earnings ratio (P/E) of 23.2, versus the industry average of 2. Its price-to-book value (P/BV) of 12.6 is considerably higher than the industry average of 2.2.

Tractor Supply Co stock offers shareholders a 1.8% dividend yield.

FactSet analysts have an Overweight rating on TSCO stock with a target share price of $240.96.

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In this article:

Topics:
Quarterly Earnings
Industries:
Healthcare
Energy
Industrials
Companies:
Johnson & Johnson
Halliburton Company
American Airlines Group
Cleveland-Cliffs
Tractor Supply Company

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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