PEP, DAL, JPM, CTAS: Earnings Preview

By Duncan Ferris

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In this week’s earnings preview we take a look at what to expect from PepsiCo, Delta Air Lines, JPMorgan Chase and Cintas Corporation.

Earnings season is kicking into full swing this week, with a slew of heavy hitters releasing their latest quarterly updates.

Here are the earnings in focus for the week ahead:

PepsiCo (NASDAQ: PEP)

Consumer staple stocks like PepsiCo can hold up pretty well under the kind of adverse market conditions we have seen in 2022. Indeed, the company’s stock has largely avoided the major price deterioration that has been widespread so far this year, dropping by just 0.64% across the year to date and standing at $171.88 at the time of writing. 

However, it has reached lows of around $153 during that period and signs of inflation pressure could result in another drop. Keep an eye out for significant declines in margin or slowing revenue growth, which could indicate supply chain pressure, consumers switching to cheaper alternatives to PepsiCo’s products and that price increases might be imminent.

With this being said, the company’s first quarter earnings showed revenue growth of 9.3% and a margin basis point increase of 5 points.

Consensus estimates from Zacks have revenue coming in at $19.8bn, which is around 3% growth compared to the same period 12 months prior, while EPS is seen as sitting at $1.72, or roughly unchanged.

Look out for PepsiCo’s earnings before the market open on Tuesday.

Delta Air Lines (NYSE: DAL)

This summer of travel has been frantic both in North America and Europe, with many airlines delaying and cancelling countless flights. It’s come as airlines struggle to cope with the return to pre-COVID normality.

Delta’s second quarter earnings are likely to give a snapshot of how the company is coping following the end to most COVID-19 travel restrictions. The period has seen very strong demand for air travel, but higher fuel costs and other operational pressures could counter the positive impact of a likely uptick in revenue.

Zacks Consensus Estimates show that revenue is anticipated to come in at $13.14bn for the three-month period, while EPS is expected to have more than doubled compared to the same period last year and come in at $1.70.

Investors can expect Delta’s earnings release early on Wednesday morning.

JPMorgan Chase (NYSE: JPM)

This investment banking and financial services giant has seen its share price decline by nearly 30% across the year to date.

Wall Street analysts expect this challenging period to be reflected in JPMorgan’s earnings update as well, with consensus estimates pointing to a 22% decline in earnings per share to $2.94.

This projected decline comes even as revenue is expected to climb by more than 6% compared to the same period 12 months prior, with consensus estimates pegging the number at $32.0bn. 

The performance of the bank is expected to be brought down by the investment banking arm, with commercial banking seen as likely to have performed well over the period. Investors should also keep an eye out for any comments on the future outlook, as these will indicate sentiment over the months ahead.

JPMorgan’s update is on course to be unveiled before trading commences on Thursday morning.

Cintas Corporation (NASDAQ: CTAS)

This business, which provides businesses with essentials like uniforms, hygiene equipment and safety equipment, is aiming high for its fourth quarter earnings.

In its previous update back in March the company upped its fourth quarter guidance, estimating that revenue would come in between $1.96bn and $2.02bn and diluted EPS to be in the range of $2.54 to $2.74.

Commenting on its third quarter showing, Cintas President and CEO Todd Schneider said:

“Our financial results are indicative of our strong value proposition. Businesses prioritize image, cleanliness, safety and compliance and, challenged with labor scarcity and rising costs, increasingly count on Cintas to help get them Ready for the Workday.”

This update resulted in its share price climbing to a 2022-high of above $434, though the share price has since peeled back to $381.07. Another strong showing and positive outlook this week might see that number recover towards former highs. 

Watch out for Cintas earnings before the start of the day on Thursday.

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In this article:

Topics:
Quarterly Earnings
Companies:
PepsiCo
Delta Air Lines
JPMorgan Chase
Cintas

Author: Duncan Ferris

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.

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

Duncan Ferris 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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