Earnings Previews: Boeing, Bristol-Myers Squibb, Kraft Heinz

The three major U.S. equity indexes closed higher on Friday, after staggering a bit in the early going. The Dow Jones industrials ended the day up 2.47%, the S&P 500 closed 2.37% higher and the Nasdaq rose 2.31%. All 11 sectors closed higher, led by materials (3.46%) and consumer cyclicals and financials (both 2.92%). Real estate (0.68%) and communications services (0.85%) posted the smallest gains.

The advance estimate (first of three) on third-quarter gross domestic product is due before markets open Thursday. Economists’ consensus estimate calls for a year-over-year increase of 2.3%. On Friday, the monthly report on personal consumption expenditures (PCE) will be released before U.S. markets open. Income is expected to rise by 0.3%, and core PCE inflation is forecast to rise by 0.4%. Both estimates match August readings. Some of the cash the company spends on share buybacks might be better spent on returning an income stream to investors.

The three major indexes opened mixed Monday morning, with the Nasdaq down by about 1% in the first half-hour of trading.

After U.S. markets close Monday, Cadence Design, Discover Financial and Range Resources will report quarterly results. Before markets open Tuesday, General Electric, General Motors, UPS and Valero Energy are on deck to report results. Alphabet, Coca-Cola, Enphase, Microsoft and Visa are also reporting late Tuesday or early Wednesday.

Here is a look at three companies set to report results first thing Wednesday morning.

Boeing

Since reaching a 12-month high last November, shares of Boeing Co. (NYSE: BA) are down by 34%. Shares got a bounce when the company reported second-quarter results, but it did not last.

The company continues to face issues with certifying two versions of its 737 Max jets. The Max 10, a stretched version, may be canceled altogether if the certification process stalls, and the Max 7, a shortened version, has run into documentation problems with the FAA. Together, the two versions comprise about a quarter of the 4,000 or so orders Boeing has on its books for the 737 Max family.

Of 22 analysts covering the stock, 18 have a Buy or Strong Buy rating and three more have Hold ratings. At a recent price of around $141.30 a share, the implied upside based on a median price target of $200.00 is 41.8%. At the high target of $298.00, the implied upside is about 111%.

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Consensus estimates call for third-quarter revenue of $18.03 billion, which would be up 8.1% sequentially and 18.0% higher year over year. Analysts are forecasting adjusted earnings per share (EPS) of $0.07, compared to a loss of $0.37 per share in the prior quarter and a loss per share of $0.60 last year. For the full 2022 fiscal year, Boeing is expected to post a loss of $2.37 per share, compared to last year’s loss per share of $9.44. Revenue is expected to increase by 11.7% to $69.57 billion.

Boeing stock trades at about 33.8 times estimated 2023 earnings of $4.18 and 20.3 times estimated 2024 earnings of $6.97 per share. The stock’s 52-week trading range is $113.02 to $233.94. Boeing has suspended its dividend, and total shareholder return for the past year was negative 34.1%.

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