Interest rates take center stage with banks set to report quarterly results

A combination file photo shows Wells Fargo, Citibank, Morgan Stanley, JPMorgan Chase, Bank of America and Goldman Sachs.

Reuters

Bank stocks remain under pressure due to high interest rates as financial firms like Club holdings Wells Fargo (WFC) and Morgan Stanley (MS) get ready to kick off earnings season.

Source link

#Interest #rates #center #stage #banks #set #report #quarterly #results

What a stressed commercial real estate market means for these exposed bank stocks

Collin Madden, founding partner of GEM Real Estate Partners, walks through empty office space in a building they own that is up for sale in the South Lake Union neighborhood in Seattle, Washington, May 14, 2021.

Karen Ducey | Reuters

Banks are facing mounting uncertainty as the commercial real estate (CRE) sector continues to struggle. But, tailwinds in our financial names should help safeguard their bottom lines.

Source link

#stressed #commercial #real #estate #market #means #exposed #bank #stocks

Top Wall Street analysts are upbeat about these dividend stocks

While many growth stocks have recovered this year, investors continue to look for attractive dividend picks that can offer steady income and the potential for long-term capital appreciation.

Here are five dividend stocks worth considering, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

IBM

Tech giant IBM (IBM) recently reported mixed results for the second quarter. While revenue fell short of expectations, the company’s earnings smashed estimates due to improved gross margin.

IBM is transforming its business and focusing on growth areas like hybrid cloud computing and artificial intelligence. It generated free cash flow of over $3.4 billion and paid dividends worth $3 billion in the first six months of 2023. IBM expects to deliver free cash flow of $10.5 billion for the full year.

Earlier this year, IBM increased its quarterly dividend by a modest 0.6% to $1.66, marking the 28th consecutive year of dividend hikes. IBM’s dividend yield is about 4.6%.

Following the results, Stifel analyst David Grossman increased his price target for IBM stock to $144 from $140 and reiterated a buy rating. The analyst slightly raised his 2023 and 2024 estimates based on the organic and inorganic growth in the company’s software business.

“IBM has been a source of funds YTD and remains most appropriate for the dividend sensitive value investor looking for a defensive market hedge,” said Grossman.

Grossman is ranked 389th among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 64% of the time, with each one delivering an average return of 14.4%. (See IBM Blogger Opinions & Sentiment on TipRanks)

Chord Energy

Next up is Chord Energy (CHRD), an oil and gas operator with assets in the Williston Basin. The company rewards shareholders through a quarterly base dividend, a variable dividend and share buybacks.

For the first quarter, Chord declared a total cash dividend of $3.22 per share, including a variable dividend of $1.97 per share.

RBC Capital analyst Scott Hanold sees the possibility of the company exceeding its 75% minimum shareholder payout if excess cash builds and no other accretive acquisition opportunities arise. Hanold expects Chord to declare a variable dividend of $0.15 per share for the second quarter, along with a base dividend of $1.25 per share and share buybacks in the range of $25 million to $30 million.    

Ahead of the upcoming results, Hanold lowered his Q2 2023 earnings per share and cash flow per share estimates due to lower benchmark commodity prices, wider price differentials, and lower production. He also reduced his price target for CHRD to $180 from $185 to reflect his new commodity price forecast. 

Nonetheless, Hanold is bullish on CHRD and reiterated a buy rating on the stock, saying, “The company’s balance sheet is strong and leverage is de-minimis, providing the opportunity to allocate a significant portion of FCF to shareholder returns.”

Hanold, who ranks 43rd out of more than 8,500 on Tipranks, has a success rate of 63% and each of his ratings has returned 21.4%, on average. (See Chord Energy Hedge Fund Trading Activity on TipRanks)     

Energy Transfer LP

Another RBC Capital analyst, Elvira Scotto, is bullish on dividend stock Energy Transfer (ET), a publicly traded limited partnership that operates a vast pipeline network spanning 41 U.S. states.

On July 25, Energy Transfer announced a quarterly cash distribution of $0.31 per common unit for the second quarter, marking a 0.8% increase compared to the first quarter of 2023. That brings the dividend yield to over 9%. The company is targeting a 3% to 5% growth in its annual distribution.

Heading into second-quarter results, Scotto expects the performance of midstream companies to be affected by lower commodity prices. Nonetheless, the analyst reiterated a buy rating on Energy Transfer stock with a price target of $17.

“We believe ET has one of the most attractive integrated asset bases across our midstream coverage universe and view ET as a compelling investment opportunity, trading at a discount to large cap peers on EV/EBITDA and at a FCF [free cash flow] yield of ~14%,” said Scotto.    

The analyst thinks that ET is well positioned to generate significant rise in cash flows, which, coupled with its solid balance sheet, could drive higher cash returns through increased distributions to unitholders.

Scotto holds the 53rd position among more than 8,500 analysts on TipRanks. Additionally, 65% of her ratings have been profitable, with an average return of 19.6%. (See Energy Transfer Stock Chart on TipRanks)   

EOG Resources

Another energy name this week is EOG Resources (EOG), a crude oil and natural gas exploration and production company. Last year, the company returned $5.1 billion through regular and special dividends, representing 67% of its free cash flow.  

For the first quarter of 2023, EOG declared a regular quarterly dividend of $0.825 per share, payable on July 31. Moreover, the company repurchased $310 million worth shares in Q1. EOG offers a forward dividend yield of about 2.6%.

Mizuho analyst Nitin Kumar recently revised his estimates for EOG ahead of its upcoming results, to reflect actual pricing and improving Delaware well productivity based on the data from his firm’s proprietary database. Kumar’s Q2 2023 volume estimates are biased toward the higher end of the outlook range.

The analyst projects that EOG will deliver free cash flow of $753 million in the second quarter, despite his expectation of a 10% fall in aggregate pricing compared to the first quarter.

“Compared to the base dividend burden of ~$484mm and over $5bn of cash on hand at March 31, the company should have excess cash to pursue buybacks opportunistically,” said Kumar, who reiterated a buy rating on EOG with a price target of $146.

Kumar ranks 111th among more than 8,500 analysts on TipRanks. His ratings have been profitable 69% of the time, delivering an average return of 22.5%. (See EOG Insider Trading Activity on TipRanks)  

Morgan Stanley

Finally, we will look at a dividend stock in the financial sector: Morgan Stanley (MS). Recently, the global financial services giant reported market-beating second-quarter results, as the strength in its wealth management division offset lower trading revenue.

Last month, Morgan Stanley announced that it will hike its quarterly dividend per share to $0.85 from $0.775, commencing with the dividend to be declared in the third quarter of 2023. With this hike, Morgan Stanley’s forward dividend yield stands at about 3.6%. The bank’s board also reauthorized a $20 billion multi-year share repurchase program, beginning in the third quarter of 2023.

The bank’s upbeat second-quarter results prompted BMO Capital analyst James Fotheringham to increase his forward estimates by 1% to 2% and raise his price target for MS stock to $103 from $100. The analyst reiterated a buy rating on the stock, noting that the wealth management division remains the “bright spot.”

“Following two lackluster quarters for capital markets, MS noted the emergence of ‘green shoots’ across its businesses, supportive of a near-term improvement in deal activity,” said Fotheringham.

Fotheringham holds the 215th position among more than 8,500 analysts on TipRanks. Additionally, 65% of his ratings have been profitable, with an average return of 12.4%. (See Morgan Stanley Financial Statements on TipRanks)

Source link

#Top #Wall #Street #analysts #upbeat #dividend #stocks

These non-tech stocks are ‘back from the dead.’ Here’s where we stand

Workers walk towards Halliburton Co. “sand castles” at an Anadarko Petroleum Corp. hydraulic fracturing (fracking) site north of Dacono, Colorado, U.S., on Tuesday, Aug. 12, 2014.

Jamie Schwaberow | Bloomberg | Getty Images

A number of Club stocks that were unloved on Wall Street earlier in the year have seen their fortunes rebound in recent months, including oilfield-services firm Halliburton (HAL) and industrial Caterpillar (CAT) — creating potential opportunities to lock in gains.  

Source link

#nontech #stocks #dead #Heres #stand

Jim Cramer’s top 10 things to watch in the stock market Tuesday

My top 10 things to watch Tuesday, May 2

1. DuPont (DD) delivers a first-quarter earnings beat Tuesday, with adjusted earnings-per-share (EPS) of 84 cents, compared with analysts’ forecasts of 80 cents per share. But the materials giant cut its full-year revenue forecast, sending shares nearly 5% lower in premarket trading. DuPont also says it’s agreed to buy Spectrum Plastics Group from AEA Investors for $1.75 billion, in a deal that should be immediately accretive.

2. Club holding Morgan Stanley (MS) is planning to cut 3,000 jobs in the bank’s second round of layoffs in six months, Reuters reported Monday.

3. Tesla (TSLA) raises prices on some models of its electric vehicles in the U.S., China, Japan and Canada. The news come after several rounds of price cuts earlier this year.

4. Citi calls SoFi Technologies‘ (SOFI) post-earnings sell-off “unwarranted,” while reiterating a buy rating and $10-per-share price target. Meanwhile, Wedbush downgrades SOFI to neutral from outperform and lowers its price target to $5 per share, from $8.

5. TD Cowen raises its price target on health insurer Humana (HUM) to $616 per share, from $581, while reiterating an outperform rating. The Club holding last week delivered a first-quarter earnings beat and raised its guidance.

6. Uber Technologies (UBER) reports a first-quarter revenue beat of $8.82 billion, ahead of analysts’ forecasts for $8.72 billion, sending the stock soaring by nearly 10% in premarket trading. The company reports an EPS loss of 8 cents, compared with expectations for a 9 cent-per-share loss, while guiding for gross bookings of $33 billion to $34 billion in the second quarter.

7. BP reports stronger-than-expected first-quarter profits on Tuesday, with its underlying replacement cost profit coming in at $4.96 billion on the back of strong oil-and-gas trading. The British oil major expects to deliver share buybacks totaling $4 billion for the year, at the lower end of its capital expenditure range of $14 billion to $18 billion. Shares of BP were down roughly 5% in premarket trading.

8. Morgan Stanley raises its price target on Exxon Mobil (XOM) to $122 per share, from $118, while reiterating an overweight rating on the stock. The bank cites the U.S. oil major’s record first-quarter profit, which it reported last Friday.

9. Bank of America raises its price target on Brinker International (EAT) to $33 per share, from $29, reflecting a higher market multiple. But the firm maintains its underperform, or sell, rating on EAT stock.

10. The CEO of International Business Machines Corp. (IBM), Arvind Krishna, said the company plans to pause hiring for back-office roles that could be replaced by artificial intelligence (AI) in the coming years. “I could easily see 30% [roughly 7,800 jobs] of that getting replaced by AI and automation over a five-year period,” Krishna told Bloomberg.

(See here for a full list of the stocks in Jim Cramer’s Charitable Trust.)

As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.

THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER.  NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB.  NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Source link

#Jim #Cramers #top #watch #stock #market #Tuesday

Stocks making the biggest moves premarket: United Airlines, Netflix, Morgan Stanley and more

Check out the companies making headlines before the bell.

United Airlines — The airline lost 0.9% in the premarket after it announced a net loss for the first quarter. United posted a loss of 63 cents per share, which is 10 cents smaller than the 73-cent estimated loss from analysts polled by Refinitiv. The company reported $11.43 billion in revenue, slightly above the $11.42 billion estimated. 

Interactive Brokers Group — Shares of the electronic broker were down 3.7% after the company reported a miss on earnings in the first quarter. The company posted earnings per share of $1.35, which fell below the $1.41 consensus estimate from analysts polled by Refinitiv.

Netflix – Shares of the streaming giant fell more than 2% after the company reported mixed results on the delayed rollout of its crackdown on password-sharing, which was originally scheduled for the first quarter. Revenue came in slightly below the analyst consensus from Refinitiv, although earnings topped estimates.

Western Alliance – Shares of the beaten-down regional bank jumped more than 20% in premarket trading after Western Alliance said its deposits have been rebounding in April after declining 11% in the first quarter. Wedbush upgraded the stock to outperform after Western Alliance’s quarterly report despite the bank’s net income falling more than 50% from the previous quarter.

Travelers — The insurance stock added more than 3% before the bell after beating Wall Street’s expectations on both the top and bottom lines. The Dow Jones Industrial Average component reported adjusted earnings of $4.11 a share on $9.40 billion in net premiums.

Intel — Shares were down almost 2% after the semiconductor manufacturer announced it would be discontinuing its bitcoin mining chip series, Blockscale, after just a year of production. 

Abbott Laboratories — The medical device company advanced 2.8% after beating top- and bottom-line expectations and reaffirming guidance. The company reported $1.03 in earnings per share on revenue of $9.75 billion for the first quarter, while analysts polled by FactSet anticipated 99 cents in per-share earnings on $9.67 billion in revenue. The company said it still expects full-year adjusted earnings per share to come in between $4.30 and $4.50, in line with the $4.39 consensus estimate of analysts. 

U.S. Bancorp — Shares of the bank were up 1.7% after it announced an earnings and revenue beat for the first quarter. U.S. Bancorp posted $1.16 earnings per share and revenue of $7.18 billion. Analysts polled by Refinitiv had estimated per-share earnings of $1.12 and revenue of $7.12 billion. Meanwhile, the bank reported its quarter-end deposits were down 3.7% to $505.3 billion. 

Rivian Automotive — The electric-vehicle maker slipped about 2% after being downgraded by RBC Capital Markets to sector perform from outperform. The Wall Street firm remains constructive on the longer-term outlook for the stock, but sees limited catalysts to accelerate profitability in the near term. It also slashed its price target in half, to $14 from $28 per share.

ASML Holding – Shares of the chipmaker lost 2.6% in early morning trading after the company reported net bookings for the first quarter were down 46% year-over-year on “mixed signals” from customers as they work through inventory. The shares fell despite ASML reporting an earnings beat for the quarter.

Boeing — Shares of the industial rgiant dipped 0.6% in premarket after CEO Dave Calhoun said that a flaw detected in some of its 737 Max planes won’t hinder its supply chain plans for increased production of its bestselling jetliner this year. The company disclosed a flaw with some of its 737 Max planes last week and said it was likely to delay deliveries.

Morgan Stanley  — Shares were down 3.2% after the bank announced its quarterly earnings. The investment bank and wealth manager posted earnings per share of $1.70 for the first quarter, greater than the $1.62 estimate from analysts polled by Refinitiv. Overall revenue came in at $14.52 billion, above the $13.92 billion consensus estimate from Refinitiv as equities and fixed income trading units performed better than expected. One growth area was wealth management, where revenue increased by 11% from a year ago. The shares, which are outperforming most other banks this year, eased by 2% in early trading despite the results.

Ally Financial — The digital financial services company’s shares were down 1.3% after its first quarter earnings and revenue missed Wall Street’s expectations. Ally posted per-share earnings of 82 cents, while analysts had anticipated 86 cents per share, according to FactSet data. The bank’s adjusted total net revenue also fell below estimates, coming in at $2.05 billion versus the $2.07 billion consensus estimate from FactSet analysts.  

Intuitive Surgical — Shares jumped 8.1% after Intuitive Surgical reported an earnings and revenue beat. The company reported adjusted earnings per share of $1.23, topping against a consensus estimate of $1.20 per share, according to FactSet. Revenue grew 14% from the prior year, coming in at $1.70 billion, compared to estimates of $1.59 billion.

Tesla – Shares dropped more than 2% in the premarket after Tesla slashed prices on some of its Model Y and Model 3 electric vehicles in the U.S. The cuts come ahead of Tesla’s earnings report after the bell on Wednesday and is the sixth time the EV maker has lowered prices in the U.S. this year.

 Zions Bancorporation — The regional bank stock jumped nearly 4% in premarket before its earnings report after the bell Wednesday. Investors could be getting optimistic after its peer Western Alliance said in its first-quarter that deposits have stabilized since last month’s collapse of Silicon Valley Bank.

CDW — The IT company’s shares plunged 10.6% after it reported a weaker-than-expected preliminary quarterly earnings report. CDW issued quarterly revenue guidance of $5.1 billion, falling below the FactSet analysts’ consensus estimate of $5.58 billion. The company said it was significantly impacted by more cautious buying amid economic uncertainty. It also issued guidance for its full-year earnings to fall “modestly below” 2022 levels.

Citizens Financial Group — Shares were down almost 4% after the company’s first-quarter earnings disappointed investors. Citizens Financial’s earnings per share came in at $1, while analysts had estimated $1.13, according to Refinitiv data. The company’s revenue of $2.13 billion also came below analysts’ expectations of $2.14 billion. Citizens Financial reported a 4.7% decline in deposits to $172.2 billion.

— CNBC’s Alex Harring, Tanaya Macheel, John Melloy, Michelle Fox, Yun Li, Jesse Pound and Kristina Partsinevelos contributed reporting

Source link

#Stocks #making #biggest #moves #premarket #United #Airlines #Netflix #Morgan #Stanley

Morgan Stanley CEO says the bank’s push for more stable revenue streams has worked. It’s a key reason we own the stock

James Gorman, Chairman & CEO of Morgan Stanley, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 19th, 2023.. 

Adam Galica | CNBC

Morgan Stanley‘s (MS) multiyear transformation plan has been a success, CEO James Gorman said with pride Thursday — and, as shareholders, we see no reason to disagree.

Source link

#Morgan #Stanley #CEO #banks #push #stable #revenue #streams #worked #key #reason #stock