Earnings Previews: Coca-Cola, Prologis

With the first week of the March quarter earnings season in the rear-view mirror, we can look ahead to more reports next week.

Just a reminder that our preview of financial sector firms reporting after markets close Thursday or before they open Friday includes Morgan Stanley, Ally Financial, Citizens Financial, Bank of New York Mellon and State Street.

We also previewed two nonfinancial firms set to report earnings Friday morning: Alcoa and Kansas City Southern.

Here are previews of two companies reporting before markets open Monday morning.

Coca-Cola

For 2020, Coca-Cola Co. (NYSE: KO) posted a modest 2.5% share price increase, due largely to the lockdown of restaurants, sporting events and other large venues that serve the company’s beverages. The uncertainty about reopening is keeping the lid on investors’ enthusiasm for the shares, although rival PepsiCo’s Wednesday afternoon report has added some hope for the soft drink sellers.

Of 26 analysts covering the stock, 18 rate the shares a Buy or Strong Buy and the rest give the stock a Hold rating. The average 12-month price target on the stock is $57.22, and the high target is $67.00. At Thursday’s trading price of around $53.50, the upside potential to the average target is 7%, while the upside to the high target is nearly 26%.

Analysts expect the company to post first-quarter earnings per share (EPS) of $0.50, a penny lower than in the first quarter of last year. Revenue is tabbed at $8.55 billion, down less than 1% from last year’s revenue of $8.57 billion. Estimates for the full 2021 fiscal year call for EPS of $2.14 on sales of $36.69 billion, up 9.7% and 11%, respectively.

The stock currently trades at around 24.9 times expected 2021 EPS, 23.0 times estimated 2022 EPS and 21.5 times estimated 2023 earnings. Coca-Cola’s 52-week trading range is $43.20 to $54.93, and the company pays an annual dividend of $1.68 (yield of 3.16%). Coke is one of the 30 stocks included in the Dow Jones industrial average.

Prologis

Prologis Inc. (NYSE: PLD) is a real estate investment trust (REIT) that owns 984 million square feet of logistics real estate in 19 countries. The shares added about 15% last year and have jumped another 13% so far in 2021.

In a report issued last month, the firm said that the COVID-19 pandemic has forever altered the logistics real estate landscape. Further, “the long-term structural growth rate of logistics real estate has risen” and “location matters more than ever.” Thursday’s announced merger of two grocery-anchored shopping center owners underscores Prologis’s argument.

There are 18 analysts that cover Prologis, and 14 rate the stock as either Buy or Strong Buy. Three have assigned a Hold rating and one rates the stock at Sell. The average price target is $116.00, and shares traded in the noon hour Thursday at around $112, implying upside of about 3.6%. At the high target of $138, the implied upside on the stock is just over 23%.

Analysts expect the company to post first-quarter EPS of $0.41, about 41% below last year’s first-quarter figure of $0.71 per share. Revenue is estimated at $1.01 billion, up nearly 15% from last year’s $878.81 million. Estimates for the full 2021 fiscal year call for EPS of $1.74 on sales of $4.17 billion, down 13.4% and up 5%, respectively.

The stock currently trades at around 62.5 times expected 2021 EPS, 54.9 times estimated 2022 EPS and 49.4 times estimated 2023 earnings. The 52-week trading range is $80.12 to $112.37, and the company pays an annual dividend of $2.52 (yield of 2.30%).

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