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Q4 Earnings Season Scorecard and Analyst Reports for Exxon, AbbVie & Caterpillar

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Sheraz Mian
·7 min read
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Tuesday, February 9, 2021
 

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time take on the ongoing Q4 earnings season, in addition to featuring new research reports on 16 major stocks, including Exxon Mobil Corporation (XOM), AbbVie Inc. (ABBV) and Caterpillar Inc. (CAT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
 

You can see all of today’s research reports here >>>
 

Q4 Earnings Season Scorecard (As of Feb. 9th)

Including all of this morning's results, we now have Q4 reports from 315 S&P 500 members or 63% of the index's total membership. Total earnings for these companies are up +4.7% from the same period last year on +3% higher revenues, with 80.6% beating EPS estimates and 79% beating revenue estimates.

This is a better showing relative to what we saw from the same group of 315 index members in the first three quarters of 2020.

Looking at Q4 as a whole, combining the actual results from these 315 index members with estimates for the still-to-come companies, total earnings are on track to be up +2.2% from the same period last year on +2.5% higher revenues. This would follow the back-to-back declines in the first three quarters of 2020, primarily reflecting the Covid impact on corporate profitability.

The tone and substance of guidance and management commentary remains positive, which is helping push estimates for the current (2021 Q1) and coming quarters higher. Total S&P 500 earnings for 2021 Q1 are expected to be up +17% from the same period last year on +4.6% higher revenues. The current +17% earnings growth in Q1 is up from +12.6% at the start of January and +11.7% in early December 2020.  

Shares of Exxon Mobil have gained +17% in the last six months against the Zacks Oil and Gas - Integrated - International industry’s gain of +11.1% on the back of an improving commodity-price environment. The Zacks analyst believes that ExxonMobil’s bellwether status in the energy space, optimal integrated capital structure that has historically produced industry-leading returns and management’s track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play.
 

Notably, the company estimates gross recoverable resource of nearly 9 billion oil-equivalent barrels from offshore Guyana discoveries. Moreover, ExxonMobil can combat the coronavirus pandemic-induced volatile crude pricing environment since it can rely on its strong balance sheet. However, lower refining margin has been hurting the firm’s downstream operations.
 

(You can read the full research report on Exxon Mobil here >>>)
 

AbbVie shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+12.8% vs. +2.6%), banking on the company’s key drug, Humira that continues to see strong demand trends in the United States. Moreover, AbbVie has been successful in expanding labels of its cancer drugs, Imbruvica and Venclexta. It has an impressive late-stage pipeline. Its two new immunology drugs Skyrizi and Rinvoq, have performed beyond expectations in 2020.
 

However, sales erosion due to direct biosimilar competition to Humira in international markets is a big headwind. Also, the decline in HCV drug Mavyret’s sales is a concern. Nonetheless, estimates have gone up slightly ahead of Q4 earnings. AbbVie has a positive record of earnings surprise in the recent quarters.
 

(You can read the full research report on AbbVie here >>>)
 

Shares of Caterpillar have gained +47% over the past year against the Zacks Manufacturing - Construction and Mining industry’s gain of +46.6%. In fact, Caterpillar expects first-quarter 2021 results to reflect stronger year-over-year sales to users and dealer restocking. The Zacks analyst believes that growth in the first-quarter 2021 will be led by Construction Industries. Margins are expected to improve sequentially in the ongoing quarter aided by the company’s cost control efforts despite a headwind of around $225 million due to reinstatement of incentive compensation.
 

Overall in 2021, Caterpillar’s results are expected to improve aided by strong demand in China, pickup in manufacturing activity, strength in residential construction in the United States, strong construction demand in Brazil as well as better mining fundamentals. However, heavy construction and quarry and aggregate markets remain uncertain.
 

(You can read the full research report on Caterpillar here >>>)
 

Other noteworthy reports we are featuring today include The Walt Disney Company (DIS), Deere & Company (DE) and MetLife, Inc. (MET).
 

More Stock News: This Is Bigger than the iPhone!
 

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
 

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
 

Click here for the 4 trades >>
 

Sheraz Mian
 

Director of Research
 

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

ExxonMobil (XOM) Banks on Guyana Discoveries, Refining Weak

AbbVie's (ABBV) Pipeline Solid; Skyrizi, Rinvoq Shine

Cost Control to Aid Caterpillar (CAT) as Few Markets Ail

Featured Reports

Innovations Aid Textron (TXT), Low Jet Demand Hurts Revenues

Per the Zacks analyst, new product launch will enable Textron to capture more shares in the market.

Onto Innovation (ONTO) Rides on 5G Momentum Amid Competition

Per the Zacks analyst, Onto Innovation is well positioned to benefit from market strength in memory and radio frequency communications for 5G handsets along with the acceptance of new products.

Business Restructuring, Solid Balance Sheet Aid MetLife (MET)

Per the Zacks analyst, separation of many low return businesses and acquisition of targeted business have enabled focus on core areas; its strong capital position aids strategic investments.

Demand for Life-Science Assets aid Alexandria's (ARE) growth

Per the Zacks analyst, strong fundamentals in the life-science industry are driving demand for Alexandria's premium properties, though a large development pipeline escalates various risks.

NVR (NVR) Rides on Strong Demand & Backlog, High Cost Hurt

Per the Zacks analyst, NVR is likely to gain from robust demand for new homes and a strong order backlog.

Cost Control Efforts to Buoy Deere (DE), High Debt a Woe

Per the Zacks analyst, Deere will likely gain from cost-reduction initiatives, growing U.S farm income as well as acquisitions despite higher debt levels.

Dividends & Buybacks Aid Trinity (TRN), Railcar Demand Ails

The Zacks analyst is optimistic about Trinity's efforts to reward its investors. However, Coronavirus-led woes are denting the company's railcar demand.

New Upgrades

Align Technology (ALGN) Rides on Strong Clear Aligners Sale

The Zacks analyst is upbeat about the robust sales of Align Technology's Invisalign clear aligners amid the pandemic. Continued adoption of the company's digital platform also buoys optimism.

Higher Methanol Prices, Geismar Plants Aid Methanex (MEOH)

Per the Zacks analyst, Methanex will gain from strong production at its Geismar facilities. Higher methanol prices will also drive its margins.

Pilgrim's Pride (PPC) Gains From Robust European Operations

Per the Zacks analyst, Pilgrim's Pride is gaining from higher sales in European operations for a while now. Notably, during third-quarter sales in the region surged 63.4% year over year.

New Downgrades

United Natural (UNFI) Troubled by High COVID-19 Related Costs

Per the Zacks analyst, high COVID-19 related costs are a worry for United Natural. The company saw high operating cost of about $20 million in first quarter due to pandemic-led woes and other factors.

Movie Deferrals & Theme Park Closure Hurts Disney (DIS)

Per the Zacks analyst, coronavirus-led delay in movie releases, closed theme parks and a debt-ridden balance sheet hinders Disney's growth.

Ligand's (LGND) Overdependence on Partners Raises Concern

Per the Zacks analyst, Ligand is highly dependent on its partners for revenues that pays royalties on sales of drugs developed using the company's Captisol technology.


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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
MetLife, Inc. (MET) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Deere & Company (DE) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
AbbVie Inc. (ABBV) : Free Stock Analysis Report
 
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