What to ex­pect when Boe­ing and Visa re­port this week

Financial Mirror (Cyprus) - - FRONT PAGE - By Chris Lange

Two of the top five Dow stocks have re­ported this week, push­ing the Dow Jones In­dus­trial Av­er­age again to record highs and nearly half of the way to 24,000. The Dow only reached 23,000 about a week ago and is mak­ing short work of reach­ing an­other mile­stone.

Most of the rally in 2017 has been re­in­forced by strong earn­ings, with the likes of IBM and Unit­edHealth pro­pel­ling the av­er­age higher last week. Now, 3M and Cater­pil­lar are adding more fuel to fire with in­cred­i­ble third-quar­ter re­ports.

Com­ing Wed­nes­day, an­other two of these top five are re­port­ing, with Boe­ing Co. (NYSE: BA) and Visa Inc. (NYSE: V) to re­lease earn­ings be­fore the mar­kets open. Boe­ing has been by far and away the top Dow stock of 2017 with its shares up about 70% year to date, with the next high­est Dow com­po­nent, Cater­pil­lar, up just be­low 50%. Visa takes the third spot with its shares up nearly 40%.

Need­less to say, the Dow has been on an ab­so­lute tear this year and with the way that earn­ings have been go­ing so far, 24,000 might be com­ing much sooner than an­tic­i­pated.

Con­sen­sus es­ti­mates from Thom­son Reuters call­ing for Boe­ing to have $2.66 in earn­ings per share (EPS) and $23.9 bln in rev­enue. The same pe­riod of last year re­port­edly had EPS of $3.51 and $23.9 bln in rev­enue.

Ear­lier this month, Boe­ing an­nounced that it de­liv­ered 202 com­mer­cial jets in the third quar­ter, well above the 169 it de­liv­ered in the first quar­ter and the 183 the com­pany de­liv­ered in the sec­ond quar­ter. For the first three quar­ters of the year, Boe­ing has de­liv­ered 554 com­mer­cial pas­sen­ger air­planes.

At that time, the com­pany also signed an agree­ment to ac­quire Aurora Flight Sciences Corp., a firm that spe­cialises in au­ton­o­mous sys­tems and elec­tric propul­sion sys­tems. The terms were not dis­closed, and Aurora will op­er­ate un­der Boe­ing’s en­gi­neer­ing, test and tech­nol­ogy group.

In ad­di­tion to de­liv­er­ing 202 air­planes last quar­ter, Boe­ing also added 127 new or­ders to its back­log.

Shares of Boe­ing were last seen down up 1.5% at $266.14 on Tues­day, with a con­sen­sus an­a­lyst price tar­get of $276.41 and a 52-week trad­ing range of $136.72 to $266.73.

Thom­son Reuters has con­sen­sus es­ti­mates of $0.85 in EPS and rev­enue of $4.63 bln for Visa. In the fis­cal fourthquar­ter of last year, Visa posted $0.78 in EPS and $4.26 bln in rev­enue.

Visa’s rally over the course of this year has been slow and steady, with the stock not tak­ing any ma­jor steps back. For the most part, Visa’s earn­ings have re­in­forced its per­for­mance as well and mak­ing the case for these all-time highs.

A grow­ing trend in on­line pay­ment pro­cess­ing has been a strong tail­wind for the stock since it part­nered with PayPal back in July 2016.

In its most re­cent earn­ings re­port, Visa saw pay­ments vol­ume growth, on a con­stant dol­lar ba­sis up 38% year over year. The com­pany pro­cessed a to­tal of 28.5 bln trans­ac­tions dur­ing the quar­ter, a 44% in­crease. To­tal pro­cessed trans­ac­tions growth was 13%, in­clu­sive of Europe, which was in­cluded in prior-year re­sults.

We might ex­pect to see sim­i­lar numbers com­ing in this re­port, although the year-over-year numbers could be even bet­ter fol­low­ing the PayPal part­ner­ship.

Shares of Visa were re­cently trad­ing at $108.14. The stock has a 52-week range of $75.17 to $109.26 and a con­sen­sus price tar­get of $117.69. (Source: 24/7 Wall St.com)

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