Must-Watch Earnings Releases for Friday

NEW YORK ( TheStreet) -- These top five earnings releases before the weekend are all market-moving candidates.

I examine each one based on key metrics and provide an estimate on stocks I have crunched the numbers with.

MRK Chart MRK data by YCharts

Merck ( MRK)

Who They Are: Merck is a global pharmaceutical company. Its stock have an average daily trading volume of 19.1 million shares, and the company has a market capitalization of $132 billion.

52-Week High: $44.19

52-Week Low: $29.81

Float Short: 0.77%

Book Value: $18.03

Price-to-Book Ratio: 2.31

Merck is anticipated to report better second-quarter earnings before the market opens on July 27, 2012. The current consensus estimate is for earnings of $1.01 a share, an improvement of 6 cents (5.9%) from 95 cents during the same quarter last year.

More than half the analysts covering Merck rate it a buy or strong buy. Twelve of the 18 analysts covering the stock give it a buy rating, while six rate it a hold and none rate it a sell. The stock has appreciated 20% in the last year, and the average analyst target price is $44.75.

The trailing 12-month price-to-earnings ratio is 11.3. Investors are receiving $1.68 in dividends for a fat yield of 3.87%.

In the last month the stock has climbed 8%, and the shares have burned up the chart in 2012. The moving averages are in a bullish trend pattern that is just getting started. I am not a fan of Obamacare, but Merck is a winner as a result of the legislation, at least for now.

There are a couple of ways for an investor to mitigate risk going into earnings. One is to sell $44 strike call option against some or all shares owned in a covered-call strategy. I like the $45 August calls for 19 cents for an aggressive approach. The $44 strike can be sold for a more defensive posture.


Arch Coal ( ACI)

Who They Are: Arch Coal is engaged in the mining, processing and marketing of coal. Arch trades an average of 12.7 million shares per day and has a market cap of $1.3 billion. (Read my ACI article "Can 'Big Coal' Dig Out of Its Hole?")

52-Week High: $28.61

52-Week Low: $5.55

Book Value: $16.83

Float Short: 14.74%

Investors aren't expecting an improvement in earnings. On average, analysts expect a loss of 17 cents a share, vs. earnings per share of 44 cents a year ago.

Seven of 20 analysts now rate Arch Coal a strong buy, down from eight analysts a month ago. Shareholders have not been rewarded for their patience, as shares have fallen 78.4% in the last year, and the average analyst target price for ACI is $10.69.

The trailing 12-month P/E ratio is 8. Investors are receiving a dividend of 12 cents a share for a yield of 1.95%.

In the last month, the stock has climbed very slightly. Natural gas prices are moving higher, and if gas moves even higher and stays higher than the cost to produce electricity with coal, miners will benefit.

ACI Chart ACI data by YCharts


Chevron ( CVX)

Who They Are: Chevron is the fifth largest integrated energy company in the world. Chevron trades an average of 6.6 million shares per day and has a market cap of $215.4 billion.

52-Week Range: $89.88 to $111.19

Chevron is forecast to record a year-over-year earnings decline when it reports before the bell on Friday. The consensus estimate is for earnings of $3.23 a share, down 62 cents, or 16.1%, from $3.85 during the same period last year.

Of the 14 analysts rating the stock, 12 rate Chevron a buy or strong buy. The company has two holds, and no analysts recommend selling. The average analyst target price for Chevron is $123.25.

Weinstein Estimate: $3.30 or higher

The trailing 12-month price-to-earnings ratio is 8. Investors are receiving $3.60 a share in dividends for a yield of 3.3%. (Read my "5 Oversold Stocks Ready for a Bounce Higher" article.)

In the last month the stock performed well with a 8.7% percent increase.

In three of the last four quarters, Chevron beat earnings estimates, but it did miss once by a significant margin.

CVX Chart CVX data by YCharts


D.R. Horton ( DHI)

Who They Are: D.R. Horton is one of the largest homebuilders in the U.S. and trades an average of 8.2 million shares per day with a market cap of $6 billion.

52-Week Range: $8.45 to $18.90

Book Value: $8.48

Price-to-Book: 2.21

Float Short: 13.41%

Investors are hoping this company will post an earnings gain from last year when it reports earnings before the bell Friday. The average estimate from analysts is for EPS of 20 cents, an increase of 11 cents, or 55%, from 9 cents a year ago.

The stock has appreciated 55.6% in the last year, and the average analyst target price for D.R. Horton is $16.44.

The trailing 12-month price-to-earnings ratio is 42. Investors are receiving 15 cents in dividends for a yield of 0.79%.

Weinstein Estimate: 21 cents

In the last month the stock has really moved higher with a 15.1% increase.

DHI Chart DHI data by YCharts


Weyerhaeuser ( WY)

Who They Are: Weyerhaeuser grows and harvests timber. It trades an average of 5.7 million shares per day and has a market cap of $12.4 billion.

52-Week High: $23.65

52-Week Low: $15.25

Weyerhaeuser is anticipated to report good second-quarter earnings before the market opens on Friday. The consensus estimate is currently 10 cents a share, an improvement of 4 cents, or 40%, from 6 cents during the same period last year.

Three of 14 analysts now rate Weyerhaeuser a strong buy, down from four analysts a month ago. The stock has appreciated 4.6% in the last year, and the average analyst target price for Weyerhaeuser is $21.85.

The trailing twelve month price-to-earnings ratio is 67.8. Investors are receiving 60 cents a share in dividends for a yield of 2.6%.

In the last month the stock has really moved higher, with an 11.5% increase.

WY Chart WY data by YCharts

At the time of publication, Weinstein had no holdings of stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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