The Week in Preview: High Expectations for Southwest, Chevron, Broadcom

Southwest's long-term EPS growth forecast is 18.7%, which is better than the industry average, as well as competitor JetBlue (JBLU). Southwest's earnings multiple of 15x is less than the industry average and the trailing PE of 50.1. The First Call recommendation shifted from holding to buying LUV in the past 90 days. The mean price target is currently $15.69 a share. Shares have fallen from the 52-week high of $13.97 reached in May, and recently have met resistance from the 100-day moving average. Shares closed last week at $11.82.

Chevron highlighted its safety performance record at its annual meeting during its second quarter, and the California-based oil giant also boosted its quarterly dividend. Earnings for that period are expected to total $2.44 cents per share, an increase of 64.3% from the same period of last year. Revenue for the three months ended in June is expected to total $52.5 billion, or 30.6% more than a year ago. Thus far, the consensus forecast is for year-over-year EPS and revenue growth in the third quarter as well. Chevron's per-share earnings beat consensus estimates in two of the past three quarters, by 42 cents a share in the first quarter.

Chevron's long-term EPS growth forecast of 17.7% is better than that of rival Exxon Mobil (XOM), and its earnings multiple is 8x, which is less than the industry average. This dividend payer has accumulated cash on hand in recent quarters, and the consensus recommendation remains to buy CVX. The mean price target on the shares is $89.67. After reaching a 52-week high in May, shares fell near the 52-week low territory but have climbed back 8.8% in the past couple of weeks to $73.52 at Friday's close.

Analysts anticipate that Broadcom will post second-quarter earnings of 61 cents per share, up from 25 cents a year ago. During the three months that ended in June, Broadcom announced an acquisition and declared a quarterly dividend, and revenue for that period is expected to have jumped 52.6% to $1.6 billion. Analysts anticipate sequential and year-over-year growth of both EPS and revenue in the current quarter. Broadcom's earnings have topped analysts' expectations in the past five quarters, by as much as a dime per share.

Broadcom's long-term EPS growth forecast of 16.2% exceeds that of rival Texas Instruments (TXN). Though the earnings multiple is 15x, that's below the industry average. This dividend payer reports no long-term debt. Analysts on average recommend buying BRCM, and their mean price target is $38.93. At $37.76, shares are 5.9% higher than three months ago.

Other companies expected to report double-digit EPS growth this week include Ameriprise Financial (AMP), Barrick Gold (ABX), Cal-Maine Foods (CALM), Chicago Merchantile Exchange (CME), ConocoPhilips (COP), Dr Pepper Snapple Group (DPS), International Paper (IP), Newmont Mining (NEM), Occidental Petroleum (OXY), Panera Bread (PNRA), Potash Corp. of Saskatchewan (POT), and Wisconsin Energy Corp. (WEC).

Analysts anticipate that a number of companies reporting this week will announce profitable quarters, compared to year-ago losses. Among these are BorgWarner (BWA), CIT Group (CIT), Goodyear Tire & Rubber (GT), Motorola (MOT), Sunoco (SUN), United States Steel (X) and Weyerhaeuser (WY).

But of course not everything can be rosy. Amgen (AMGN), Comcast (CMCSA), Diebold (DBD), General Dynamics (GD), Merck (MRK) and Western Union (WU) are expected to report EPS that are about the same as a year ago, while aerospace and defense contractors Boeing (BA), Curtiss-Wright (CW), Lockheed Martin (LMT) and Raytheon (RTN) are expected to post smaller earnings than a year ago (unlike Northrop Grumman, mentioned above). AstraZeneca (AZN), Chiquita Brands (CQB), First Solar (FSLR) and Newell Rubbermaid (NWL) are seen posting declining earnings as well.

And analysts expect to see net losses from Eastman Kodak (EK), Martha Stewart Living Omnimedia (MSO), Office Depot (ODP), Sony (SNE) and Sprint Nextel (S). However, the losses are anticipated to be smaller than a year ago for all of these companies, except for Sprint.

Elsewhere on this week's economic calendar, look for the Federal Reserve's next Beige Book report of current economic conditions, due out Thursday. Also housing numbers are due: new home sales for June (Monday), the Case-Shiller Home Price Index for May and housing starts in June (both on Tuesday).