• Trump inauguration, This autumn earnings season can be in focus within the holiday-shortened week forward.
• With its transformative enterprise mannequin and clear progress trajectory, Netflix appears like a compelling purchase for traders in search of high quality progress.
• Procter & Gamble faces operational challenges and tepid progress, making it much less interesting within the present market setting.
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U.S. shares rallied on Friday forward of the inauguration of Donald Trump, because the Dow Jones Industrial Common and the S&P 500 had their finest week because the November election amid indicators of easing inflation.
For the week, the Dow and S&P 500 superior 3.7% and a couple of.9%, respectively, whereas the tech-heavy Nasdaq Composite climbed 2.5%.
Supply: Investing.com
The week forward is predicted to be one other eventful one as traders proceed to gauge the outlook for the financial system and rates of interest.
U.S. markets can be closed Monday for the Martin Luther King vacation. President-elect Trump’s inauguration additionally can be Monday, with the incoming president anticipated to subject a flurry of day one government orders.
Supply: Investing.com
In the meantime, the fourth quarter earnings season shifts into excessive gear, with stories anticipated from a number of high-profile firms, together with Netflix (NASDAQ:NFLX), American Categorical (NYSE:AXP), Procter & Gamble (NYSE:PG), Johnson & Johnson (NYSE:JNJ), Verizon (NYSE:VZ), GE Aerospace (NYSE:GE), 3M Firm (NYSE:MMM), United Airways (NASDAQ:UAL), and American Airways (NASDAQ:AAL).
Bitcoin and cryptocurrencies may also be intently watched.
No matter which course the market goes, under I spotlight one inventory more likely to be in demand and one other which may see contemporary draw back. Bear in mind although, my timeframe is only for the week forward, Monday, January 20 – Friday, January 24.
For traders seeking to allocate capital this week, Netflix stands out as a robust progress alternative. The streaming big’s shift to promoting, stay occasions, and monetization of standard content material like ‘Squid Recreation’ are important tailwinds that would propel the inventory greater within the week forward.
The Los Gatos, California-based Web tv community is scheduled to launch its fourth-quarter replace after the U.S. market closes on Tuesday at 4:00PM ET. A name with co-CEO’s Ted Sarandos and Greg Peters is ready for five:00PM ET.
Market members anticipate a large swing in NFLX inventory after the print drops, in response to the choices market, with a attainable implied transfer of almost 9% in both course. The inventory rose 8.8% after the final earnings report got here out in mid-October.
Supply: InvestingPro
Revenue estimates have been revised upward 27 instances within the final 90 days, reflecting rising confidence amongst analysts. Solely 4 downward revisions have been famous, underscoring Wall Avenue’s bullish sentiment towards the leisure powerhouse.
Netflix is seen incomes $4.21 per share, representing a staggering 99% enhance from the prior yr. In the meantime, income is forecast to extend 15% year-over-year to $10.1 billion.
The corporate has shifted its focus from pure subscriber progress to prioritizing working margins and income enlargement. This pivot features a strong promoting mannequin, which is changing into a cornerstone of its progress technique.
On the content material entrance, the blockbuster launch of ‘Squid Recreation Season 2’ and different high-profile tasks ensures a gradual stream of engagement. Netflix can be venturing into stay occasions, together with NFL video games and boxing matches, increasing its attraction to a broader viewers.
NFLX inventory ended at $858.10 final Friday. At present ranges, Netflix has a market cap of $366.8 billion. Shares are down 3.7% to start out 2025 after scoring an annual achieve of 83% final yr.
Supply: Investing.com
It’s value mentioning that Netflix has an incredible InvestingPro Monetary Well being Rating of three.1/5.0, reflecting its sturdy financials, strong progress prospects, and progressive methods.
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Alternatively, Procter & Gamble faces operational challenges and tepid progress, making it much less enticing within the present market setting. The worldwide shopper merchandise firm is scheduled to report its fiscal second quarter earnings report earlier than the inventory market opens on Wednesday at 6:55AM ET.
The anticipated transfer within the choices market is about 3.4% up or down. Shares fell 1.6% after the final earnings report got here out in October.
Underscoring a number of challenges dealing with Procter & Gamble, 18 out of the 19 analysts surveyed by InvestingPro reduce their gross sales estimates forward of the print, citing smooth shopper demand and a difficult outlook.
Supply: InvestingPro
P&G is seen incomes $1.86 per share, growing simply 1.1% from EPS of $1.84 within the year-ago interval. In the meantime, income is forecast to inch up 2.2% year-over-year to $21.6 billion. These modest progress projections mirror growing challenges for the corporate.
The buyer items big lately confronted operational disruptions, together with a ransomware assault on considered one of its transport distributors. The assault may weigh on distribution effectivity and harm margins within the quick time period.
Furthermore, rising competitors in key markets and inflationary pressures on uncooked supplies are anticipated to restrict profitability.
As such, CEO Jon Moeller could strike a cautious tone and provides smooth steering to mirror provide chain disruptions and weakening margins.
PG inventory closed final Friday’s session at $161.13, not removed from its lowest stage since April 2024. At its present valuation, the Cincinnati-based shopper items firm has a market cap of $379.5 billion. Shares are down 3.8% to start out the brand new yr.
Supply: Investing.com
Though P&G stays a dominant participant within the shopper items sector with sturdy manufacturers like Tide and Gillette, its progress is slowing, and the inventory seems absolutely valued. Buying and selling at a ahead price-to-earnings (P/E) ratio of 23.7, the shares could not provide a lot upside at present ranges.
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Disclosure: On the time of writing, I’m lengthy on the S&P 500, and the Nasdaq 100 by way of the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Belief ETF (QQQ). I’m additionally lengthy on the Invesco Prime QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I commonly rebalance my portfolio of particular person shares and ETFs primarily based on ongoing danger evaluation of each the macroeconomic setting and corporations’ financials.
The views mentioned on this article are solely the opinion of the creator and shouldn’t be taken as funding recommendation.
Observe Jesse Cohen on X/Twitter @JesseCohenInv for extra inventory market evaluation and perception.
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