As the third-quarter earnings season enters full swing, investors are keenly watching prominent stocks poised for significant changes following their financial disclosures. This week, several major companies, including United Airlines and Goldman Sachs, will be making their earnings reports public. Although Columbus Day has caused some companies to close their doors, the week promises to be action-packed for stock market enthusiasts. Utilizing data from the options markets, investors can gauge potential movements that could follow these earnings releases. Let’s delve into some prominent stocks that are predicted to experience notable swings based on their earnings results.
Leading the charge of anticipated volatility is Walgreens Boots Alliance, a company grappling with remarkable downward pressure on its stock price. Analysts expect Walgreens’ shares to fluctuate up or down by approximately 12.2% following its upcoming earnings report on Tuesday. This expectation stems from the pharmacy chain’s challenging performance, as its stock has plummeted by over 60% throughout 2024, positioning it toward its third consecutive year in the red and marking the eighth negative year in the past nine.
Furthermore, Walgreens’ recent exclusion from the Dow Jones Industrial Average, replaced by a competitor like Amazon, underscores its tough trajectory. Despite the bleak outlook, analysts remain cautiously optimistic. The average forecast among experts maintains a hold rating, albeit with some suggesting a potential rebound—pointing to a price target indicating that shares could recover significantly, potentially rising more than 13%.
Moving down the list, Alcoa is scheduled to report its earnings on Wednesday, and it is expected to see a slightly lesser but still meaningful implied move of around 7%. Showing a robust upward trend, Alcoa’s stock has surged by more than 20% so far in 2024, setting it on course for its first positive year in three years. Analysts have taken note of this shift and are bullish, emphasizing a buy rating along with a price target that hints at an additional 7% climb.
With Bank of America recently upgrading its stance from neutral to buy, Alcoa appears to be a promising investment as it rides the wave of strong aluminum prices. Analyst Lawson Winder highlighted that the stock offers an appealing route for investors looking to capitalize on high commodity prices, further indicating a potential favorable outlook.
As the week unfolds, attention will pivot toward Netflix’s earnings report scheduled for Thursday. The options market forecasts a potential swing in Netflix’s share price of about 6.8%, reflective of heightened investor interest in the entertainment giant. Notably, Netflix has seen its stock price soar approximately 48% this year, continuing a substantial upward trajectory that already marked a 65% increase in the preceding year.
Oppenheimer analyst Jason Helfstein’s optimistic outlook signals confidence in Netflix’s ability to maintain its premiere position in the streaming industry. With a raised price target ahead of the earnings report, Helfstein suggests that Netflix will continue to thrive, owing to its exceptional capacity for producing engaging content and monetizing it more effectively than its competition. The overall sentiment from analysts points toward a buy rating, indicating a strong belief in Netflix’s ongoing growth potential.
In summation, this earnings week brings a promising opportunity for investors to assess the shifting landscapes of big-name stocks like Walgreens, Alcoa, and Netflix. While Walgreens faces substantial challenges, Alcoa is on an upward trend and Netflix seems well-positioned for continued success in the competitive streaming landscape. Monitoring these stocks could provide key insights into market sentiment and help investors make more informed decisions. As analysts and traders prepare for what lies ahead, the fluctuations that are to come carry the potential for both risks and opportunities in the stock market.