As the earnings season gains momentum, several high-profile stocks are anticipated to experience significant volatility due to their upcoming earnings releases. Even with the market partially closed on Columbus Day, investors remain on high alert for key financial disclosures from major players like United Airlines and Goldman Sachs. The analysis of potential stock movements, derived from options market activities, provides valuable insights into which companies could face the most substantial fluctuations post-earnings announcements.
Walgreens Boots Alliance (WBA) is at the forefront of market attention, with projections indicating that the stock could see movements as steep as 12.2% following its earnings report set for Tuesday. This dramatic potential shift comes in the context of a challenging year for Walgreens, with its stock experiencing a staggering decline of over 60% throughout 2024. If the company reports disappointing earnings, it would not only mark its third consecutive year of losses but also its eighth negative year in the last nine. This dismal performance has contributed to its removal from the Dow Jones Industrial Average earlier in the year, a move that has added pressure on its stock value.
Despite the gloomy outlook, some analysts remain cautiously optimistic. The consensus rating among professionals surveyed by LSEG leans towards a ‘hold,’ suggesting that some market players believe there is potential for a rebound. Their optimistic price target forecasts envision a recovery that could lift shares by more than 13%, a narrative that could shift significantly depending on the earnings report’s outcome.
Another stock making waves in the current earnings cycle is aluminum producer Alcoa. The company is set to unveil its financial results on Wednesday, and pre-earnings market indicators suggest an expected movement of around 7%. Alcoa has shown resilience thus far in 2024, witnessing a rally of over 20%. Should this positive performance continue, it may fortify the stock’s first annual gain in three years.
Recent analyst upgrades have injected a dose of optimism into Alcoa’s outlook. Bank of America has recently changed its rating on the stock from neutral to buy, indicating growing confidence among experts regarding the company’s performance against the backdrop of rising aluminum prices. Analysts believe that investing in Alcoa could offer a strategic opportunity for those looking to capitalize on favorable trends in the commodity market.
As the week progresses, much anticipation surrounds Netflix’s forthcoming earnings report, scheduled for Thursday. The options market suggests that the streaming giant’s shares could experience a notable shift of up to 6.8%. Netflix has already made substantial gains this year, soaring approximately 48%, following an impressive year in which it increased by around 65%. This positive trajectory has led to heightened expectations among investors as they eagerly await the latest financial results.
Projections from Wall Street analysts generally lean towards bullish sentiments. Oppenheimer analyst Jason Helfstein has recently raised his price target, reflecting confidence in Netflix’s capacity to maintain its leadership position amid fierce competition. Helfstein’s outlook emphasizes Netflix’s ongoing ability to produce high-quality, engaging content that resonates with viewers, setting it apart from competitors in the streaming space. The prevailing sentiment across the board among analysts positions Netflix favorably for sustaining its momentum moving forward.
The earnings reports from Walgreens, Alcoa, and Netflix present crucial opportunities for investors looking to navigate the uncertainties of market movements. As earnings season unfolds, the volatility that companies are expected to encounter is a double-edged sword. While downturns could result in substantial losses, the potential for recovery could present attractive entry points for savvy investors. As analysts assess these companies’ performances, the coming days promise to be pivotal in shaping their trajectories for the remainder of 2024. Whether these earnings reports yield positive surprises or further reveal the challenges these companies face, the responses in the stock market will be closely monitored by both casual and institutional investors alike.