As the third quarter draws to a close, investors are gearing up for a week brimming with earnings reports from major companies. The potential for significant stock movements is high, particularly for well-known players like United Airlines and Goldman Sachs. Analysts and market enthusiasts are keenly observing which stocks might experience the most volatility following their earnings releases, especially in light of the upcoming company performance disclosures. This week, the options market will serve as a critical tool to gauge expected price swings for stocks, highlighting those that could see notable fluctuations in either direction.
One of the most closely watched stocks this week is Walgreens Boots Alliance, which is anticipated to see a substantial post-earnings move of around 12.2%. With its earnings report set for Tuesday, Walgreens finds itself in a precarious position. The pharmacy chain has faced a severe downturn, with stock values plummeting over 60% within the year. This grim trajectory positions Walgreens on track for its third consecutive year of losses, marking a troubling trend where eight out of the last nine years have ended negatively for the company.
Market analysts have suggested that despite these challenges, there might be a glimmer of hope for a rebound. The stock’s recent demotion from the Dow Jones Industrial Average has compounded its struggles, yet a hold rating from analysts indicates a cautious optimism for recovery. The projected price target reflects potential for an upward movement of over 13%, underscoring the notion that the market may be underestimating Walgreens’ capabilities moving forward.
Next on the radar is Alcoa, with its earnings announcement scheduled for Wednesday. The options market forecasts an implied movement of approximately 7%, suggesting that traders are bracing for a shift in the stock’s value post-report. Alcoa’s shares have recently gained over 20% this year, marking a significant turnaround after two years of declines. Analysts hold a generally favorable perspective on Alcoa, with many upgrading their recommendations to ‘buy,’ thanks to the company’s potential to benefit from rising aluminum prices.
Bank of America’s recent optimistic stance—upgrading Alcoa from neutral to buy—reflects a growing confidence in the company’s future. Analysts are capitalizing on the upward momentum, emphasizing that this stock could be a valuable asset for investors seeking exposure to the aluminum market’s strong recovery.
Midweek will see eyes turning toward Netflix as it prepares to release its earnings report on Thursday. The market anticipates a post-earnings move of about 6.8%. The streaming giant has already experienced a remarkable year, with shares surging nearly 48%, building on a phenomenal 65% increase from the previous year. Analysts, including Oppenheimer’s Jason Helfstein, are optimistic about Netflix’s potential, raising their price targets ahead of the earnings announcement.
Helfstein’s sentiments reflect a broader consensus on Wall Street regarding Netflix’s competitive edge in the entertainment landscape. With its knack for producing high-quality, engaging content, the company is seen as a leader capable of effectively monetizing its offerings. This optimistic forecast is complemented by a segment of analysts who maintain buy ratings, suggesting that the stock is well-positioned for continued success in the coming year.
The upcoming week of earnings reports promises to be pivotal for a number of high-profile stocks. With Walgreens, Alcoa, and Netflix leading the charge, investors are poised for potentially significant market movements. Each company faces its own set of challenges and opportunities, highlighting the importance of thorough analysis in navigating the stock market. As earnings results roll in, the reactions from investors and analysts alike will provide crucial insights into these companies’ futures, underscoring the dynamic and often unpredictable nature of the financial landscape.