SUPERNEWS

Macro

Earnings Week: Netflix, United, and Chip Stocks Eye Big Moves

Nearly 40 S&P 500 companies to report earnings, spotlighting tech and financial sectors amid high volatility expectations.

By Alex P. Chase

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4/15, 13:57 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
ASML Holding N.V. - New York Registry Shares
Broadcom Inc.
Blackstone Inc.
Citizens Financial Group, Inc.
Comerica Incorporated
Fifth Third Bancorp
Nasdaq, Inc.
Netflix, Inc.
D/B/A Royal Caribbean Cruises Ltd.
Taiwan Semiconductor Manufacturing Company Ltd.
United Airlines Holdings, Inc.
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Key Takeaway

  • Netflix and United Airlines lead with the highest expected post-earnings volatility at 7.6%, amidst a tough market backdrop.
  • Semiconductor stocks ASML and Taiwan Semiconductor are in focus, potentially moving 5.6%-5.8% on earnings, driven by AI demand.
  • Financial firms Blackstone, Citizens Financial, Fifth Third, and Comerica also poised for notable post-earnings swings this week.

Earnings Season Volatility

The stock market is bracing for heightened volatility as nearly 40 S&P 500 companies are set to report their earnings this week. This follows a period of significant downturns, with the Dow and S&P 500 experiencing their worst weekly performances since the previous year, primarily due to persistent inflation concerns and a shaky start to the first-quarter earnings season. Analysts had initially projected more than 3% earnings growth for S&P 500 companies, marking the potential third consecutive quarter of earnings expansion. High expectations are set for companies like Netflix and United Airlines, which are anticipated to see the most substantial post-earnings movements, with an expected change of 7.6% according to FactSet.

Spotlight on Key Sectors

The technology and financial sectors are under the microscope, with companies such as ASML, Taiwan Semiconductor, and Blackstone expected to make significant moves post-earnings. ASML and Taiwan Semiconductor, both benefiting from robust AI-driven demand for chips, have seen their shares surge by nearly 28% and over 37%, respectively, this year. On the financial front, Blackstone, Citizens Financial, Fifth Third, and Comerica are also poised for notable post-earnings volatility. This comes amid a backdrop of sticky inflation and growing uncertainty around the Federal Reserve's interest rate trajectory, which could influence the broader market sentiment and the performance of these stocks.

Analysts' Expectations and Market Sentiment

Despite the market's rough start to the second quarter, analysts remain optimistic about the potential for earnings growth. Goldman Sachs has identified several stocks with out-of-consensus upside estimates, including Royal Caribbean Cruises, Nasdaq, and Broadcom, highlighting the opportunities for tactical investments based on expected earnings reports. These selections are based on various factors, including travel demand, fintech growth, and leadership in technology sectors, which could drive significant price movements post-earnings. The options market's implied moves for these stocks further underscore the anticipated volatility and potential for gains.

Street Views

  • Bryan Kraft, Deutsche Bank (Neutral on Netflix):

    "We believe that in order for the stock to appreciate further, consensus estimates for 2024-2025 will need to be revised higher, as we believe a lot is already priced in at these valuation level."

  • Vijay Shilpiekandula, Dilation Capital (Bullish on ASML):

    "ASML is an 'R&D powerhouse' and 'high-quality business' that looks attractive on a growth-adjusted basis compared to peers."