In the dynamic arena of stock market fluctuations, anticipation brews as earnings reports loom on the horizon this week, promising potential upheavals. Despite Monday’s Columbus Day closures across several firms, the third-quarter reporting season is revving up, with notable contenders such as United Airlines and Goldman Sachs set to take center stage.
To pinpoint stocks ripe for substantial movement, CNBC Pro delved into the labyrinth of options market activities, isolating those most likely to swing dramatically post-earnings announcement. Chief among these is Walgreens, forecast to experience the most significant upheaval, with projections suggesting a staggering jump or fall of 12.2%. This retail pharmacy titan, divulging its earnings on Tuesday, has been embroiled in a tumultuous trajectory, plummeting over 60% this current year. This dismal performance could mark its third consecutive year in the red, alarmingly contributing to a sobering pattern of eight negative years out of the last nine. Earlier this year, Walgreens Boot Alliance was supplanted by Amazon in the Dow Jones Industrial Average, a symbolic nod to its struggles. While most analysts from LSEG maintain a “hold” position, there’s cautious optimism swirling around, as projections hint at a rebound—a price target positing a potential recovery of over 13%.
Shifting the lens, aluminum powerhouse Alcoa is poised to release its earnings on Wednesday, attracting scrutiny with an anticipated movement of 7% in either direction. The company’s stock has soared more than 20% in 2024, aiming to achieve its first positive year in three seasons. Echoing the optimism, analysts polled by LSEG advocate a “buy” call, with suggested price targets indicating an upward climb of 7%. Indicative of the bullish sentiment, Bank of America recently elevated its stance on Alcoa, transitioning from neutral to a buy recommendation, with analyst Lawson Winder highlighting the stock as a compelling avenue to leverage the rising tide of aluminum prices.
As the week unfolds, all eyes will eventually pivot to Netflix, which is set to unveil its earnings on Thursday. The options market is braced for a possible fluctuation of 6.8% in the tech giant’s shares. Remarkably, Netflix has soared approximately 48% this year, riding the coattails of a previous year’s impressive rally of about 65%. Foreseeing a robust report, Jason Helfstein of Oppenheimer has proactively raised his price target for the streaming service, signifying palpable optimism. “We believe NFLX’s dominance will continue, given its clear advantage in producing high-engagement content and monetizing that content more effectively than peers,” he articulated in a note to clients. Helfstein’s outperform rating reflects a larger consensus on Wall Street, where the average analyst’s outlook from LSEG leans towards a buy, speculating that shares may stabilize around their current levels throughout the coming year.
With such intricate threads of market dynamics weaving through the landscape, the upcoming earnings reports may herald significant adjustments in stock valuations, inviting investors to navigate the twists and turns with vigilance.
