Netflix, Inc. (NFLX) Stock Forecasts

Summary

Monday Tee Up: Here Comes Tesla The flood of earnings continues this week, while the U.S. presidential election and the next Fed rate meeting draw nearer. Last week, the Dow Jones Industrial Average was higher by 1.0%, while the S&P 500 and the Nasdaq both gained 0.8%. For the year, the DJIA is higher by 15%, while the S&P 500 and the Nasdaq have both gained 23%. The earnings calendar is packed this week, with companies reporting from a wide range of sectors. On Tuesday, General Electric, General Motors, Lockheed Martin, 3M, Philip Morris, Texas Instruments, and Verizon all report. On Wednesday, Tesla, IBM, AT&T, Coca-Cola, and Boeing. On Thursday, Honeywell, UPS, American Airlines, Southwest Airlines, and Northrop Grumman. And on Friday, Colgate-Palmolive. So far, 71 of the S&P 500 companies (14%) have reported. Earnings are coming in 4% higher than in the prior-year quarter. That follows a strong 13% rise in earnings for 2Q. We expect 5%-7% growth in earnings this quarter. For full year, we forecast high single-digit growth, so roughly a 7%-9% gain. For 3Q, we expect Information Technology, Communication Services, and Healthcare to be the sectors that shine. On the economic calendar, Wednesday features Existing Home Sales and the Fed Beige Book. Thursday brings New Home Sales, while Friday includes Durable Goods and Consumer Sentiment. Argus Chief Economist Chris Graja is highlighting Durable Goods orders as his 'Call of the Week.' Chris expects September Durable Goods to fall 4.5% year over year, this based on a tough year-ago comparison. Durable Goods orders, which include the huge-ticket civilian aircraft and defense categories, are probably the most volatile of the 40 or so economic indicators we forecast and will have increasing importance to our outlook in the coming months. In the 2Q GDP report, the Equipment category jumped 9.8% and added one half point to the economy's 3% growth. Equipment could be a strong performer again in 3Q based on the Atlanta Fed's GDP Nowcast. We also analyze shipments of nondefense capital goods excluding aircrafts, this for a less-volatile look at core trends in manufacturing. We expect more modest growth in 4Q and in 2025. Last week, Retail Sales came in higher than expected at 0.4% for September compared to expectations of 0.3%, and 0.1% the month before. Removing gas sales (which were down sharply as the price of gas declined) and car sales (which were flat), overall Retail Sales were even higher, rising 0.7%. Food remains a category on which people are spending a disproportionate amount of money. Both Food and Beverage Stores and Food Services a