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The earnings season starts to heat up with big reports due in from Goldman Sachs (NYSE:GS), Procter & Gamble (NYSE:PG), Travelers (NYSE:TRV) and Netflix (NASDAQ:NFLX). Overall, earnings for S&P 500 companies are forecast to be up more than 20% this quarter even with all the additional costs in the mix during the holiday period. Guidance updates are expected to vary widely depending on the ability of individual companies to battle through inflation pressures. The economic calendar in the week ahead features updates on housing starts, building permits, existing home sales and the Philadelphia Fed Index. It will be a quiet week for Fed officials with a blackout period in place ahead of the FOMC meeting set for January 26, but Treasury yields will still be watched closely with the 10-year Treasury yield standing at 1.79%.
Earnings spotlight: Wednesday, January 19 UnitedHealth (NYSE:UNH), Bank of America (NYSE:BAC), Procter & Gamble (PG), Morgan Stanley (NYSE:MS), U.S. Bancorp (NYSE:USB), United Airlines (NASDAQ:UAL) and Kinder Morgan (NYSE:KMI).
IPO watch: IPOs expected to start trading during the week include Verdant Earth Technologies Limited (VDNT) and Jupiter Neurosciences (JUNS) on January 18, Four Springs Capital Trust (FSPR) on January 20 and Samsara Vision (SMSA) on January 21. Notable IPO lockup expirations include Vtex (NYSE:VTEX), Zevai PBC (NYSE:ZVIA), Instructure (NYSE:INST), Couchbase (NASDAQ:BASE) and Ryan Specialty Group Holdings (NYSE:RYAN) on January 18, as well as Gambling.com Group Limited (NASDAQ:GAMB), Xponential Fitness (NYSE:XPOF), Caribou Biosciences (NASDAQ:CRBU), Cytek Biosciences (NASDAQ:CTKB) and Outbrain (NASDAQ:OB) on January 19. Across the Pacific Ocean, an operating subsidiary of JinkoSolar (NYSE:JKS) is expected to start trading Shanghai. The company plans to offer 2B shares in the offering, representing ~20% of shares outstanding, at a proposed price of five yuan per share, for estimated gross proceeds of 10B yuan, or ~$1.57B.
Projected dividend increases: Companies expected to boost their dividend payouts next week include Northern Trust (NASDAQ:NTRS) to $0.75 from $0.70, Fastenal (NASDAQ:FAST) to $0.30 from $0.28, CMS Energy (NYSE:CMS) to $0.465 from $0.435, ONE Gas (NYSE:OGS) to $0.62 from $0.58, Alliant Energy (NASDAQ:LNT) to $0.4275 from $0.4025, Pacific Premier Bancorp (NASDAQ:PPBI) to $0.35 from $0.33, Graham Holdings (NYSE:GHC) to $1.57 from $1.51 and First Hawaiian (NASDAQ:FHB) to $0.27 from $0.26.
Netflix earnings preview: Analysts expect Netflix (NFLX) to report revenue of $7.7B and earnings per share of $0.82 when the streamer heads into the earnings confessional on January 20. The report could see some disappointing subscriber growth numbers with download trends reported to have been down in December across all regions. UBS thinks net subscriber additions accelerated in Q4 but will come in below management’s guidance mark. Working in its favor, Netflix raised pricing in select countries in Q4, including Mexico, Argentina, Italy and Spain. Closer to home, Netflix plans to raise subscription prices in the U.S. by $1.50 per month. Looking at the current quarter, the content slate is strong with Ozark and Bridgerton returning. Morgan Stanley thinks Netflix can continue to ramp its 20% EBIT margins and substantial free cash flow this year. “The debate from here concerns the long-term margin potential and the implication of that on valuation,” updates the firm. On the conference call, look for color on profitability expectations. Netflix said last quarter said that it anticipates being free cash flow positive on an annual basis in 2022 and beyond. Moness Crespi throws out an interesting wildcard on Netflix ahead of the big report. “Given Wall Street’s concerns that Netflix will fall short of its 4Q:21 paid global streaming net add guidance of 8.50 million, we believe it is timely for the company to consider shelving this metric altogether, one that was useful in the younger days of the service but has since become more of burden than a benefit,” advises the firm.
Corporate events: FTC Solar (NASDAQ:FTCI) holds a business insights call on January 18 and 23andMe (NASDAQ:ME) holds its first R&D Day. Also keep an eye on Astra Space (NASDAQ:ASTR) with the company scheduled to launch six CubeSats into orbit. Cardiff Oncology (NASDAQ:CRDF) also holds a conference call to discuss drug data. Two SPAC deals go to vote on January 20 with Vistas Media Acquisition (NASDAQ:VMAC) shareholders voting on the Anghami business combination and Power & Digital Infrastructure (NASDAQ:XPDI) shareholders voting on the Core Scientific deal. On January 20, Conn’s (NASDAQ:CONN) holds a virtual Investor Day that could reset expectations on the retailer. Check out Seeking Alpha’s Catalyst Watch for more details events that could swing shares prices.
Sundance: The annual Sundance Film Festival has an investing twist this year with Liquid Media Group Ltd. (NASDAQ:YVR) planning to launch its first blockchain film. The company hopes to show off blockchain approach which is designed to enable independent producers to participate in the benefits of blockchain including community engagement and owner-controlled distribution and monetization opportunities of blockchain technology. Shares of YVR trade near the low end of their 52-week range.
Annual meetings: Costco (NASDAQ:COST) holds its annual meeting on January 20.
Barron’s mentions: A roundtable of investing heavyweights calls out their favorite investment picks of the year with inflation and post-COVID recovery in mind. Deere (NYSE:DE), Fiserv (NASDAQ:FISV), Adobe (NASDAQ:ADBE), Clarion Partners Real Estate Income (MUTF:CPREX), Franklin High Yield Tax-Free Income (MUTF:FHYVX) and Global X US Infrastructure Development (BATS:PAVE) are some of the more intriguing selections. Overall, Mario Gabelli says the consumer and the industrial sector will keep the economy humming, and expects a big year for the auto industry. Meanwhile, Sonal Desai warns that the bond market is pricing in maybe 150 basis points [1.5 percentage points] of rate hikes over a two-year period, which is noted to not be consistent with the inflation outlook or the Fed’s own dot plot. Angi (NASDAQ:ANGI) also attracts a positive writeup this week with growth exploding and Take-Two Interactive (NASDAQ:TTWO) is defended with the company said to be playing the long game.
Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital
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