Wall Street’s Week Ahead: Netflix, Inc. (NFLX), Bank of America Corp (BAC), General Electric Company (GE), Advanced Micro Devices, Inc. (AMD)


Although most are already fixated on the terrible market performance so far in 2016, companies have yet to report December quarter earnings. This week, investors are waiting to hear how Netflix, Inc. (NASDAQ:NFLX), Bank of America Corp (NYSE:BAC), General Electric Company (NYSE:GE), and Advanced Micro Devices, Inc. (NASDAQ:AMD) finished up 2015. Here is what investors should watch for in the following reports:

 

Netflix, Inc.

Netflix is set to release its Q4/2015 earnings on Tuesday, January 19 after market close. Analysts are expecting the company to post revenues of $1.83 billion and GAAP earnings per share of $0.02, compared to the same quarter of last year when the company posted revenue of $1.48 billion and EPS of $0.10.

Analysts will be looking for strong U.S. subscription growth figures, as the company posted disappointing growth in the last quarter, which caused shares to take a tumble. Mark Mahaney of RBC Capital is optimistic on subscriber growth levels, pointing to a recent survey that highlighted record usage levels for the company, coming in ahead of YouTube and Amazon. The company garnered a lot of positive media attention thanks to several new exclusive series, such as Narcos and Making a Murderer.

Looking forward, international growth will also be in the spotlight as the company announced the international launch of its TV network to over 130 countries, as well as the addition of several new languages, earlier this month. However, these figures will not be reflected in this week’s earnings report.

According to TipRanks’ statistics, out of the 15 analysts who have rated the company in the past 3 months, 9 gave a Buy rating, 1 gave a Sell rating, while 5 remain on the sidelines. The average 12-month price target for the stock is $123.17, marking an 18% upside from where shares last closed.

NFLX Consensus

 

Bank of America Corp

Bank of America will release its Q4/15 earnings on Tuesday, January 19 before market open. Analysts expect the company to post revenue of $19.86 billion and earnings of $0.26 per share, compared to the same quarter of last year in which the company posted revenue of $18.95 billion and EPS of $0.25.

For this upcoming report, analysts will focus on how the recent fed rate hike announcement will affect the company. Many note that this is a compelling entry point to buy shares before the June rate hike, as the stock is close to its 52-week low. This year, Bank of America was able clean up its mess after 7 years of turmoil stemming from the 2008 financial crisis. As a result, the bank can now focus on moving forwards as opposed to damage control.

Another noted positive is the cost-cutting initiatives implemented in the past few years, resulting in last quarter’s increased efficiency ratio, prompting analysts’ predictions for future growth. Highlights from this past quarter include the announced redemption of $2 billion worth of trust preferred securities as well as the declaration of dividends on its preferred stock.

According to TipRanks’ statistics, 5 analysts have rated the company in the past 3 months with a Buy rating. The average 12-month price target for the stock is $19.60, marking a 35% increase from where shares last closed.

BAC Consensus

 

General Electric Company

GE will release its Q4/2015 earnings on Friday, January 22 before market open. Analysts are expecting the company to post revenues of $35.99 billion and earnings of $0.49 per share, compared to the same quarter of last year in which the company posted revenue of $42 billion and EPS of $0.56.

This past quarter, the company announced updates regarding the divestiture of GE Capital. The company sold these assets in an effort to reduce risk, debt, and return excess capital back to the company. Other quarter highlights include its announced construction of a power plant in Saudi Arabia, its deal with Accenture to deploy a 15,000 pipeline network, and a $5.4 billion appliance deal with Haier.

According to TipRanks’ statistics, out of the 10 analysts who have rated the company in the past 3 months, 8 gave a Buy rating while 2 remain on the sidelines. The average 12-month price target for the stock is $32.56, marking a 14% upside from where shares last closed.

GE Consensus

 

Advanced Micro Devices, Inc.

AMD is set to post its Q4/15 earnings on Tuesday, January 19 after market close. Analysts estimate the company will post non-GAAP revenues of $954.74 million for the quarter and a loss per share of ($0.10), compared to the same quarter of last year in which the company posted non-GAAP revenues of $1.24 billion and a loss per share of ($0.47).

This quarter, the company suffered from falling share prices as the Semiconductor Industry Association reported a 3.5% y/y decrease in November semi-conductor sales. Overall, the industry is suffering from low demand marked by a shift to smartphones and tablets, and away from desktops and laptops. Although the company is trying to adapt to this change by developing more advanced chips for the Internet of Things industry, analysts are lukewarm about AMD. One reason is heavy competition from Nvidia and Intel, especially regarding their increased R&D expenses relative to AMD.

Following the CES, analyst Matt Ramsay of Canaccord weighed in on the company and commented on its efforts to diversify. On January 12, 2016, the analyst reiterated a Hold rating though increased his price target to $2.40 from $2.00. He stated, “Overall, we believe AMD’s diversification strategy continues to show gradual progress and a refreshed roadmap could position the company for more defensible long term sales.”

According to TipRanks’ statistics, 3 analysts have rated the company in the last 3 months. One analyst gave a Buy rating while the other 2 are neutral. The average 12-month price target for the stock is $3.30, marking a 62% upside from where shares last closed.

AMD Consensus