Investing

Earnings Previews: Baker Hughes, Netflix, NextEra Energy, United Airlines, Verizon

Netflix

Earlier this month, Netflix Inc. (NASDAQ: NFLX) posted a new 52-week high on the strength of a South Korean production of a dystopian future called “Squid Game.” Citing company data it was able to review, Bloomberg said the show will create almost $900 million in value for Netflix. Even better news for the company is that its third season of the thriller “You” has dethroned “Squid Game” to take over the top spot on the U.S. streaming charts. “Squid Game” began its run in mid-September, so it will have some impact on third-quarter results when Netflix reports after markets close Tuesday.

While analysts are unanimous in their evaluations of Netflix, 33 of 44 rate the stock a Buy or Strong Buy and another six rate the shares a Hold. At a price of around $632.00, the upside potential based on a median price target of $650 is 2.8%. At the high price target of $780, the upside potential is 23.4%.

Third-quarter revenue is forecast at $7.48 billion, up 1.9% sequentially and 16% year over year. Adjusted EPS are forecast at $2.56, down nearly 14% sequentially but up 47% year over year. For the full fiscal year, analysts currently expect to see EPS of $1.13, up nearly 74%, on sales of $29.66 billion, nearly 19% higher.

Netflix shares trade at 59.7 times expected 2021 EPS, 48.3 times estimated 2022 earnings and 36.9 times estimated 2023 earnings. The stock’s 52-week range is $463.41 to $646.84. Netflix does not pay a dividend, but the share price jumped about 19% over the past 12 months, including a 23% increase since mid-August.

NextEra Energy

Shares of regulated electricity company NextEra Energy Inc. (NYSE: NEE) have risen by about 9% over the past 12 months. The Florida-based utility is already the world’s largest producer of electricity using solar and wind energy, and recently it reported a backlog of some 16,700 megawatts of signed contracts. Given the recent attention to ESG stocks and funds as perhaps more than a little greenwash, NextEra stands out even more. The company reports third-quarter results before the opening bell on Wednesday.

None of the 22 ratings on NextEra stock is lower than Hold. Of the total, 16 brokerages rate the stock a Buy or Strong Buy. At a price of around $81.10, the upside potential based on a median price target of $90.50 is about 11.6%. At the high price target of $102.80, the implied gain is nearly 27%.

Third-quarter revenue is forecast to come in at $5.35 billion, up 36.3% sequentially and 11.7% year over year. Adjusted EPS are forecast to be flat sequentially at $0.71 and up about 6% year over year. For the full fiscal year, current estimates call for EPS of $2.52, up 9.3%, on sales of $19.3 billion, up 7.25%.

NextEra shares trade at 32.2 times expected 2021 EPS, 29.6 times estimated 2022 earnings and 27.6 times estimated 2023 earnings. The stock’s 52-week range is $68.33 to $87.69, and NextEra pays an annual dividend of $1.54 (yield of 1.89%).

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