Earnings Previews: Ericsson, Netflix, Regions Financial, Schlumberger


Netflix Inc. (NASDAQ: NFLX) posted its 52-week high nearly one year ago. Since then, the stock price has dropped by nearly 36%. At its low last May, the shares were down about 65%. The company rolled out its ad-supported, low-priced tier in November, but the introduction was not a hit with consumers. While that has weighed on the stock, Netflix Chielf Operating Officer Greg Peters said recently that the company is satisfied with the subscription rate. That indicates that Netflix is focusing on a long game in which a low introductory price converts consumers to higher-cost options. Investors and analysts will be paying close attention to the company’s numbers here.

Of 43 analysts covering the stock, 25 have a Buy or Strong Buy rating, while another 18 rate the shares at Hold. At a price of around $326.20, the shares trade slightly above their median price target of $325.00. At the high price target of $405.00, the upside potential is about 24.2%.

Fourth-quarter revenue is forecast at $7.85 billion, down 1.0% sequentially and up 1.8% year over year. Adjusted EPS are forecast at $0.54, down 82.5% sequentially and 59.4% lower year over year. For the full 2022 fiscal year, analysts expect to see EPS of $10.37, down 7.8%, on sales of $31.6 billion, up 6.4%.

Netflix shares trade at 31.5 times expected 2022 EPS, 30.7 times estimated 2023 earnings of $10.62 and 23.6 times estimated 2024 earnings of $13.84 per share. The stock’s 52-week range is $162.71 to $526.64. Netflix does not pay a dividend. Total shareholder return for the past 12 months was negative 37.9%.

Regions Financial

Regions Financial Corp. (NYSE: RF) stock dropped about 11.7% of its value over the past year. Since posting a 52-week low in mid-July, however, the stock has added 24.5%. With a tangible book value at the end of the September quarter of around $7.20, the stock is trading at about three times that level. While that may be rich, it probably reflects the bank’s solid deposits and expected interest income. Regions also pays a good dividend that has increased by 25% since mid-2020.

Of the 27 analysts covering the bank, 14 have a Buy or Strong Buy rating and the others rate the stock at Hold. At a share price of around $22.40, the upside potential to a median price target of $24.00 is 7.1%. At the high price target of $29.00, the upside potential is 29.5%.

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