Breakfast News: Investors Tune In To Netflix
January 21, 2025
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Source: Image created by JesterAI.
1. Spoilers Ahead
Thanks to the return of Squid Game, NFL game screenings, WWE's premiere, and the Tyson-Paul boxing (or should that be sparring?) match, analysts are expecting strong results from Netflix's (NFLX 0.45%) Q4 earnings, after the closing bell. All 7 of the company's recs in Stock Advisor are beating the S&P 500, from 66% to 45,533%!
- "It's really the perfect setup for Netflix": Geetha Ranganathan, a senior analyst at Bloomberg, flagged the content lineup from the quarter as a key driver for likely higher subscriber retention, along with new additions.
- Ad revenue contribution small, but growing: Investors should watch out for signs of advertising growth, with the ad tier now having over 70 million global monthly active users. The company plans to launch its first-party ad server across all markets in 2025.
2. The Biggest Public REIT
Global logistics real estate giant Prologis (PLD -0.20%) releases earnings ahead of the opening bell. Trends in the market rent and signs of stabilizing occupancy levels will be key factors to watch for.
- The largest owner of warehouses and fulfillment centers globally: After several quarters of declining occupancy, guidance for the quarter was 96-96.5%. Meeting or missing this will indicate both changes in customer demand and also the amount of supply on the market.
- Currently a top-ranked stock in Dividend Investor: If the DI and Hidden Gems rec can build on last quarter's strong 44% cash rent growth, it'll provide confidence for income investors. Over the past three years, the annual dividend growth rate was 14.2%, with it currently having a dividend yield almost triple the S&P 500 average.
3. Trump Fuels Energy Push
President Trump rolled back offshore oil and gas leasing bans as part of his first day's executive orders, causing benchmark gas futures to swing both higher and lower as investors tried to digest the longer-term market impact.
- "Drill, baby, drill": By vowing the U.S. will embark on a new age of oil and gas exploration, the desire is clear to help ramp up fossil fuel production levels. The knock-on impact is for higher exports alongside rapid jobs growth, fueling economic growth.
- Tapping up EU partners: Higher liquid natural gas (LNG) production could help to ease supply constraints, particularly in the European Union where the recent cutting of Russian gas flows via Ukraine has been a factor in the price spike.
4. Next Up: Earnings From SA Recs
3M (MMM -0.09%) will release earnings ahead of the opening bell, with revenue expected to fall with lower consumer discretionary spending on hardline goods.
- Lagging the S&P 500 by 165% since 2017 recommendation: Some of the revenue weakness will have been offset by the Transportation and Electronic divisions, which is anticipated to have outperformed. Speaking of outperformance, Interactive Brokers (IBKR -2.24%) is expected to grow earnings by 19.1% versus the same quarter last year when it drops results today.
- Beating the S&P 500 by 899% and 359%: Twice recommended in Stock Advisor, high client activity due to the volatile markets is expected to help revenue increase. Investors will be keeping an eye on earnings from net interest income, particularly from margin lending to customers.
5. Foolish Fun
When will Netflix pay a dividend? Will it ever? The Motley Fool's chief investing officer Andy Cross puts his guess at 2027. Debate with friends and family, or become a member to hear what your fellow Fools are saying!
