Netflix Trading forecasts and signals

The market on the eveOn July 19, US stock markets closed in the red zone. The S&P 500 fell 1.59% to 4,258 points, while the Nasdaq fell 1.06% and the Dow Jones sank 2.09%. All sectors of the S&P 500 showed negative dynamics. The outsiders were energy companies (-3.59%), which reacted to the fall in oil prices after the decision of OPEC+ to increase production. The financial sector (-2.8%) was also under pressure amid a decline in the yield of treasuries. Investors are concerned about the increase in cases of infections with new strains of coronavirus.Company newsThe biotech company Cytokinetics (CYTK: +40.4%) has published positive results of the 2nd phase of trials of a drug for the treatment of hypertrophic cardiomyopathy.Zoom (ZM: -2.2%) is absorbing Five9 (FIVN) for $14.7 billion in shares at a premium of about 13% to Friday's closing price. The purpose of the transaction is to expand the business in the corporate segment.Tractor Supply (TSCO: -4.3%) reported better than investors ' expectations for the 2nd quarter, but the audience growth rate decreased compared to last year.We expectToday, there is a mixed dynamics on the world stock markets. Market participants assess the potential of the threat associated with an increase in the number of new cases of coronavirus infections against the background of the spread of the delta strain among the unvaccinated population. In particular, the incidence of COVID-19 in the United States has reached the levels of the beginning of July 2020. There is also an increase in hospitalizations and deaths. The CDC estimates that 97% of patients admitted to the hospital with a severe course of the disease were not vaccinated. At the same time, the current progress of the vaccination campaign should slow down the spread of the disease and reduce the number of severe cases. As a result, we believe that the re-introduction of serious quarantine restrictions that can put significant pressure on economic activity is unlikely at the moment.The investment community is also focused on bipartisan negotiations on an infrastructure package. Clarification of the financing methods continues ahead of the vote scheduled for Wednesday.Asian stock markets closed mainly in the red zone. Hong Kong's Hang Seng fell by 0.81%, Japan's Nikkei 225 fell by 0.96%, and China's CSI 300 sank by 0.09%. EuroStoxx 50 is growing by 1.16%.Risk appetite is weak. The yield of 10-year treasuries is reduced to 1.19%. The price for Brent futures drops to $69 per barrel. Gold is trading near the level of $1813 per troy ounce.We expect that the S&P 500 will hold the upcoming session in the range of 4250-4310 points.MacrostatisticsThe publication of significant macrostatistics is not planned for today.ReportsOn July 20, the giant of the video streaming market Netflix (NFLX) will publish a report for the second quarter. Investors predict revenue growth of the company by 19% y/y, to $7.3 billion, with an increase in EPS from $1.59 to $3.18. The reports are likely to show a slowdown in the growth of the number of subscribers. We believe that in accordance with the calculations of the company's management,the audience of the service expanded by 1-1.5 million over the past quarter. The focus of investors' attention will be the forecast for the next quarter. They expect that the user base of the service will expand by 5.5 million due to the activation of releases of new films and TV series. Investors will also be interested in management comments on the development of the gaming segment of the business. We are optimistic about the prospects for Netflix shares in the second half of the year.Sentiment IndexThe sentiment index from Freedom Finance remained at the level of 68 out of 100, reflecting the positive mood of investors ahead of the publication of the reports of the largest companies for the second quarter of 2021.Technical pictureTechnically, the S&P 500 continues to move in a long-term uptrend. On the eve of the broad market index accelerated the correction, breaking down the "rising wedge"figure. The RSI indicator fell below the neutral level, signaling the increasing strength of the "bears", but the short-term correction was realized, finding support at the level of the 50-day moving ...

They say there is nothing to do at the market in the summer. But not this year. Last week, the reporting season started in the United States. The reports of American companies for the second quarter promise to be interesting. They will summarize the results of the first half of the year and allow you to make forecasts for the second half of 2021.Why follow the reports?The publication of reports allows you to look at the reported company with new eyes — to see it "as for the first time", re-evaluate the prospects for its development and find new objects for investment.Many companies in their reports give forecasts not only for their activities, but also for the development of the sector as a whole, and also share important statistics. This information helps to analyze the prospects of the issuers themselves and the industries in which they operate. The main points that may affect the forecasts of companies this season are the prospects for the global economic recovery, the fiscal policy of the Joe Biden administration, and trade relations between the United States and China.For speculators, the reporting season is interesting with strong movements in the market. Since companies in the United States usually publish reports before or after trading, significant "gaps"often occur at the opening of the trading session after the release of the report.How did the reporting season start?The reporting season in the United States, as usual, began with the publication of the financial results of the banking sector. Five of the six largest banks reported significantly higher than expected and reduced the volume of loan reserves, signaling that the risks associated with the pandemic are receding.In addition to banks, some large companies from other sectors — for example, PepsiCo and Delta Air Lines-managed to report. And companies such as Nike, Micron Technology and Oracle generally report much earlier than the traditional reporting season.This week, investors are waiting for reports from Netflix, Philip Morris, Johnson & Johnson, Coca-Cola, Verizon, Intel, AT&T, Twitter and many other companies.What are the forecasts?According to statistics, in the last five years, in 75% of cases, the reporting of American companies exceeded analysts ' forecasts, and in the 1st quarter of this year, 86% of the reported issuers beat the expectations (this is the maximum level for five years). On the one hand, such high figures may indicate the strength of the US corporate sector, but there is a feeling that companies and analysts are deliberately making too conservative forecasts in order to give shares a boost to growth at the reporting release. From these positions, 85% is more frightening than encouraging figure.According to forecasts, in the second quarter, the percentage of companies whose financial results will be better than expected will be 77-80%. It is also predicted that the consolidated EPS of the S&P 500 index in the second quarter will show an increase of 63.6% y/y and 6.5% q/q.How will the reporting season affect the market?If this reporting season does not bring a big negative, we can expect further growth of the American stock market. If the reports are worse than expected, and the situation with the coronavirus pandemic worsens, or the Fed begins to curtail its stimulus policy, a correction may begin in the market.In general, there are 2-3 companies in each sector of the economy, whose reporting largely sets the tone for the dynamics of shares in the entire sector as a whole.Whose reports are of the greatest interest this week?  Netflix (NASDAQ: NFLX) On July 20, the second season of “The Witcher” may cause a new rally for the company's shares. The company is also entering the video game market: Netflix has hired Mike Verda, who was developing video games for Facebook's Oculus virtual reality headsets (NASDAQ: FB).Coca-Cola (NYSE: KO) On July 21, the main intrigue of this report is how much the company's sales will fall after the episode with Cristiano Ronaldo, who at one of the press conferences removed bottles of Coca-Cola from the table with the words "Drink water!".Johnson & Johnson (NYSE: JNJ) On July 21, investors will be watching with interest how the company's results were affected by the suspension of sales of its coronavirus vaccine in the United States due to concerns that this vaccination contributes to the formation of blood clots. Recall that in the 1st quarter, the company's profit from sales of the vaccine amounted to $100 million, that is, just over 2% of the total profit.Twitter (NYSE: TWTR) On July 22, Twitter launches a "blue" subscription. Twitter Blue allows you to set a delay of 30 seconds when publishing a message and correct typos before the tweet is published. The subscription also provides access to an improved bookmark system for saved tweets. The subscription price is $2.99 per month.American Airlines (NASDAQ: AAL) On July 22, American Airlines announced an improvement in its forecasts for the results of the second quarter. The airline's forecasts range from a net loss of $35 million to a net profit of $25 million for the quarter.American Express (NYSE: AXP) On July 23, the company is expected to present a strong report, as well as report a decrease in reserves to cover the risks associated with the coronavirus pandemic.How to analyze the reporting? Tips for investorsExamine the reporting calendar and select the reports that you will track. Study the company and the sector in which it operates in advance.Remember: buying shares before the report is released is a big risk, although the market can give you a good premium for your courage.Do not rush to buy paper immediately after the release of the report: study the figures and assess the company's prospects on the short, medium and long time horizon.Compare the published figures with the forecasts of the company itself and independent ...

The coronavirus has greatly affected businesses around the world. Some areas have gone into the shadows, while others, on the contrary, have become leaders. One of these industries is streaming TV, which entertained the public while there was a lockdown. Market participants who have considered investing in broadcasters are certainly considering Disney+ and Netflix.The background for these companies is that both businesses are growing. The difficulties faced by the House of Mickey Mouse with the closure of amusement parks due to quarantine measures to combat the coronavirus do not prevent investors today from focusing on the assumptions of positive profit growth of this entertainment titan.As the number of vaccinated people increases, theme parks open, and the Disney+ streaming platform increases the popularity of content, creators can count on significant profits. Netflix is also moving forward. In addition to video materials in the content, the company plans to create computer games.Let's see if it is possible to invest profitably in the securities of these companies now?Grown-up NetflixFor a long time, Netflix securities held strong positions and were considered profitable in the market. Their annual growth since 2002 has been on average about 40%. But now the company is at a new stage of "mature business". The key focus of the market, which includes, for example, the North American market, is now slowly growing. New subscribers are not very active: their increase over the past year is very small – less than 10%. But the company still has opportunities to enter global markets. Today, more than half of the buyers live here, although it is still far from 100% coverage of this market.As Hollywood studios and cable operators begin to restore their work in the media broadcasting market, the analyzed service is becoming more and more profitable.Perhaps this trend can lead to the fact that pay TV will fade into the background, and streaming platforms will become more popular among users. For investors, there is one main point-the new service is mainly broadcast in the United States, and accordingly Netflix is not so bad.The profitability of the business is growing as the number of new subscribers slows down. Netflix experts predict that the operating margin could grow from 18% to 20% this year, about 3% next year and 29% by 2024.It is already clear that Netflix is turning into a profitable enterprise. The streaming service's business model has pursued this goal since its inception. For this purpose, a high margin was formed, and the funds from the additional profit were added to the net profit. The increase in revenue can be achieved by changing the pricing policy, and not only by attracting new subscribers. This is already happening in America and, thus, determines the profitability of the company. In addition, the increase in prices will affect the increase in margins. Now it is unlikely that the issuer will achieve an increase in prices for its securities of 40%, but Netflix is still a strong leader in the streaming market.Disney RestorationLike other enterprises, Disney could not avoid the consequences of the epidemic. We all remember that cinemas, amusement parks and resorts were closed, and sports events were suspended. And even under these conditions, some parks have now restored their work and are accepting customers, although their work is still far from being fully implemented.This did not become a negative factor for investors, and when Disney+ appeared, the value of the company's securities became a record. Disney+ streaming events are Hulu, ESPN+, Star in the global market and Hotstar in the Indian television market. Disney predicted 60-90 million users of the Disney+ service by 2024, but they were able to make this figure faster – in one year. Now experts believe that this year the number of new customers will be 300-320 million.It is impressionable that Disney+ does not seek to develop in accordance with the original content. After streaming television was launched with the production program The Mandalorian, the company's management decided to switch to broadcasting not only its content, but also the production of Marvel, Star Wars, Pixar and other novelties. Disney is very confident in the streaming business, so it is ready to release two hits at the same time Black Widow and Cruella at the same time in cinemas. For a fee, they can be reviewed on Disney+.In the short term, streaming can be considered as the main engine of Disney's growth. It is important for depositors that there are opportunities for economic recovery, and when travel becomes the safety standard again, amusement parks are likely to pay off.Risks of companiesIn 2020, the entertainment industry has become fast-growing, especially after the COVID outbreak. As a result, the securities of the issuers presented in our material also increased. At the moment, the growth of vaccination of people has led to the fact that people from different countries prefer active recreation, and the possibility of subscribing to streaming programs is becoming less popular. It is likely that as the quarantine continues to decrease, subscribers may refuse to stream video, which is a negative factor for both companies.In the short term, the enterprises under consideration may suffer due to increased competition in the market, a reduction in the number of customers and delays in publishing content.Netflix and Disney are big entertainment companies, and both have good opportunities for a return on investment. Both companies are investing heavily in the development of their industry. Disney has an advantage over Netflix-theme parks and specialized retail outlets.If you think that Netflix can get a large part of the streaming market thanks to not yet some secret plans, choose Netflix papers.For those who are interested in companies with different profitable segments in their portfolio, we recommend taking a closer look at ...

On Wednesday, it was reported that Netflix has hired Mike Verda, a former vice president of Facebook, to head the video games division. The company's shares rose by 1.34% in the main trading session and added another 2.65% in the postmarket.What happenedAt the start of his career, Verdu founded his own software development company, later he sold it and switched to video games. He worked for such companies as Atari, Electronic Arts, Kabam, and oversaw various game franchises. At Electronic Arts, he was engaged in mobile video games, the division released such well-known projects as The Sims, Plants vs Zombies and Star Wars: Galaxy of Heroes. Verdu was the creative director of Zynga in the period 2009-2012.Netflix declined to comment officially, without confirming the fact of hiring Verdu. In the past, the company has already released games, but only as a marketing move, and not on a permanent basis — and in 2018, it categorically stated that it does not plan to engage in games at all. Nevertheless, rumors about Netflix's entry into the gaming business have been circulating — and it seems that they have finally come true.Netflix is trying to diversify its video streaming business in the face of growing competition from Disney, Amazon, Apple, AT&T. An online store was recently launched, but it will probably bring less revenue than game development.What elseFinanceNext week, on July 20, the company will report on the results of the second quarter of 2021. Netflix forecasts EPS of $3.16 with sales of $7.3 billion. Analysts had expected Netflix's earnings to be $2.68 per share on sales of $7.39 billion. A year earlier, Netflix's profit was $1.59 per share on sales of $6.15 billion.If there is a positive trend in the company's finances, then there is not a positive trend in the number of subscribers. Last quarter, Netflix attracted fewer customers than expected. In the second quarter, it forecasts only 1 million-against 4.4 million predicted by analysts. Weak results are easy to explain. First, the pandemic is a unique phenomenon that has given a huge boost to new connections. The current increase will be clearly less than last year. Secondly, many projects have been postponed, but are expected this year. This can contribute to the growth of the number of new subscribers and those who will renew their subscription.The company also expects that in 2021 the free cash flow will reach the break-even level, and in 2022 it will become positive. In the future, Netflix will be able to conduct a share buyback, which will be a good driver for growth, but this story is long-term.AwardsOn Tuesday, at the 73rd annual Emmy Awards, Netflix received 129 nominations, which is less than the record of 160 nominations set by it last year.In 2021, the company did not take the championship, becoming only the third. The first and second places went to Disney and AT&T, with 146 and 138 nominations, respectively.About childrenThe company also continues to increase children's content. On Wednesday, Netflix launched the Kids Top 10 program, which recommends content in children's profiles, taking into account its popularity in each country.This week, Netflix will begin sending parents a so - called "Children's Resume" - a newsletter that includes recommendations based on their children's favorite shows and movies, as well as other tips.Netflix and Universal Pictures from Comcast are also extending a multi-year deal for exclusive rights in the United States to the franchises of animated films "Minions" and "Puss in Boots". Now Netflix broadcasts other films of the film company, including "Despicable Me" and "The Grinch".Technical pictureThe growth of the last 2 trading sessions allowed us to close the gap down, which occurred at the end of April after the publication of the report. Now buyers are testing the resistance of $555, its overcoming from the bottom up will open the way to the next reference point of $566.But it is worth considering the RSI indicator: the weekly one does not yet report overbought, and the daily one is already entering this zone. There is still room for growth in the short term, but a correction may occur on the approach to $566.It can begin even earlier if the nearest resistance is not taken. The current risk is reduced to the point of $530, with a breakdown of the level from top to bottom, a test of the 21-day moving average around $520 may occur.The long-term outlook remains moderately positive. The imminent release of the financial report can support buyers at a short distance, then new goals will appear.Since the beginning of the year, Netflix shares have grown by only 1.3%, and over the past 12 months - by ...

Netflix shares are trying to close the gap down, which occurred in mid-April due to a mixed financial report. Let's analyze the latest events and the company's immediate prospects.Since the beginning of the year, Netflix shares have fallen by 0.9%, and over the past 12 months they have grown by only 8.7%. The first half of the year did not end on a positive note for the company, which was expected when the COVID-19 vaccine began to spread in the world. But the company is looking for new business opportunities that can become long-term growth drivers. Recent events The shares declined due to the weaker-than-expected dynamics of connecting new customers. In addition, the forecasts for the second quarter did not please investors.But many analysts remain positive about the future growth of Netflix customers — as new projects are being prepared, including those postponed due to the pandemic.Such analysts include Douglas Mitchelson of Credit Suisse. Last Friday, he upgraded his rating on the stock from "neutral" to "better than the market" with a target of $586. He estimates the prospects for the II and III quarters as uncertain, but expects the restoration of subscriptions by the IV quarter. His opinion is based on the premieres that will be released from August to December, as well as on the positive results of customer surveys, which called Netflix the best among all streaming services.On July 20, after the closing of the main trading session, Netflix will publish financial results for the second quarter of 2021.The company planned that only 1 million new customers would be attracted during this period. The negative forecast is already embedded in the quotes, and investors will look for drivers in the forecasts for the third quarter.On June 10, the company launched its online store Netflix.shop, where branded merch is sold. Netflix promises to regularly release clothes, toys and even household goods based on original TV series and cartoons. Potential sources of Netflix revenue The company is looking for new growth drivers and new sources of income in the future.The company adheres to the policy of not integrating advertising into its service, although it could be an excellent source of income.According to Hub Entertainment Research, a survey of 3,000 Americans showed that 58% of them are ready to use platforms with advertising if the subscription drops by $4-5. Recently, Netflix, on the contrary, increased the subscription fee. Some analysts believe that it is time for the management to change its approach.Another possible way to diversify is to enter the game market. Back in late May, The Information reported that the streaming pioneer was looking for a head of the gaming department. The possibility of creating a platform similar to Apple Arcade is being considered. There have been no changes on this topic yet. According to the publication, the company does not plan to add advertising to games. Analyst Targets Wall Street is still optimistic about stocks. 29 out of 45 recommendations — to buy, 6-to hold and only 4-to sell. The average target is $615.7, and they vary in the range of $340-1154. That is, on average, the shares have the potential to grow by about 16%.Technical pictureThis week, the quotes have approached the important resistance range of $545-550. It was not possible to overcome it and there was a rebound down. From the technical side, this is a positive reaction, since according to the daily RSI indicator, the shares are overheated.Today, the 21-day moving average is being tested on the premarket at the level of $530. If the price falls below, then in the short term, sellers may begin to storm the support of $525-523. And if these levels are passed from top to bottom, then we can talk about the possibility of a test of $510-500.On the weekly chart, the technical picture, on the contrary, only shows signs of recovery. It can be concluded that in the short term, quotes can be adjusted or form a sideways movement. Further, the upward trend may continue. After overcoming $550 from the bottom up, we can talk about the possibility of further growth to $555-566. Should I buy Netflix shares Right now, it is risky to enter a position because of a possible early correction, at the end of it you can look for entry points.Closer to the report date, volatility may increase — therefore, shares, at least, can be considered for speculative actions. By the end of the year, the company is still able to please not only customers with new series, but also investors with new peaks.Risks include a prolonged slowdown in new subscriptions, as well as a growing competitor in the person of Walt Disney. In general, the long-term outlook for stocks remains moderately ...

The bear market of 2020 did not last long, and the rise that took place after a strong market fall in March is called the strongest in history. Many analysts expect another phase of decline this year and believe that the market has broken away from the realities of the modern economy. Even today, we are seeing serious corrections in the market, but the growing volatility should not deter us from buying stocks. Rather, on the contrary, the fall gives a good opportunity to buy securities at a low price, which will result in a large profit in the long run. All the securities that we will consider are trading far from their highs, which means that there is a high chance of reaching these levels in the near future, so the question is: Where to invest money in 2021? Already solved! Peloton shares forecast for 2021Peloton is the largest interactive fitness platform in the world. The company generates revenue by selling innovative exercise equipment and subscribing to various classes and workouts. Sales have surged over the past three quarters, with fitness enthusiasts unable to attend gyms and forced to work out at home.Over the past year, Peloton has taken several steps to solidify its status as a fitness industry leader. Several new products were introduced, including treadmills and cheaper models of exercise bikes. The company has signed a deal with artist Beyonce to create exclusive music for its platform. It also acquired the commercial company Precor, which is also engaged in the production of exercise equipment. And more recently, Peloton management announced that the company will start selling its products in Australia, and an active partnership with Adidas begins. Peloton shares forecast for 2021 From a technical point of view, the price of Peloton shares in 2020 has increased significantly from the level of 17 to 170 dollars per share. However, now the quotes are being corrected and fell below the $100 level. In November last year, the price also fell below $95, but quite quickly the stock continued to rise. The current decline also looks like a good signal to enter the market. The nearest target for a rebound from an important support is the $140 level. And after the breakout of the $170 level by buyers, you can send the price above the $245 level. An aggressive deal is a purchase already at the current levels with a close stop below $90. If we consider the conservative option, then we should wait for the breakdown of the $120 level, this will indicate the completion of the formation of the "Double Bottom" reversal model in order to work out the pattern at the $143 level. Roku shares forecast for 2021Walt Disney and Netflix became the leading companies in online broadcasting during the pandemic. But Roku, which makes streaming devices, had its best stock gain in the past year, which was more than 450%. And the company is just beginning to expand the scope of its services. According to management, in 2020, Roku OS was the best smart TV operating system in the US, accounting for 38% of smart TVs sold. Despite the high sales of the devices, Roku actually gets a lot of revenue from advertising sales. Advertisers are increasingly abandoning traditional TV channels and moving to streaming platforms that offer more accurate ad targeting, and Roku is preparing to take the maximum share of these sales.  From a technical point of view, Roku's share price rose from $58 to $485 a share last year. Now we are seeing a correction, but the company's quotes were not allowed to fall below the $322 level. It is worth noting that the values of the RSI indicator fell below the level of 30 for the first time in a year, this indicates that the shares are oversold and another wave of growth may soon follow, as it was in March 2020. A strong signal for buyers will be a breakdown of the $377 level, such a price movement will indicate the end of the downward correction and the resumption of the bullish trend with the first target at $485. Palantir shares forecast for 2021Palantir is an American company that develops data analysis software for organizations. In simple terms, Palantir's specialty is big data business analytics. The company's main customers are intelligence agencies, investment banks and hedge funds. Previously, the company was called the most mysterious IT startup of our time. More than half of Palantir's business is carried out through government contracts. Some investors believe that this dependence of the company's business on only a few customers is a risk factor, and Palantir recognizes this. However, such annual state contracts can also be regarded as a sign of stability. After all, there is no reason to believe that the American authorities will immediately abandon the development of Palantir. The US government is still the company's biggest customer. Palantir shares forecast for 2021 From a technical point of view, Palantir shares are pushing back from the support area, which is located at the level of 22 dollars and 50 cents. This level was tested by the bears several times last year and there was also an attempt to break down in March of this year. In the first few weeks of trading after last year's IPO, there was no strong growth in the share price, but later the price was able to test the maximum at $45 per share. The current drop occurs within the descending channel, as soon as the quotes can rise above the $27 level, we can talk about the end of the downward correction. In this case, the target of the rise will be the level of $33. Already with the breakdown of the downward trend line on the RSI indicator, we can consider the price rise to the local maximum at $45 per share, is this not the best solution for the question of Where to invest money in ...