Netflix Trading forecasts and signals

Streaming service Netflix Inc is going to charge from $7 to $9 per month for a new subscription plan with ad support, Bloomberg reports. The company plans to introduce a budget subscription option in the fourth quarter of 2022 in at least six regions. However, distribution in other regions of presence may have to wait until the beginning of next year. The issuer plans to sell about four minutes of commercials per hour for an ad-supported service, showing ads before and during the show.Rival Walt Disney (NYSE: DIS) announced in March that it would offer a cheaper, ad-supported version of its Disney+ streaming service later this year.Netflix's goal is to attract subscribers who are ready to watch shows with ads for almost half of the current tariff plan, which costs $15.49 per month. The ad-supported subscription plan came after the company reported a loss of about 200,000 subscribers in the first quarter of this year amid rising inflation. In July, the company selected Microsoft (NASDAQ: MSFT) as an ad-supported subscription plan technology and sales partner.Netflix shares at the auction on August 26 fell by 4.57% to $223.28 per share, and at the premarket on August 29 at the moment they are trading at $221 ...

Entertainment giant The Walt Disney reported a profit of $1.41 billion (77 cents per share) in the 3rd fiscal quarter, compared with $918 million (50 cents per share) a year earlier. Adjusted earnings were $1.09 per share versus 80 cents. Revenue for the reporting period increased from $17.02 billion to $21.504 billion.The number of Disney+ subscribers increased by 14.4 million and exceeded the Netflix streaming service. It also became known that the cost of a monthly subscription to the ad-free service will increase by 38% in December 2022, to $10.99.The revenue of the Disney Parks, Experiences and Products division increased by 70% to $7.39 billion, and the revenue of Disney Media and Entertainment Distribution increased by 11% to $14.11 billion.Shares of The Walt Disney Company on the NYSE on August 10 rose by 3.98%, to $ 112.43 per paper, and on the premarket on August 11, quotes are adding 7.26% at the moment, to $ 120.59 per ...

Trading on July 20 on American stock exchanges ended in positive territory. The S&P 500 index rose by 0.59%, reaching 3,960 points, the Nasdaq rose by 1.58%, the Dow Jones added 0.15%. Cyclical consumer goods manufacturers (+1.76%) and technology companies (+1.56%) became the growth leaders. The healthcare industries (-1.06%) and utilities (-1.36%) looked worse than the market.Company newsNetflix (NFLX: +7.35%) reported second-quarter earnings above consensus forecast. The number of subscribers of the streaming service decreased by 970 thousand, while their base was expected to decrease by 2 million. At the beginning of next year, management is planning a test launch of an ad-supported platform.Nasdaq Inc. (NDAQ: +6.10%) exceeded expectations for quarterly revenue and profit, demonstrating organic revenue growth in all business segments. On August 29, the company will hold a 3:1 split of shares.Baker Hughes (BKR: -8.26%) experienced an increase in net loss in the second quarter due to the negative impact of the termination of operations in Russia and the pressure of inflation.We expectHome sales on the secondary market in the United States in June fell by 5.4% mom and by 14.2% YoY, to 5.12 million, which was below the consensus of economists. There are signs of cooling in the residential real estate sector due to the tightening of the Fed's monetary policy. The resulting rise in mortgage rates and a record rise in the cost of housing led to the fact that demand for it fell to a minimum in 22 years. Coupled with expectations of passing the peak of inflation, this has weakened speculation about raising the Fed rate by 100 basis points (bp), and now investors expect another rise in the level by 75 bp in July.Also this Thursday, July 21, the ECB will make a decision on the key rate, announcing its increase from zero by 25 bps to curb inflation, which reached 8.6% per annum in June. At the same time, market participants are hedging risks in anticipation of a rate hike by 50 bps at once. Tightening monetary policy in the eurozone will support the euro exchange rate, which this month fell below $ 1. Against this background, the euro rose by 0.35% at the beginning of trading, which, in turn, partially limits the strengthening of the US currency and its pressure on the market. After a three-day decline, the dollar index was able to recover by 0.5% from local lows.The stock markets of the Asia-Pacific region ended trading on July 21 in different directions. Japan's Nikkei rose 0.44%, Hong Kong's Hang Seng lost 1.51%, China's CSI 300 declined 1.11%. EuroStoxx 50 has been losing 0.48% since the beginning of the session.Brent crude futures are trading at $106 per barrel. The price of gold is $1,681 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3890-3970 points. The positive results of corporate reports support the short-term growth of quotations.MacrostatisticsThe Philadelphia Federal Reserve's manufacturing activity index for July will be published today (forecast: -2.5 points after -3.3 a month earlier).Sentiment IndexThe sentiment index remains at 32 points.Technical pictureThe S&P 500 held above the upper limit of the descending channel and the 50-day moving average. The MACD does not signal a possible change in the current trend, the RSI is in the neutral zone. The nearest support for the S&P 500 is at the level of 3700 ...

The streaming service reported an increase in revenue in the 2nd quarter by 8.6% YoY, to $7.97 billion, although the consensus forecast was $8.03 billion. The GAAP EPS index rose from $2.97 to $3.20, beating expectations at $2.95. The management was satisfied with the operating marginality, which, in light of high inflation, is an item that is in the focus of investors' attention.Netflix's audience decreased from 221.64 million to 220.67 million during the reporting period. This is good news for investors, as the company's management predicted a loss of 2 million subscribers. A strong increase in the audience fell on Asian countries – 1.08 million, in Latin America, instead of the expected outflow, a symbolic increase of 10 thousand subscribers was recorded. In the next quarter, the company forecasts an increase in the number of subscribers by 1 million against the consensus forecast for an increase of 1.8 million.In order to spur audience growth, the company will struggle with the problem of using the same account by different households. According to management estimates, about 100 million households use the service through other people's accounts.In addition, Netflix management plans to launch a budget version of the subscription with advertising in some markets early next year. The initiative is evaluated positively, but the degree of predictability of future income from it remains extremely low. Netflix will share part of its advertising revenue with its recently selected partner, Microsoft.There is a fierce struggle for the audience in the streaming market, and the main players are: Apple (Apple TV+), Amazon (Amazon Prime Video), Walt Disney (Disney+, ESPN+, Hulu), Warner Bros. Discovery (HBO Max, discovery+).Netflix's report for the 2nd quarter of 2022 looks satisfactory. The oversold shares of the company reacted with growth against the background of the fact that the worst fears of investors did not come true. The view on the stock remains neutral, the target price has been lowered from $300 to ...

The session on July 18, the main American stock exchanges ended in the red. The S&P 500 declined by 0.84% to 3,831 points, the Dow Jones lost 0.69%, the Nasdaq declined by 0.81%. Energy companies closed in the black (+1.96%), producers of cyclical consumer goods (+0.22%), as well as raw materials and supplies (+0.22%). The healthcare industry turned out to be an outsider (-2.15%) on the eve of reports from medical equipment manufacturers.Company newsGoldman Sachs (GS: +2.5%) reported second quarter EPS better than consensus expectations. DPS increased by 25%.Apple (AAPL: -2.1%) plans to slow down the pace of hiring new employees and optimize the costs of some departments next year, fearing a recession.The takeover of Seagen (SGEN: -5.7%) by Merck (MRK: -2.76%) may be postponed until additional clinical trial results are available, according to the WSJ.We expectMarket participants are taking a wait-and-see attitude, weighing a number of "bullish" and "bearish" theses. The high probability of a 75 bps rate hike at the next Fed meeting is already being assessed as a positive factor. The thesis of reaching the peak of inflation is supported by the easing of tension in supply chains, an excess of stocks at retailers and a decline in commodity prices in the medium term. The risk of a decrease in corporate profits, which worried investors on the eve of the reporting season, has not yet been realized. According to FactSet, the cumulative profit growth of companies from the S&P 500, which have already submitted quarterly results, so far exceeds preliminary estimates. A positive signal for the markets came from China, where changes in monetary policy are expected to stimulate economic growth. However, concerns are caused by an increase in the number of COVID-19 infections in China. Negative factors are expectations of a recession and a decline in corporate profits in 2023, a still strong dollar and new statements by companies about slowing down or freezing hiring of new employees.Trading on July 19 on the sites of Southeast Asia ended mainly in the red zone. China's CSI 300 lost 0.54%, Hong Kong's Hang Seng declined 0.89%. The Japanese Nikkei added 0.65%. Eurostoxx 50 is adjusted by 0.32% since the opening of trading.Brent crude futures are quoted at $105.5 per barrel. Gold is trading at $1,711.3 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3780-3850 points.MacrostatisticsNo significant macro statistics are expected to be published today.Sentiment IndexThe sentiment index rose by one point to 30.Technical pictureThe closest support for the S&P 500 remains the range of 3600-3660 points. The RSI and MACD indicators signal an insufficient strength of the upward momentum. Yesterday, the benchmark bounced off the upper limit of the descending channel and is likely to continue to adjust in the coming trading sessions.ReportsNetflix, Inc. (NFLX) will present quarterly results on July 19 today after the market closes. The consensus forecast predicts revenue growth of 9.4% YoY, to $8.03 billion, with a decrease in GAAP EPS from $2.97 to $2.96. Note that market expectations look very cautious compared to the company's own guidance, which assumes revenue of $8.05 billion with EPS at $3.00. The latest data from Apptopia, which JPMorgan cites, indicate weak trends towards changing the audience of the streaming service in April-June, even despite the successful release of the new season of the popular TV series "Very Strange Things". We do not exclude that the net outflow of subscribers may slightly exceed the 2 million stipulated in the consensus. The reaction of investors to the streaming service's report will depend on whether the company's guidelines for the dynamics of subscribers for the third quarter coincide with market forecasts that suggest an expansion of the audience in the range of 1.5–1.9 million. These values look achievable, but there is no reason to hope for more optimistic forecasts yet. We believe that the expansion of the Netflix subscriber base constrains both the desire of consumers to optimize spending on entertainment, and competition from Apple (AAPL), Disney (DIS) and Warner Bros. Discovery (WBD). Special attention will be paid to management's comments on operating marginality due to the high rates of wage growth in the United ...

The session on July 15, the main American stock exchanges ended in the green zone. The S&P 500 rose 1.92% to 3,863 points, the Dow Jones rose 2.15%, the Nasdaq rose 1.79%. All 11 sectors of the S&P 500 closed in the black, representatives of the financial industry took the lead (+3.51%). Producers of non-cyclical consumer goods (+0.4%) and companies from the utilities segment (+0.2%) lagged behind the benchmark in terms of growth rates.Company newsAccording to the WSJ, Elliott Management acquired 9% of Pinterest shares (PINS: +16.3%).Citigroup (C: +13%) reported better than market-wide expectations for the second quarter.UnitedHealth Group (UNH: +5.4%) beat forecasts for revenue and earnings per share for the second quarter and raised its forecast for the fiscal year.We expectMarket participants estimated the probability of a Fed rate hike by 100 bps in July below 30% after a number of statements on this issue from official representatives of the regulator with voting rights in the FOMC. WSJ orients readers to the fact that the Fed will raise the rate by 75 bps at the end of the July meeting, so as not to aggravate the signs of weakening economic activity that are already emerging. Representatives of the Federal Reserve's Open Market Committee are aware that the likely continuation of aggressive tightening of monetary policy may be beyond the strength of both the stock market and the economy as a whole. Recent surveys and market data indicate a slight decrease in inflation expectations. Coupled with lower commodity prices, tighter financial conditions and improved macroeconomic data, this suggests that the peak of inflation has passed. At the same time, concerns remain in the market that the Fed's course may turn out to be wrong. The July rate increase by 75 bps, which has already been taken into account in the quotes, will cause an increase in the interbank rate to 2.25–2.50%. This range is already close to neutral values. If the assumption that inflation has peaked is not confirmed, the Fed is highly likely to continue to actively move rates up. At the same time, it follows from surveys that expectations of a recession in the next 12 months are intensifying.Trading on July 18 at the sites of Southeast Asia ended in the green zone. China's CSI 300 gained 1.04%, Hong Kong's Hang Seng rose 2.63%. The Japanese stock exchange was closed due to the celebration of the Day of the Sea. Eurostoxx 50 has been growing by 1.13% since the opening of trading.Brent crude futures are quoted at $103.9 per barrel. Gold is trading at $1,716.5 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3840-3920 points.MacrostatisticsToday, data on the housing market index for July from the National Association of Home Builders will be presented (forecast: 66 points against June 67).Sentiment IndexThe sentiment index rose by 2 points to 29.Technical pictureThe closest support for the S&P 500 remains the range of 3600-3660 points. The RSI and MACD indicators signal a downward reversal, but the index may try to "pierce" the upper boundary of the descending channel before returning to the "bearish" trend. We do not exclude the possibility of quotes entering the 3960-4000 corridor.In sightNetflix, Inc. (NFLX) will report quarterly results on July 19 after the market closes. The consensus forecast predicts revenue growth of 9.4% YoY, to $8.03 billion, with a decrease in GAAP EPS from $2.97 to $2.96. Note that market expectations look very cautious compared to the company's own guidance, which assumes revenue of $8.05 billion with EPS at $3.00. The latest data from Apptopia, which JPMorgan cites, indicate weak trends towards changing the audience of the streaming service in April-June, even despite the successful release of the new season of the popular TV series "Very Strange Things". We do not exclude that the net outflow of subscribers may slightly exceed the 2 million stipulated in the consensus. The reaction of investors to the streaming service's report will depend on whether the company's guidelines on the dynamics of subscribers for the third quarter coincide with market forecasts that suggest an expansion of the audience in the range of 1.5–1.9 million. These values look achievable, but there is no reason to hope for more optimistic forecasts yet. We believe that the expansion of the Netflix subscriber base constrains both the consumer's desire to optimize entertainment costs, and competition from Apple (AAPL), Disney (DIS) and Warner Bros. Discovery (WBD). Special attention will be paid to management's comments on operating marginality due to the high rates of wage growth in the United States.The largest electric car manufacturer in the United States, Tesla, Inc. (TSLA), will publish its second quarter reports on July 20. The general market consensus puts the company's revenue at $16.5 billion (+38% YoY) with an increase in EPS to $1.82 (+25.7% YoY). At the same time, sales are expected to decrease from 310 thousand in January-March to 263 thousand. If these expectations are met, Tesla's series of quantitative sales growth, which lasted eight consecutive quarters, will be interrupted. Since March 28, the company had to stop production in China for three weeks, and after that production was resumed in limited volumes.On Friday, July 22, the financial results for the second quarter will be published by the international payment system American Express Company (AXP). Despite the expected revenue growth of 18% YoY, to $12.51 billion, the consensus forecast assumes a drop in GAAP EPS by 13.7%, to $2.42. The pressure on profits is exerted by an increase in expenses in conditions of high inflation, as well as the need to increase reserves to cover possible credit losses with an increase in the volume of credit card loans with a simultaneous deterioration of the macroeconomic situation. The increase in interest rates and the active demand for services during the tourist season are the key drivers of AXP's interest income growth, which is expected to be 20.9% ...

Microsoft will develop and offer an ad-supported subscription for Netflix, which will cost less than other streaming options of the streaming service. According to Chief operating Officer Greg Peters, Netflix chose Microsoft because of its ability to innovate, as well as because of reliable privacy protection. Microsoft is expected to boost Netflix ad sales.The other day it became known that the streaming service is negotiating with the largest film studios to amend the terms of agreements that would allow the company to broadcast content in a new version of the platform, involving advertising support. This initiative is associated with a slowdown in subscriber growth, which forced the company to look for new ways to attract subscribers and new sources of income.Thus, Netflix will join a number of its competitors that already offer ad-supported services, for example, Walt Disney Co's Hulu, NBCUniversal's Peacock and Warner Brothers Discovery's HBO Max. Disney is also planning to introduce a version of Disney+ with ads.Against the background of this news, the quotes of both giants could have risen noticeably, if not for the general negative background. The US stock market ended yesterday's trading with a fall due to an increase in inflation to 9.1% in annual terms. The recovery of the market in the near future remains a big question.Netflix shares rose by 1.21% on July 13, to $176.56 per paper. Microsoft shares fell by 0.37% to $252.72 per ...

The US stock exchanges ended the trading session on July 13 with a moderate decline. The S&P 500 dropped 0.45% to 3802 points, the Nasdaq lost 0.15%, the Dow Jones - 0.67%. Positive dynamics in the composition of the broad market index was demonstrated only by the sector of cyclical consumer goods (+0.86%). Industrial companies (-1.20%) and telecoms (-1.07%) were among the outsiders.Company newsUnity Software (U: -17.45%) has agreed to acquire ironSource (IS: +47.09%). The deal is valued at $4.4 billion, which implies a premium of about 93% by the close of trading on July 12. The Board of Directors of Unity Software also approved a buy back program in the amount of up to $2.5 billion, which will start in the fourth quarter, after the completion of the transaction.Netflix Inc. (NFLX: -1.21%) is negotiating with major film studios to amend the terms of agreements to be able to broadcast content in the new version of the ad-supported platform.Delta Air Lines (DAL: -4.47%) met revenue expectations, but its adjusted EPS was below the consensus forecast. The increase in non-fuel costs provoked forced flight cancellations and increased salaries for employees. For the third quarter, the airline predicts revenue growth in the range of 1-5% YoY.We expectConsumer inflation in the United States accelerated to 9.1% in June, while the consensus of analysts assumed its growth by 8.8%. The main reasons for the new record was an increase in gasoline prices by 11% and gas by 8%. The core consumer price index rose by 5.9%, also exceeding market expectations by 0.2%. The main driver of the growth of the indicator was the continued rise in the cost of rental housing. Economists assume that inflation has peaked and will slow down in the coming months as commodity prices normalize due to expectations about the cooling of the global economy.Nevertheless, so far the observed increase in prices contributes to the speculation of market participants regarding the further activation of the Fed rate hike. Currently, the probability that in July the rate will be raised immediately by 100 basis points (bp), according to CME FedWatch, is already estimated at 75%, despite the fact that before the publication of the June inflation report, this estimate was 7%. Expectations of a more intensive tightening of monetary policy by the Federal Reserve are fueled by similar actions of other regulators. On the eve of the Bank of Canada, for the first time since 1998, raised the key rate by 100 bps at once, to 2.5%. The Reserve Bank of New Zealand raised the base rate by 50 bps for the third time in a row, and now it has also reached 2.5%. UK GDP grew by 0.5% in May, which turned out to be significantly higher than consensus. This fact contributes to the strengthening of expectations that the Bank of England will raise the rate by 50 bps at the meeting in August.The stock exchanges of the Asia-Pacific region completed trading on July 14 in different directions. Japan's Nikkei rose by 0.62%, Hong Kong's Hang Seng lost 0.22%, China's CSI 300 added 0.01%. EuroStoxx 50 has been declining by 0.91% since the opening of trading.Brent crude futures are trading at $99 per barrel. The price of gold is $1,734 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3740-3810 points.MacrostatisticsToday, US manufacturing inflation data for June will be published. The consensus assumes that the production price index (PPI) will grow by 0.8% mom and 10.7% YoY.Sentiment IndexThe sentiment index dropped one point to 28.Technical pictureThe day before, the bulls managed to maintain parity with the bears. However, the S&P 500 has formed a "double top" pattern, which suggests further downward movement. The RSI is held in the neutral zone, and the MACD indicates a weakening of buyers' positions. An important resistance for the broad market index is still located at around 3,900 points. For market participants, it is more interesting to test the S&P 500 nearest support at the level of 3700 points.ReportsToday, JPMorgan Chase & Co. (JPM), the largest US bank by assets, will present reports for the second quarter of the current calendar year. The FactSet consensus assumes a decrease in the bank's net revenue by 0.1% YoY, to $31.81 billion. At the same time, due to the increase in reserves and investments, EPS is projected to decrease by 23.5% YoY, to $2.89. JPM's net interest income for the quarter may exceed last year's result by 16% due to an increase in consumer lending volumes. Taking into account the accelerated increase in interest rates and the increase in lending volumes, JPM raised its forecast of net interest income for the full year 2022 from $53 billion to more than $56 billion, which implies an increase of 8% YoY. Pressure on revenue will be exerted by cooling demand for mortgage and car loans. According to the results of the reporting quarter, investment banking revenues are expected to fall by 44% YoY due to low activity in the IPO market. The revenue of the trading direction may increase by 15-20% due to increased market volatility. Note that due to the tightening of capital adequacy requirements following the results of the Fed stress test, JPM retained its quarterly dividend at $1.00 per share, which implies a yield of 3.28% per ...