Steel Dynamics, NetFlix, Tesla, AutoNation and Honeywell at a glance

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Tuesday (October 19)

SPOTLIGHT: NETFLIX, JOHNSON & JOHNSON

NETFLIX: California-based global internet entertainment services company to report third-quarter earnings per share of $ 2.57, more than 45% year-over-year growth, from $ 1.74 per share at the same time a year ago.

The streaming video pioneer is reportedly posting revenue growth of more than 16% to around $ 7.5 billion. In the past two years, the company has only beaten earnings per share (EPS) estimates three times, with a surprise of almost 21%.

The better-than-expected NetFlix third quarter results could help the stock reach new all-time highs. The company’s shares have jumped more than 17% so far this year and hit a record high of $ 646.84 on October 7.

“NetFlix (NFLX) stock has come out of its crisis, jumping around 22% in less than 2 months. The estimates have remained relatively stable and NFLX is now trading at 8.5x 2022E Rev, the top of its 3-year range. We would expect 3Q net additions of 3.5MM and a 4Q guide of around 7-8MM. Squid Games has demonstrated the impact of a successful international strategy and, if done right, games like Oxenfree could achieve a similar Zeitgest moment. We remain rated “Buy” with a target price of $ 737, or 8.5 x 2023 JEF Rev, ”noted Andrew Uerkwitz, equity analyst at Jefferies.

JOHNSON & JOHNSON: One of the world’s largest and most comprehensive healthcare manufacturers is expected to post third-quarter earnings per share of $ 2.36, representing annual growth of more than 7%, from $ 2.20 per share at the same time a year ago. Revenue is expected to increase by more than 12% to approximately $ 23.6 billion.

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Wednesday (October 20)

IN THE SPOTLIGHT: TESLA

YOU’RE HERE: California-based electric vehicle and clean energy company is expected to post third-quarter earnings of $ 1.52 per share, representing 100% year-over-year growth, from $ 0.76 per share share in the same quarter a year ago.

The high-performance electric vehicle maker is said to have a turnover of $ 13.16 billion. The electric vehicle maker has beaten profits three times in the past four quarters.

“We expect Tesla to be bullish in 3Q21 given record deliveries exceeding estimates of around 20,000 announced in early October. Additionally, the company announced record sales of 56,000 in China with a total of 133,248 or 55% of total shipments for the quarter from its Shanghai plant, ”noted Jeffrey Osborne, equity analyst at Cowen.

“We look forward to management’s comments on Tesla’s internal chip production strategy and capacity expansion plans. We also look forward to an update on the opening of the Berlin Gigafactory. Additionally, we look forward to an update on Tesla’s 4680 cells and the gradual rollout of its FSD beta. Finally, we look forward to an update on the semi and cyber truck release schedule.

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Thursday (October 21)

IN THE LIGHT: AUTONATION

Fort Lauderdale-based auto retailer AutoNation is expected to report third-quarter earnings of $ 4.16 per share, which is about 75% year-over-year growth, from $ 2.38 per share at the same period a year ago.

Over the past four consecutive quarters, on average, the company has achieved a surprise profit of more than 47%. The automotive distribution giant is said to have a turnover of 6.5 billion dollars.

“We are optimistic about the trajectory of new CEO Mike Manley, who previously held various leadership roles at FCA and Stellantis, where he demonstrated leadership of very complex organizations going through changes of scale, scope and scope. technology, ”said Adam Jonas, equity analyst at Morgan Stanley.

“The omnichannel strategy is not clear and can lead to a loss of market share. For new vehicles, historically, market share and gross margin per unit have declined. For used vehicles, the autonomous used car business model failed in the late 1990s. The business mix / growth / margins are similar to other traditional car dealers, and the stock is trading. at a price lower than its historical average and compared to the average of the dealers. “

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Friday (October 22)

IN THE SPOTLIGHT: HONEYWELL INTERNATIONAL

The company that makes parts for the planes made by Boeing and Airbus SE, Honeywell, is expected to report third-quarter profits of $ 1.99 per share, which is about 28% year-over-year growth. other, compared to $ 1.56 per share at the same time. quarter a year ago.

Over the past four consecutive quarters, on average, the company has achieved a profit surprise of around 5%. The Charlotte, North Carolina-based company is reportedly showing revenue growth of around 12% to $ 8.7 billion.

Last week, the company lifted its forecast for business jet deliveries and said the industry had almost completely eliminated the effects of the COVID-19 pandemic.

The global technology and manufacturing company in its 30th edition of the Global Business Aviation Outlook forecasts up to 7,400 new deliveries of business jets worth $ 238 billion from 2022 to 2031, up 1% in shipments compared to the same 10-year forecast a year ago.

“We believe Honeywell (HON) stock is currently a better choice over Rockwell Automation stock, despite Rockwell’s revenue growth at a faster rate in recent years. Honeywell is trading at around 4.4x sliding revenue, compared to Rockwell’s 5.1x. Although both companies experienced a decline in revenues due to the pandemic, Rockwell experienced a strong recovery thanks to new orders and the impact of the acquisitions of ASEM, Kalypso and Fiix, ”noted equity analysts at TREFIS.

“Honeywell, on the other hand, is still experiencing slower revenue growth, primarily due to its exposure to the aerospace segment, which has been one of the hardest hit companies during the pandemic. However, there is more to the comparison. Let’s go back to take a closer look at the relative valuation of the two companies by looking at historical revenue growth as well as operating margin growth.

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