U.S. Market Overview and Forecast for the Week
U.S. stocks closed higher to wrap up the fifth consecutive winning week, setting new records amid growing anticipation of third-quarter earnings and the Federal Reserve’s rate trajectory.
The benchmark and blue-chip indices surged by 1.1% and 1.2% respectively, hitting fresh highs. The tech-heavy index also rose by 1.1%.
Market Data and Economic Signals
Investors, gearing up for an eventful week, are keeping an eye out for key economic indicators, including the U.S. retail sales report for September, scheduled for Thursday. Analysts anticipate a 0.3% increase post a 0.1% rise the previous month.
Moreover, multiple Fed speakers, such as Neel Kashkari, Christopher Waller, Mary Daly, and Adriana Kugler, are set to share their insights. The market anticipates an 86% probability of a 0.25% rate cut in November.
With third-quarter earnings season in full swing, heavyweights like Netflix and Walgreens Boots Alliance are slated to unveil their financial results along with other prominent firms.
Stock To Buy: Netflix
Netflix, the California-based streaming behemoth, is poised for another stellar week as upbeat demand trends and improved fundamentals are expected to drive positive earnings results. The company’s resolute focus on cost reduction and expanding its subscriber base solidifies its position in the competitive streaming realm.
The streaming giant is projected to post a significant surge in earnings to $4.53 per share, marking a 37% YoY increase, with revenue predicted to rise by 14.3% to $9.76 billion.
With substantial growth in subscriber additions, Netflix’s stock achieved a record high of $736 before settling at $722.79. The company’s market cap now stands at $310.2 billion, signifying a substantial 48.4% surge in share value year-to-date.
Stock to Sell: Walgreens Boots Alliance
Contrarily, Walgreens Boots Alliance faces a challenging week ahead, marred by anticipated disappointing earnings results amid a tumultuous fiscal climate. The pharmacy giant grapples with sluggish consumer demand, escalating labor costs, and inflationary pressures, painting a grim outlook for its stock.
Analysts foresee a substantial 53% drop in earnings compared to initial estimates, with revenue expected to inch up by a meager 0.4% year-over-year to $35.55 billion.
Walgreens’ stock closed at $9.21, hovering near its recent low of $8.22, reflecting a market cap of $7.9 billion and a daunting 23-year low since September 1996.
Walgreens Boots Alliance: A Financial Roller Coaster in 2024
The Stock Plunge and the Dow Jones Omission
Walgreens Boots Alliance, the global pharmaceutical company, has seen its shares plummet by a staggering 64.7% in the year 2024. This decline comes on the heels of the company’s removal from the prestigious Dow Jones Industrial Average earlier in the same year.
Financial Health Concerns
Despite its prominence, Walgreens Boots Alliance has attained a below-average Financial Health score of 1.8 out of 5.0 on InvestingPro. This assessment is primarily due to concerns surrounding the company’s weak profitability outlook and its substantial debt burden.
The Role of InvestingPro in Uncertain Markets
For both novice investors and seasoned traders, the utilization of InvestingPro may provide a crucial key to navigating the complexities of the current market landscape. By leveraging InvestingPro, individuals can unlock a multitude of investment opportunities while effectively managing risks.
Looking Ahead with Caution and Optimism
As investors grapple with the tumultuous fluctuations in the financial markets, the plight of Walgreens Boots Alliance serves as a stark reminder of the perils that can befall even the most established companies. Nevertheless, in the midst of uncertainty, there is always the potential for growth and rebuilding.
