Outlook on Upcoming Earnings Reports for Selected Stocks 📈
This year, certain stocks such as Cloudflare and Walt Disney stand to benefit from their forthcoming quarterly earnings announcements, according to insights shared by Morgan Stanley. The financial institution anticipates variability in earnings estimates moving forward into 2025, triggered by results from the fourth quarter. Analysts, led by Michelle Weaver, highlighted that the impact of dollar fluctuations is likely to create notable performance differences across various stocks during this earnings season. They noted that such dispersion often cultivates an environment favorable for selective stock investments.
What to Expect from S&P 500 Earnings 📊
The consensus among analysts for the fourth quarter indicates a projected increase in earnings per share for the S&P 500, estimated to climb by 11% year over year, supported by a 3% growth in sales. Interestingly, while earnings forecasts have remained relatively stable since the third quarter’s results were disclosed in October, sales estimates have been adjusted downward more significantly than the historical average. This context gives rise to a strategic focus from Morgan Stanley, revealing a selection of stocks they recommend for short-term gains post-Q4 earnings disclosures.
Walt Disney: An Optimistic Forecast 🎡
Morgan Stanley maintains a positive outlook for Walt Disney ahead of the entertainment conglomerate’s earnings release scheduled for February 5. The company has been designated as a prime selection for 2025, with an “overweight” rating from Morgan Stanley. They foresee substantial gains stemming from the streaming sector in the future. Additionally, Disney is poised to capitalize on the anticipated growth in advertising revenue within the U.S. market.
Analyst Benjamin Swinburne emphasized in a December 18 assessment how the winners and losers within streaming and advertising sectors are becoming increasingly apparent, closely tied to the advantages typically enjoyed by expansive internet companies. Swinburne expressed confidence that Disney is well-positioned to emerge as a leader in content distribution while simultaneously taking advantage of increasing consumer demand and growth at its experiential assets. It’s noteworthy that Disney shares have remained steady in January yet have surged nearly 22% over the preceding six months.
Cloudflare: Optimism Persisting 🚀
Cloudflare is also expected to experience upward movement following its earnings report next month, according to projections by Morgan Stanley. The shares of this cloud services powerhouse have soared over 40% in the last quarter, recently reaching a new annual peak. The company has enjoyed an AI-driven uptrend, with a remarkable 15% increase observed in the early weeks of January.
Cloudflare is scheduled to announce its earnings on February 6. However, in November, the San Francisco-based entity had warned that its anticipated fourth-quarter revenue would fall short of analyst expectations due to heightened competition within the cybersecurity domain. The firm noted that reduced capital expenditure amid rising economic uncertainty and interest rates has also affected its operations. Yet, recent evaluations from Morgan Stanley revealed that their checks of resellers indicate a robust conclusion to 2024, with 2025 earnings estimates appearing largely achievable.
Other Prospective Performers in the Market 💼
Several additional companies have emerged as potential beneficiaries of their latest quarter outcomes, according to Morgan Stanley’s analysis. These include Vertex Pharmaceuticals, Zebra Technologies, and Axon Enterprise, recognized for producing tasers and various weapons systems. Axon notably ranked as the fifth fastest-growing stock within the S&P 500 in 2024, boasting an impressive 130% return.
With a careful assessment of upcoming earnings reports and the broader market conditions, these companies exhibit interesting potential for investors. This year holds the promise of variability and opportunity for astute market participants, particularly in navigating the results emerging from these significant stock players.
For further insights, examine reports from various financial sources.
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