• Trump inauguration, Q4 earnings season will be in focus in the holiday-shortened week ahead.
• With its transformative business model and clear growth trajectory, Netflix looks like a compelling buy for investors seeking quality growth.
• Procter & Gamble faces operational challenges and tepid growth, making it less appealing in the current market environment.
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U.S. stocks rallied on Friday ahead of the inauguration of Donald Trump, as the Dow Jones Industrial Average and the S&P 500 had their best week since the November election amid signs of easing inflation.
For the week, the Dow and S&P 500 advanced 3.7% and 2.9%, respectively, while the tech-heavy Nasdaq Composite climbed 2.5%.
Source: Investing.com
The week ahead is expected to be another eventful one as investors continue to gauge the outlook for the economy and interest rates.
U.S. markets will be closed Monday for the Martin Luther King holiday. President-elect Trump’s inauguration also will be Monday, with the incoming president expected to issue a flurry of day one executive orders.
Source: Investing.com
Meanwhile, the fourth quarter earnings season shifts into high gear, with reports expected from several high-profile companies, including Netflix (NASDAQ:NFLX), American Express (NYSE:AXP), Procter & Gamble (NYSE:PG), Johnson & Johnson (NYSE:JNJ), Verizon (NYSE:VZ), GE Aerospace (NYSE:GE), 3M Company (NYSE:MMM), United Airlines (NASDAQ:UAL), and American Airlines (NASDAQ:AAL).
Bitcoin and cryptocurrencies will also be closely watched.
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, January 20 – Friday, January 24.
For investors looking to allocate capital this week, Netflix stands out as a strong growth opportunity. The streaming giant’s shift to advertising, live events, and monetization of popular content like ‘Squid Game’ are significant tailwinds that could propel the stock higher in the week ahead.
The Los Gatos, California-based Internet television network is scheduled to release its fourth-quarter update after the U.S. market closes on Tuesday at 4:00PM ET. A call with co-CEO’s Ted Sarandos and Greg Peters is set for 5:00PM ET.
Market participants expect a sizable swing in NFLX stock after the print drops, according to the options market, with a possible implied move of nearly 9% in either direction. The stock rose 8.8% after the last earnings report came out in mid-October.
Source: InvestingPro
Profit estimates have been revised upward 27 times in the last 90 days, reflecting growing confidence among analysts. Only four downward revisions have been noted, underscoring Wall Street’s bullish sentiment toward the entertainment powerhouse.
Netflix is seen earning $4.21 per share, representing a staggering 99% increase from the prior year. Meanwhile, revenue is forecast to increase 15% year-over-year to $10.1 billion.
The company has shifted its focus from pure subscriber growth to prioritizing operating margins and revenue expansion. This pivot includes a robust advertising model, which is becoming a cornerstone of its growth strategy.
On the content front, the blockbuster release of ‘Squid Game Season 2’ and other high-profile projects ensures a steady stream of engagement. Netflix is also venturing into live events, including NFL games and boxing matches, expanding its appeal to a broader audience.
NFLX stock ended at $858.10 last Friday. At current levels, Netflix has a market cap of $366.8 billion. Shares are down 3.7% to start 2025 after scoring an annual gain of 83% last year.
Source: Investing.com
It is worth mentioning that Netflix has a great InvestingPro Financial Health Score of 3.1/5.0, reflecting its strong financials, robust growth prospects, and innovative strategies.
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On the other hand, Procter & Gamble faces operational challenges and tepid growth, making it less attractive in the current market environment. The global consumer products company is scheduled to report its fiscal second quarter earnings report before the stock market opens on Wednesday at 6:55AM ET.
The expected move in the options market is about 3.4% up or down. Shares fell 1.6% after the last earnings report came out in October.
Underscoring several challenges facing Procter & Gamble, 18 out of the 19 analysts surveyed by InvestingPro cut their sales estimates ahead of the print, citing soft consumer demand and a challenging outlook.
Source: InvestingPro
P&G is seen earning $1.86 per share, increasing just 1.1% from EPS of $1.84 in the year-ago period. Meanwhile, revenue is forecast to inch up 2.2% year-over-year to $21.6 billion. These modest growth projections reflect increasing challenges for the company.
The consumer goods giant recently faced operational disruptions, including a ransomware attack on one of its shipping vendors. The attack could weigh on distribution efficiency and hurt margins in the short term.
Moreover, rising competition in key markets and inflationary pressures on raw materials are expected to limit profitability.
As such, CEO Jon Moeller may strike a cautious tone and give soft guidance to reflect supply chain disruptions and weakening margins.
PG stock closed last Friday’s session at $161.13, not far from its lowest level since April 2024. At its current valuation, the Cincinnati-based consumer goods company has a market cap of $379.5 billion. Shares are down 3.8% to start the new year.
Source: Investing.com
Although P&G remains a dominant player in the consumer goods sector with strong brands like Tide and Gillette, its growth is slowing, and the stock appears fully valued. Trading at a forward price-to-earnings (P/E) ratio of 23.7, the shares may not offer much upside at current levels.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.
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Kaitlin Rogers is a writer, editor, and news junkie. She has been working in the media industry for over five years, and her work has appeared in dozens of publications.
Kaitlin graduated from Michigan State University with a bachelor's degree in journalism and political science.
