Netflix and Tesla shares didn’t have a good year, but here’s an opportunity to turn things around

Tesla
TSLA

Will report the results later weaker-than-expected deliveries in the quarterAs CEO Elon Musk continues to squabble over legal issues from his promise to buy Twitter Inc.
TWTR

Netflix
NFLX

report later rolling out new ad-supported options and job cuts amid concerns about competition and subscriber growth.

Both stocks took a hit this year after rallying sharply in previous years. Tesla stock is down more than 41% so far in 2022, largely thanks to a more than 30% drop in the past month; Netflix is ​​down more than 60% this year, while the S&P 500
SPX

fell 23%.

Netflix executives have managed to turn around their most significant pause in subscriber growth since separating their streaming service from the DVD-by-mail business. They announced Thursday that a new ad-support tier is coming in November – beating rival Walt Disney Co.
DIS

for about a month’s supply – and is still hoping to capitalize on a crackdown on password sharing as well as interactive plays like mobile video games in apps.

Full earnings preview: Netflix has lost its streaming crown to Disney. This is how operators expect to win it back.

Benchmark Research analyst Matthew Harrigan, in a research note on Thursday, said he’s skeptical of the prospect of an immediate ad-led shift for Netflix, even as series like “Stranger Things” and “Dahmer” captivated viewers.

“The macro timing for a new advertising service… is not favorable,” he said.

Tesla reports third-quarter earnings on Wednesday, after reporting delivery in the third quarter was more than 343,000 – a record however below analysts’ expectations of 371,000 – same record monthly sales of vehicles made in China in September. The gap between those deliveries and total vehicle production, which is more than 365,000, could raise questions about whether Tesla is falling into a slump in demand, though the company thinks the gap This is due to the difficulty of restricting vehicle transportation “at a reasonable cost during this peak logistics period this week.”

Full earnings preview: Does Tesla’s record deliveries mask a demand problem?

“While the argument (in PR) from Tesla makes sense on paper, the Street won’t be convinced and lingering worries about demand issues will persist,” said Wedbush analyst Daniel Ives. until we hear about the year-end unit’s guidance on Tesla’s conference call. a research note this month.

Positive reports from Tesla and Netflix could help address some disappointment at the start of earnings season, which has prompted analysts to lower their growth expectations for the quarter. FactSet senior earnings analyst John Butters Friday report that expectations for 2.8% growth at the end of the second quarter fell to 1.6% in two weeks in the third quarter, a lower rate than the companies that led expectations so far.

However, only 7% of companies in the S&P 500 have reported so far, a number that will start to increase rapidly next week. There are 66 S&P 500 companies expected to report and 8 of the 30 components of the Dow Jones Industrial Average are on the list: Johnson & Johnson
JNJ

and Goldman Sachs Group Inc. on Tuesday
GS

; International Business Machine Corp.
IBM,

Procter & Gamble Co.
PG

and Travelers Co. Inc.
TRVU

on Wednesday; Dow Inc.
DOW

on Thursday; and American Express Co.
AXP

and Verizon Communications Inc.
VZ

on Friday morning.

A call to put on your calendar

Snap Inc.: Snapchat’s parent company reports third-quarter earnings on Thursday, and analysts expect the company’s losses to grow nearly five-fold from last year and revenue growth to slow to almost nothing. It’s a major reversal to Snap’s trajectory, because digital advertising has suffered as advertisers, more wary of the recession, reined in spending.

As the first major social media company to report, color from CEO Evan Spiegel and other executives will be crucial as investors look for any signs of hope for the holiday quarter. ceremony. Snap’s
SNAP

the results could provide investors reading about the struggling digital advertising market, ahead of results from Twitter
TWTR,

Meta Platforms Inc.
META

The parent company of Facebook and Google, Alphabet Inc.
GOOGLE

a week later.

Numbers to see

iPhone demand at telecom giants: AT&T Inc.
BILLION

and Verizon Communications Inc.
VZ

The results will provide early clues upon request to Apple Inc.
AAPL

iPhone 14, after a massive promotion from wireless carriers. There’s a lot to watch out for for telcos – AT&T has noted that consumers have taken longer to pay their phone bills, but executives stress that customers still paying them. Investors will also be looking for more context on demand trends at Verizon after the company raised prices on some of its plans. AT&T results are expected on Thursday, and Verizon will follow up the next morning.

Revenue of airlines: After Delta shows significant increase in sales from pre-pandemic levelsInvestors will look for the same from other airlines such as United Airlines Holdings Inc.
UAL,

American Airlines Group Inc.
AAL

and Alaska Air Group Inc.
ALK

Report next week.

Depth: This year’s holiday-shopping season has another issue with supply shortages – and it could lead to some deals

Raymond James analyst Savanthi Syth wrote in a Friday note: “We expect the revenue fluctuations observed at Delta to also appear at United. “To a lesser extent, American and JetBlue will also benefit from large corporate and transatlantic exposure in the former coastal city exposure area and large in the latter.”

Hasbro and toy demand: Earnings from toy maker Hasbro Inc.
YES

could provide insight into demand during the holiday season, amid analysts’ expectations for a wave of discounts during the season, as retailers try to free up inventory after demand consumers switch to more expensive basic goods. Rival Mattel Inc.
MAT

Will report next week.

MarketWatch staff writer Emily Barry contributed to this article.