Weekly Equities Forecast: Netflix, United Airlines & easyJet

Much of the focus will be on Trump’s inauguration on Monday and his return to the White House. Investors will be watching closely to see which policies Trump will implement immediately, particularly regarding tax cuts, trade tariffs, and deregulation.

Small-cap, financial, and crypto-related stocks could see heightened volatility.  Meanwhile, the S&P 500 could find support if Trump sounds more conciliatory than before.

As well as Trump’s return, earnings season ramps up. Here, we look at three companies' reporting this week.

Netflix earnings

Netflix will report earnings on January 21^st, and Wall Street expects EPS of $4.23, a 69.2% rise from last year. Meanwhile, revenue is expected to increase by 3.5% annually to $10.11 billion.

Successful content releases, the growing positive impact of advertising tiers, and password crackdowns drive the numbers. The share price has shown resilience as investors focus on subscriber growth and rising margins.

Q3 subscriber growth was 5.1 million net subscriber additions, paving the way for strong Q4 subscriber growth. Thanks to live NFL games and Squid Game season 2 content, the expectation is that subscriber numbers could double in Q4 compared to the previous quarter. This will mark the last time that Netflix reports subscriber metrics as it signals a shift towards emphasizing financial performance.

Operating margin guidance is at 27% for 2024 and is expected to reach 28% in 2025, thanks to content investments being balanced against cost management.

How to trade NFLX earnings?

After reaching an all-time high of 941 in December, the price has eased lower before running into support at 825. While the price remains above its 100 and 200 SMAs, it has fallen below its 50 SMA. Solid numbers could help the price retake the 50 SMA at 875 and head back towards 900 and 941 to fresh ATHs.

Disappointing figures and outlook could see the price test 825 support. A break below here creates a lower low, exposing the 100 SMA at 795 and support at 735.

United Airlines Q4 earnings preview

United Airlines will report Q4 earnings on Wednesday, January 22nd, which could highlight the recovery in travel post-pandemic. The share price rallied following Q3 earnings back in October, as the airline posted adjusted EPS of $3.33, well ahead of expectations at $3.07. Operating revenue of $14.84 billion also beat Wall Street estimates of $14.72 billion. The company also announced plans to buy back shares of $1.5 billion.

The firm is benefiting from rising demand and doesn't appear to be impacted by aircraft maker Boeing's struggles, given that it already possesses a large-scale fleet in operations and is not overly reliant on Boeing to deliver anything.

Expectations in Q4 are for EPS $2.97 to rise 48.5% from $2.00 per share in the same quarter a year earlier. The company has a solid track record for consistently beating Wall Street's bottom-line estimates in the past four quarters. For fiscal 2024, United Airlines is expected to report EPS of $10.31, up 2.6% from $10.05 in fiscal 2023. Meanwhile, EPS is expected to rise 15.2% year over year in fiscal 2025 to $11.88.

How to trade UAL earnings

The share price has rallied hard over the past 52 weeks, outpacing the S&P 500. The price trades in a rising channel and hovers around its all-time high of 110 reached last week. Buyers will need to push above 110 to bring 124, the upper ban of the rising channel, into play.  Support is seen at 97, the lower band of the channel, and the 50 SMA. A break below 91 creates a lower low.

easyJet Q1 earnings preview

easyJet is due to release Q1 results on Wednesday, January 22nd, after a strong end to its 2024 fiscal year, when it posted a 34% rise in annual headline profit. The results released in November also showed that the carrier posted a record profit before tax for its easyJet holidays business, up 56% year over year. Following the earnings, EasyJet lifted its dividend to 12.1 p per share, more than double the 4.5p paid out in the fiscal 2023 year.

Based on booking data, 2025 is expected to reduce winter losses thanks to a significant improvement in Q1. Capacity growth of 3% is expected in 2025, and the company plans to grow customers in its easyJet holidays business by 25%.

The package holiday segment is expected to maintain a high double-digit growth rate, with strong demand from sunseekers expected this year.

Q1 results come after former CFO Kenton Jarvis took over from Johan Lundgren as CEO at the start of the year.

How to trade EZJ earnings

EZJ continues to trade above its rising trendline dating back to 2023. A price face rejection at 590 resistance, rebounding lower. EZJ is currently testing the 200 SMA at around 500. A break below here and 475 support opens the door to the trendline at 440. Should the 200 SMA hold, buyers could look to retake 590 and go towards 650.