Week Ahead: JPMorgan Chase, United Airlines, Netflix

The decisions you make don't sit still. They move through your business, across your teams, into everything that comes next. That's why the thinking behind them matters. Not just how big it is, but how close it gets. That's Baker Tilly. Close enough to understand what's really driving your business. Close enough to turn insight into action. Across advisory, tax, and assurance, Baker Tilly brings enterprise-level thinking built around your business. Baker Tilly. Big thinking within reach. Bloomberg Audio Studios, podcasts, radio, news. The Stock Movers Report, your roundup of companies making moves in the stock market, harnessing the power of Bloomberg data. Let's take a look now at some of the stocks making news in the week ahead. I'm John Tucker, and I'm joined by Matthew Griffin, the Bloomberg Equities Reporter. New earnings season already. Tuesday, we start with Fortress Diamond. JPMorgan Chase is reporting earnings results, opening their books to investors. What are you looking out for? Well, the question for JPMorgan when they report along with several other banks is going to be a microcosm of the questions everyone has about the broader market. Analysts expect strong earnings for the bank, but will that be enough for investors? The average estimate is for trading revenue of more than $10 billion. That's a little lower than the record haul in the first quarter, but it's about 15% growth year over year. They expect adjusted earnings per share to grow to more than $5.60. A lot of tailwinds there. Geopolitical volatility can be good for trading. The revival in IPOs is good for investment banking. But if you look at what Baird is saying about the banks group right now, they say, we expect solid results, but the group is priced for it. We don't want to chase this stock right now. There are likely to be a lot of companies in this position. So as you say the things to look for trading revenues should remain historically elevated and also the investment banking looks to stay resilient despite what we call market volatility Let move on to the next one you taking a look at United Airlines they opened their books to investors on Wednesday Remember that old joke, how to become a millionaire? Well, first become a billionaire and then buy an airline. Yes, and airlines have had a beginning of the year that might remind investors of that joke. Of course, this stock plunged during the Iran war along with the rest of the group. Then, when an explosive rally as tensions de-escalated up more than 50% from late May to the end of last month, the question now that Wall Street is asking is, okay, crude prices have come down. What's going to happen to ticket prices for these airlines? Are they going to be able to hang on to some of the increases? And so, of course, earnings for the most recent quarter are going to be important. Analysts are looking for $1.84 a share, excluding some items. But especially any forecast for the third quarter is going to be important. That's where these questions about pricing might show up. And expectations there are a lot higher. Wall Street looking for $3.59 a share. Now, Citi expects airlines to beat consensus across the board. and they say United is one of the ones that might get rewarded for this. They're talking about that guidance there. They say these major airlines in the U.S., they weathered the shock well from the war, so that means investors are likely to want to return to the stock if they get any upside. And here's my big insight. Airlines use a lot of fuel, jet fuel, and that's been expensive. The increase in fares that they had, did that more than make up for the rising cost of jet fuel? It is likely that it hasn't entirely made up for it yet. United said that they expected roughly half of the increase in fuel costs to be accounted for by higher fares in the most recent quarter. We'll see what they say about that. However and they were making these comments when the Iran conflict was much closer to the front of mind for investors Even then they were saying that by the third quarter they expected that to climb closer to making up all of that gap So, again, we haven't gotten an update from the company in a couple of months on this, and that's something investors are likely to be watching for. And then, Netflix, they're going to report on Thursday, that stock is down, what, something like 16% since the start of the year. I kind of wonder if this company is losing some of its mojo. Well, yes, this is a stock that really hasn't worked and one that is dogged by a lot of questions right now about its own financials and also about disruption from AI. That's something that our colleagues over at Bloomberg Intelligence have focused on. Will people watch AI-generated entertainment instead of Netflix's offers? I can just imagine what that's going to be like. AI-generated entertainment. Yes, I'm sure it'll be real high-quality stuff. But people love short-form video. OpenAI's Sora didn't catch on, but we'll see what happens. So this is maybe an underrated AI loser. We talk a lot about these software names. For Netflix, though, in this quarter, investors are going to be looking for anything that could spark a turnaround. Analysts expect results about in line with their guidance. So that's revenue of $12.57 billion and earnings per share of 78 cents. That was a guide that disappointed investors when the company gave it. So what they'll want to know now is whether Netflix was being conservative there. Is there a potential upside? That being said, when the questions are big like this, AI disruption, whether the World Cup is going to affect viewership. So I don't even think about that. FIFA drew away viewers from Netflix? We don't know yet. That's something that, again, Bloomberg Intelligence, though, has raised as a potential issue for investors. And, of course, World Cup underway now, so maybe the company will speak to that. So the stock here has gone in the opposite direction of a lot of the market. But the question's kind of the same. Even if Netflix beats expectations is that going to be enough here How much pricing power do they still enjoy at Netflix Well they have raised prices recently while also introducing some of these lower options such as ad-supported tiers. So, it seems like their strategy has been to exercise pricing power with consumers who are willing to pay while also trying to keep everyone else on board. However, consumers have a lot of other options now, so investors' minds are constantly on whether each individual price increase is going to be the final straw. and Android Auto with the Bloomberg Business App. The decisions you make don't sit still. They move through your business, across your teams, into everything that comes next. That's why the thinking behind them matters. Not just how big it is, but how close it gets. That's Baker Tilly. Close enough to understand what's really driving your business. Close enough to turn insight into action. Across advisory, tax, and assurance, Baker Tilly brings enterprise-level thinking built around your business. Baker Tilly. Big thinking within reach. The Exchange from the New Statesman. Weekly, in-depth, long-form interviews with guests including Salman Rushdie. Would you say you are in the 11th Hour of Life? I hope I'm only in about the 9th or 10th. Ai Weiwei. 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