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Q4 Earnings Season Wrap: What does the future hold for NFLX, UNH, GS, C and MS?

How do TipRanks’ best-performing analysts see these five companies performing now that their Q4 earnings reports have been released?

We see whether analysts are more bullish or more bearish for 2017 following the highs and lows of earnings season.

Netflix (NASDAQ: NFLX)- 230m Global Subscribers by 2025

  • Q4 EPS of 15 cents and revenue of $2.48 billion beat Wall Street expectations of EPS of 13 cents, and $2.47 billion in revenue. Now stock is soaring.
  • Netflix is poised to rise to even higher heights and is a top pick for many analysts. Investment in original content is paying off and subscriber numbers are growing. Four-star Brean Capital analyst Alan Gould says “by 2025 we believe NFLX can have over 230 million global subscribers generating a $15 ARPU, $11.50 of EPS and still be growing at an almost 20% CAGR.”

UnitedHealth (NYSE: UNH)- Superstar Stock

  • UNH reported Q4 EPS of $2.11, $0.04 better than the analyst estimate of $2.07. Revenue for the quarter of $47.5 billion versus the consensus estimate of $47.16 billion.
  • Piper Jaffray analyst Sarah James believes UNH rivals Aetna (AET) and Anthem (ANTM) will find it increasingly difficult to close the cost trend gap driving UnitedHealth’s impressive market share gains.
  • UNH is an analyst favorite with a strong buy analyst consensus rating on TipRanks. No hold or sell ratings in the last 3 months.

Goldman Sachs (NYSE: GS)- Profits Soar

  • GS easily surpassed expectations with EPS of $5.08 on revenue of $8.17 billion for the quarter. Analysts predicted adjusted EPS of $4.80 on revenue of $7.76 billion.
  • The beat was driven by a very strong performance in the fixed income, currencies and commodities division. Here revenues up 78% from the previous year.
  • Oppenheimer analyst Chris Kotowski is bullish about how GS will fare on interest rate hikes due to its good positive earnings leverage.

TipRanks’ News Sentiment Score for GS over the past week is 83% bullish vs 77% bullish for sector average:

Citigroup (NYSE: C)- Analysts Split

  • Citigroup beat on EPS but missed on revenue; with EPS of $1.14 on revenue of $17.01 billion for the quarter compared to analyst expectations of adjusted EPS of $1.12 on revenue of $17.26 billion.
  • Bearish Brian Kleinhanzl from KBW says beat low quality as lower provisions and lower tax rate added 5 cents to the beat. He also notes low net interest margin of 2.79% versus his forecast 2.87%.
  • CFRA analyst Catherine Seifert was more positive. She reiterated her buy rating as “We note core Q4 revenue growth of 7% topped most peers. We are encouraged by this trend, though we see revenue growth in ’17 still masked by wind-down revenue declines.” Seifert’s recommendations have a 90% success rate TipRanks shows.

Morgan Stanley (NYSE: MS)- Beats the Street

  • MS reported fourth quarter EPS of $0.81 on revenue of $9 billion, beating Street estimates of $0.65 and $8.5 billion, due to strong performance by the bank’s trading division.
  • However, UBS analyst Brennan Hawken commented, “While the bulge bracket stocks were weak today [Jan 18], MS shares moderately underperformed peers despite better than expected results… it is our sense that a lack of update to (increasingly achievable) targets may have contributed.” Hawken has a 69% success rate on MS stock according to TipRanks.

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Harriet Lefton
Harriet Lefton, originally from the UK, began her career as a journalist specialising in the niche world of metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer. Now she has turned her attention to the world of financial blogging, covering US stocks, analysts and all manner of things finance-related.