3 Stocks To Watch In The Coming Week: Netflix, Intel, Coca-Cola

Even as the coronavirus-related uncertainity continues to roil markets, some of the largest U.S. companies will begin reporting first quarter 2020 earnings in the week ahead.

Several mega cap technology and consumer companies are scheduled to release their latest reports, at a time when the national conversation has shifted to the possibility of lifting restrictions put in place because of the pandemic. As a result, investors are becoming more hopeful that the economy will rebound quickly after the virus is contained.

The S&P 500 posted a second week of gains—the longest positive run since mid-February—after the U.S. government issued guidelines toward restarting the economy. The benchmark index is now up about 31% since reaching its lowest point this year on March 23.

In this environment, corporate earnings are a crucial indicator, providing justification for the ongoing rally, but also furnishing future guidance from corporate America, with which investors can determine whether their expectations are in line with company prospects going forward.

In a week packed with a variety of major announcements, we're focusing on the following three stocks:

1. Netflix

The streaming entertainment giant Netflix (NASDAQ:NFLX) will report Q1 earnings on Tuesday, April 21 after the market close. Analysts are expecting $1.67 a share profit on sales of $5.74 billion.

Shares of Netflix are among the few which have emerged unscathed from the COVID-19 induced market sell-off, on investor hopes that its business is still thriving because it's a perfect “stay-at-home” stock.

NFLX Weekly TTM

As of Friday's close, Netflix's shares had gained about 31% so far this year, while the S&P 500 index plunged 11%. This unexpected resilience comes after Netflix’s dismal performance in 2019, when the stock lagged far behind the surge that pushed so many other mega cap tech stocks to new highs.

This coming week’s earnings report will be crucial to sustain that rally. The Los Gatos, CA-based company has to show it’s cementing its position as the dominant streaming service during the coronavirus pandemic.

2. Coca-Cola

The world’s largest soft drink maker, Coca-Cola (NYSE:KO), is scheduled to announce first-quarter earnings on Tuesday before the market opens as well. Analyst consensus expects $0.44 a share profit on sales of $8.37 billion in revenue.

KO Weekly TTM

The Atlanta-based beverage manufacturer is rapidly diversifying its product portfolio as consumers increasingly turn away from sugary soft drinks. New products, such as Coke Plus Coffee and the expansion of Coke Zero Sugar, lifted sales last year.

But this year is likely to be a tough one for the multinational company. The coronavirus pandemic is forcing restaurants and bars across the globe to remain closed even while consumers are urged to avoid large gatherings, venues where soft drinks are often served. Coca-Cola's shares, which closed on Friday at $48.06, are down 13% this year.

3. Intel

Chipmaker Intel (NASDAQ:INTC), will also come under sharp scrutiny in the week ahead, when it reports its latest quarterly earnings on Thursday, April 23, after the close. The semiconductor giant is expected to report $1.28 a share profit on revenue of $18.63 billion, according to analyst consensus.

INTC Weekly TTM

Intel, the largest chip maker in the U.S. by revenue, was benefiting from strong demand for chips used in data centers before the coronavirus pandemic hit. But those gains were contained as Intel struggled to ramp up production of chips that use its latest 14-nanometer process node. Results last year showed that revenue climbed 2% though net income was flat.

Investors will be eager to see whether the Santa Clara, CA-based semiconductor behemoth is seeing weakness in demand amid the pandemic and global economic slowdown. In particular, they'll be keen to know if the company is projecting a positive outlook for 2020.

Intel shares, which closed at $60.36 on Friday, have performed strongly in the current market rebound. The stock is up almost 40% from its mid-March low of $42.86. This week’s earnings results may further support that rally.