The Week Ahead: Netflix, Tesla, and Coca-Cola to Report Earnings

Our analysts and investors have a busy week ahead with Netflix NFLX, Tesla TSLA, and Coca-Cola KO expected to report their third-quarter earnings.

In the second quarter, Netflix reported impressive subscriber growth as more people stayed home during the pandemic and demanded entertainment options. However, the U.S. subscriber base posted more customer additions quarter over quarter because the lockdown has lasted longer in the United States than in other countries. The entertainment company, which has a narrow Morningstar Economic Moat Rating, has come a long way since its inception as a DVD-rental-by-mail service, but it does face competition with Disney+, Peacock, and HBO Max. We expect to see the streaming service report on Tuesday.

After Tesla's Battery Day in September, we raised our fair value estimate from $173 to $195. As the leading autonomous vehicle player and a sustainable energy company, we believe Tesla has the potential to be the dominant electric vehicle firm. However, we do not anticipate Tesla having mass-market volume this decade because the prices for an electric vehicle are too high. The auto manufacturer is expected to report on Wednesday.

As one of the most popular nonalcoholic beverage names, we were surprised by the announcement of Coca-Cola's plan to partner with Molson Coors and manufacture, market, and distribute a forthcoming hard seltzer. We think Coca-Cola's decision was motivated by the Byzantine alcohol distribution laws across the U.S. in addition to the relatively fragmented nature of its U.S. bottling network. We await an earnings report from the wide-moat company on Thursday.

For Monday, we have our eyes on International Business Machines IBM. Procter & Gamble PG is expected to report on Tuesday, followed by Verizon Communications VZ on Wednesday. AT&T T and Intel INTC are on the roster for Thursday.