S&P 500 stocks Netflix, UnitedHealth, CME Group, JPMorgan Chase and D.R. Horton are in focus this week.
The S&P 500 and Nasdaq just finished a November with the biggest one month percentage gain since July 2022. The S&P rallied 8.9% and the Nasdaq 10.7%. Meanwhile for the Dow Jones, November was the best month since October 2022.
While the stock market still has seasonal factors in its favor, indexes could be getting tired, as many tech growth stocks appear extended after a huge November.
With uncertainty around whether the stock market rally can keep steaming ahead or if it will weaken, this list of stocks includes S&P 500 plays and Dow Jones components — giving investors a choice from health insurance, housing, banking and tech stocks.
S&P 500: Netflix Stock
Netflix shares fell 1.7% to 465.74 Friday. The S&P 500 stock dropped 2.9% on the week. But NFLX stock has been on a huge run since the Q3 earnings report on Oct. 18.
Netflix stock has surged 58% in 2023 and the online streaming giant has formed a cup-with-handle with a 482.70 entry, according MarketSmith analysis.
In the third quarter, Netflix earned $3.73 a share on sales of $8.54 billion. Analysts had called for earnings of $3.49 a share on sales of $8.54 billion. On a year-over-year basis, Netflix earnings rose 20% while sales climbed 8%.
However, Netflix's financial guidance for the fourth quarter is below Wall Street's forecast. Netflix predicts earnings of $2.15 per share on sales of $8.69 billion. Meanwhile, analysts expect earnings of $2.20 a share with revenue totaling $8.71 billion in the fourth quarter.
After a humbling performance in 2022, Netflix is focused on profitability and is targeting increased revenue with a lower-priced, advertising-supported service tier.
Netflix is expected to report Q4 earnings and revenue in January. Netflix stock has a 95 Composite Rating out of a best-possible 99. The S&P 500 component also has a 92 Relative Strength Rating and a 93 EPS Rating.
UnitedHealth Stock
UnitedHealth stock fell just over 1% to 547.16 Friday, rising just 6 cents for the week. The S&P 500 and Dow Jones component has advanced 3.2% in 2023
UNH stock on Thursday cleared a 546.78 buy point from a handle on a long consolidation that began in November 2022. UnitedHealth stock has been in a range since April 2022.
Reported merger talks between rivals Cigna and Humana appeared to hit UNH Wednesday as it released its 2024 outlook.
"Looking to 2024 and beyond, we are confident our approach will meet our long-term outlook to grow earnings per share by 13% to 16%, delivering distinctive returns for our shareholders and greater value for consumers and the health system," CEO Andrew Witty told investors.
UnitedHealth expects adjusted earnings per share of $27.50-$28 in 2024. That's up from 2023 full-year guidance of $24.85-$25. At the top of the range, that would amount to 12% growth.
UNH is part of IBD's Long-Term Leaders list composed of companies with the reliable earnings growth that make them a good candidate for buying on a pullback. The Dow giant was Thursday's IBD Stock Of The Day.
S&P 500: CME Group Stock
CME shares angled up 0.5% to 219.54 Friday during market trade. On the week, the S&P 500 stock gained 1.1%.
CME stock has formed a flat base and is hovering just below a 221.76 buy point, according to MarketSmith. On the year, CME has advanced 25%.
CME Group operates a derivatives marketplace, which offers a range of futures and options products for risk management. CME offers exchanges on a range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities and metals.
In late October, the financial exchange operator beat third-quarter earnings projections but missed slightly on revenue. Over the last three quarters, CME has averaged 15% EPS growth.
The S&P 500 stock is not expected to report Q4 earnings and revenue until February, 2024. Wall Street forecast EPS growing 15% to $2.20 with sales increasing 14% to $1.38 billion. For the full year, analysts expect 15% earnings growth and a 10% revenue increase, according to FactSet.
The S&P 500 stock has an 89 Composite Rating. CME stock also has an 89 Relative Strength Rating and an 86 EPS Rating.
JPMorgan Chase Stock
JPM shares gained around 0.5% Friday, and 2.15% on the week, to 156.84. Like UNH stock, JPM is both an S&P 500 and a Dow Jones component. JPMorgan Chase stock has gained 17% in 2023 and is in a cup base with a 159.38 buy point, according to MarketSmith.
In October, the Dow Jones giant topped Wall Street's third-quarter expectations. JPMorgan earnings increased 39% to $4.33 per share on 22% revenue growth to $39.87 billion. Analysts expected JPMorgan earnings to increase 25.6% to $3.92 per share on $39.57 billion in revenue.
Net interest income increased 30% to $22.73 billion and noninterest revenue rose 13% to $17.15 billion.
Meanwhile, consumer banking net income increased 36% to $5.9 billion with net revenue increased 29% to $18.4 billion. Excluding the impact from acquiring First Republic earlier this year, consumer banking net income increased 22% while revenue rose 19%.
JPMorgan's commercial banking net income increased 105% to $1.9 billion while net revenue jumped 32% to $4 billion. Without First Republic, net income increased 79% while revenue rose 20%.
JPMorgan's earnings growth accelerated the past four quarters leading up to the report, spiking 58% to $4.37 per share in Q2. Meanwhile, revenue growth accelerated the past five quarters. JPMorgan posted a 34% revenue gain to $41.3 billion in mid-July.
JPM will report Q4 financials in January with analysts expecting earnings to nearly flat, totaling $3.59 per share, with revenue growing 15% to $39.60 billion.
These 3 Stocks Jump On S&P 500 News
S&P 500: D.R. Horton Stock
DHI shares popped 2.5% to 130.79 on Friday to 130.86. That just cleared a 130.79 buy point from a cup-with-handle base. Investors could have bough D.R. Horton Friday morning as it broke the downtrend of the handle.
The Warren Buffett stock has surged more than 30% since hitting a recent low in October. U.S. homebuilder stocks rallied aggressively through the first half of the year, as rising interest rates slowed sales of existing houses, channeling demand into the market for newly built homes. The Building-Residential/Commercial industry group ranks No. 23 out of 197 groups tracked by IBD. Homebuilder stocks collectively have advanced around 38% so far in 2023.
The S&P 500 stock reported better-than-expected fiscal fourth-quarter earnings and revenue in early November. D.R. Horton, the largest publicly traded homebuilder, announced fiscal Q4 EPS fell 5% to $4.45 while sales increased 9% to $10.5 billion.
"Despite continued higher mortgage rates and inflationary pressures, our net sales orders increased 39% from the prior year quarter, as the supply of both new and existing homes at affordable price points remains limited and demographics supporting housing demand remain favorable," Chairman Donald R. Horton told investors at the time.
The Warren Buffett-backed company also provided initial guidance for fiscal 2024, expecting revenue between $36-$37 billion and anticipating deliveries of between 86,000 and 89,000 home units. DHI also expects share repurchases of around $1.5 billion in fiscal 2024, up from $1.2 billion in fiscal 2023.
Analysts' consensus has D.R. Horton fiscal 2024 revenue totaling $36.42 billion and deliveries of 87,637 homes, according to FactSet.
Warren Buffett's Berkshire Hathaway holds a 1.76% stake in D.R. Horton. Earlier this year Berkshire bet on the supply-constrained U.S. housing market with Warren Buffett opening new positions worth a total of more than $800 million in S&P 500 stocks Lennar, D.R. Horton and NVR.
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