Netflix, DuPont, Abbott Laboratories: Trending Tickers

Netflix (NFLX) shares surged after the streaming giant's strong fourth-quarter results beat on earnings estimates and notched over 13 million new subscribers. High free cash flow and margins also exceeded estimates on the heels of Netflix's WWE deal announcement.

DuPont de Nemours (DD) sank after issuing light first-quarter sales guidance, citing China and demand slowdowns. The chemical maker's official results are expected out February 6.

Abbott Laboratories (ABT) slid as well despite coming in line with earnings expectations. However, the healthcare company's full-year 2024 forecast came in below expectations weighing on shares.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

JOSH LIPTON: All right, let's check in on some of today's top trending tickers. You've got to start with Netflix here look at that move, soaring in today's trading, the back of that big earnings beat as fourth quarter subscriber additions surge. So Netflix talked about, Julie, as the king of streaming because it's got the profits, it's got the scale, and it certainly looks like the King in today's trade.

Analysts pointing out the positives, of course, the 13.1 million new customers in the quarter, crushed the Street's estimates there. They also liked the record high Q4 17% operating margin. That was a nice bogey to hit. And free cash flow also came in higher than expected.

JULIE HYMAN: Yeah. The company did say-- I mean, a lot of the folks, we have been hearing from-- have been saying it's tough to find anything negative in this report. And that's reflected in the stock price action today. The company did say the momentum of its subscriber additions is not going to be at the same level in the first quarter. But it's likely to pursue its continued strategy of raising prices. And so its sales growth will still maintain momentum. And the company is going to also focus on building out that ad tier even more.

The company, remember, said earlier this month it has more than 23 million people who are using that ad tier. They didn't give any more numbers around that on the call, but we can go with that number and they're going to focus on adding more customers to that tier in particular. You know, it's funny as we look at this 12% gain in the stock, I'd looked into-- is this the best gain since whenever post-earnings? Only since the last time.

In other words, Netflix tends to move a lot in either direction. After earnings last time, it also had a big gain of, I think, about 16% after its earnings report. And the stock is up 62-- it was up 62% in 2023.

JOSH LIPTON: Is it because sometimes when you see a rip, like, that you think, OK, so what are the catalysts ahead? And I thought it was interesting Michael Pachter over Wedbush. We know-- we know Michael very well. He does see catalysts. He sees advertising potential basically talking about that new WWE deal we were talking about. He's betting on gaming expansion. And he says growth in viewership, he's looking for on that cheaper ad tier. Pachter actually raised his target, goes to 615 on the stock.

JULIE HYMAN: Interesting. All right. Let's talk about one that's going in the opposite direction and then some. DuPont sliding after the chemical maker issued weak guidance for the first quarter. It says now net sales are going to be $2.8 billion. The Street had been looking for $3 billion. This is a pre-announcement. By the way, the company comes out with its full results on February 6 here.

The company says China is part of the issue here and so-called destocking of inventory. That means, if I'm a customer of DuPont and I have a bunch of stuff, I'm just working through that inventory rather than ordering more. It's just, I guess, a euphemism for waning demand for some of DuPont's products.

JOSH LIPTON: Yeah. And most on the street actually still like this name, but we did see some analysts coming out. They took out the red pen and start taking down their ratings. BMO, for example, they go to market perform, so a whole-- they take their target down to 72, it looks like.

Talking about how rest of the year could be below their estimates, they told their clients the significant buybacks, they point out. Not enough in their opinion at least to offset the challenges-- that offset the challenging market they see. Head stock is in the red this year and over the last 12 months as well.

JULIE HYMAN: Not just over the last year, this stock has fallen for three straight years here. 20% of its sales come from China, by the way. So that is-- you know, that's a big chunk and perhaps a persistent issue. Just to mention a little bit of the background here, it's a little complicated. But remember, Dow and DuPont combined some businesses and then spun off some businesses. And so that's the DuPont that remains is sort of that altered business, if you will.

JOSH LIPTON: Yep. All right. Let's get to last one here. Shares of Abbott Laboratories, they are falling in today's trade. That's after the company issued in-line guidance for 2024 despite topping revenue expectations in Q4. So this one, Julie, it looks like Q4 sales and profit, they come in line. And now maybe that disappointed some investors today.

Worth pointing out, you know, some on the street who cover this name say they shouldn't be disappointed, that typically the company doesn't produce they say much EPS upside in this quarter-- in Q4. Raymond James, for example, telling clients they look at the results and say, in their opinion, the overall the business is growing well and guidance implies. They think that trend kind of continues. But clearly, some disappointed.

JULIE HYMAN: Yeah. It was interesting because there was a little bit of a disconnect-- this is one of those situations where there's a little bit of disconnect between some of the analyst commentary around it and what the stock is doing. It's not down that much, but even still.

I also thought it was interesting here what Abbott had to say about its place in the obesity product market.

JOSH LIPTON: Nutrition business, they talked a lot about.

JULIE HYMAN: They talked about maybe getting more into things like protein shakes and investing more in adult nutrition. As they see the GLP-1 wave out, they're kind of trying to figure out how they're going to be part of that. So they said they're going to put some money to work in figuring that out, it sounds like.

JOSH LIPTON: Yeah. It sounded like they said that business, they thought, could grow this year above the pre-pandemic range. But obviously, some investors still disappoint, at least initially. We'll see how it kind of shakes out.

JULIE HYMAN: We will.