5 Stocks to Watch in October
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With Autumn now in full swing, another earnings season is right around the corner. October will feature quarterly reports from some of the largest, most important companies on the planet, as well as from an abundance of smaller companies. There will be no shortage of data this month for investors to chew on.
Of all the companies getting ready to report earnings, five stand out. Here's a brief look at what investors can expect from Apple (NASDAQ: AAPL), Wells Fargo (NYSE: WFC), Intel (NASDAQ: INTC), General Motors (NYSE: GM), and Netflix (NASDAQ: NFLX).
Apple
Following two quarters of declining iPhone sales, the iPhone 7 launch in September has the potential to give Apple a much-needed boost. Apple declined to disclose sales figures for the launch weekend, as it has done for each previous iPhone launch, but strong pre-order numbers from T-Mobile and Sprint have raised hopes that the iPhone 7 will return the company to growth.
Apple will report its fiscal fourth-quarter results after the market close on Oct. 27. With the quarter ending just a few weeks after the launch of the iPhone 7, and with the ever-important holiday season ahead, Apple's results won't give investors the full picture. Guidance for the first fiscal quarter will be closely watched: If Apple fails to predict growth, the stock's recent run will almost certainly come to an end.
Wells Fargo
At this point, it's unclear exactly what kind of damage the ongoing fake account scandal at Wells Fargo will cause. The bank's intense focus on cross-selling products led to fraud that could hurt its reputation for years to come. Already, both California and Illinois have suspended some of its business with Wells Fargo,, and that may end up being just the tip of the iceberg.
Wells Fargo will report its third-quarter results before the market opens on Oct. 14. Investors will be looking for answers, and with pressure on CEO John Stumpf to resign following two blistering congressional hearings, an executive shakeup could be in the cards. The company may not go into much detail regarding its outlook, but investors will be expecting a plan. Whether Wells Fargo can continue to be one of the best performing big banks following this scandal remains to be seen.
Intel
Chip-giant Intel will report its third-quarter results after the market close on Oct. 18. The stock is sitting near decade highs, with continued data-center growth and an improving market for PCs boosting the stock in recent months. Intel raised its third-quarter guidance in September, boosting its revenue outlook by $700 million, driven by replenishment of PC supply-chain inventory and improving PC demand. News that Intel was supplying modems for a portion of Apple's iPhone 7 and iPhone 7 Plus phones no doubt contributed to the stock's recent performance.
Advanced Micro Devices will make an attempt to claw back share in both the PC CPU and server CPU markets next year with its upcoming Zen processors, but Intel remains the overwhelming leader for the time being. The PC market is still slumping, with IDC reporting a 4.5% year-over-year unit shipment decline during the second quarter. That decline, however, was smaller than expected, raising hopes that the market could stabilize sooner rather than later, an event that would be a boon for Intel.
General Motors
Following a strong September, General Motors has gained U.S retail market share in 15 of the past 18 months. With the stock trading at barely more than five times General Motors' guidance for full-year adjusted earnings, the market is betting that plateauing demand for vehicles in the U.S. will devastate the company's bottom line. General Motors has yet to show any signs that this will be the case.
General Motors will report its third-quarter results before the market opens on Oct. 25. The company has beaten analyst estimates across the board for four quarters in a row. With analysts expecting a small drop in earnings during the third quarter, General Motors may have yet another surprise up its sleeve.
Investors should also be on the lookout for more details on the upcoming launch of the Chevy Bolt, General Motors' affordable electric car. With a range of more than 200 miles and a price tag below $30,000 after incentives, the Bolt is proof that General Motors still knows how to innovate.
Netflix
Streaming-giant Netflix gave investors quite the scare in July. The company added just 1.68 million subscribers globally, down from 3.28 million during the prior-year period. The company's guidance was also nothing to write home about, with 2.3 million subscribers expected to be added during the third quarter, down from 3.62 million during the third quarter of 2015.
Netflix will report its third-quarter results after the market close on Oct. 17. Netflix has spent heavily expanding into international markets in recent years, and the company's bottom line has nearly disappeared as a result. But with that expansion now complete, Netflix will need to produce both robust subscriber growth and improving profitability going forward in order to justify its optimistic valuation. Another disappointment could send the stock tumbling.
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Timothy Green owns shares of General Motors. The Motley Fool owns shares of and recommends Apple, Netflix, and Wells Fargo. The Motley Fool has the following options: long January 2018 $90 calls on Apple, short January 2018 $95 calls on Apple, and short October 2016 $50 calls on Wells Fargo. The Motley Fool recommends General Motors, Intel, and T-Mobile US. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.