Stocks: Under Armour bucks market losses, Netflix plunges, Ford down, Ally Financial dips
Yahoo Finance's Emily McCormick and Adam Shapiro discuss the top trending stocks they are looking at this week.
EMILY MCCORMICK: Well, let's shift now for our [? 2&2-- ?] two stocks I'm watching, and two stocks that Adam is watching during today's session. And let's take a look at shares of Under Armour, because this is one stock that is bucking the downward trend of the broader market. And that's after an upgrade from Citigroup. Now, the Wall Street firm raised its recommendation on shares of Under Armour to Buy from Neutral. And according to a Bloomberg report citing the note from this firm, Citigroup analysts wrote, quote, "Under Armor is emerging from the pandemic in a much stronger position in North America with inventory cleaned, distribution rationalized, the brand identity more clearly defined, and with its product assortment in good shape."
Now, Citigroup also sees Under Armour relatively low in terms of penetration in China, and sees that as a long-term growth opportunity on a geographic basis. Now Under Armour, recall, last reported much stronger than expected third quarter results back in November, with revenue up 8% over last year to reach about $1.6 billion. And revenue from Under Armour's biggest North American geographical segment also rose 8% with international sales up 18%. Now, the stock has underperformed against the S&P 500 over the past year, rising just 2% over that time period, though Citigroup also highlighted that Under Armour has an attractive valuation compared to peers like Nike and Lululemon.
Now let's switch gears to talk about Ally Financial, because this company reported earnings results earlier this morning. Those were better than expected, though the stock, as we can see, is down this afternoon. And net revenue was up 11% over last year to $2.2 billion-- or ahead of Wall Street's estimates, for $2.7 billion-- and adjusted earnings per share of $2.02 were up about 26% compared to last year. Now, the one metric that Wall Street may not be liking quite as much is on Ally's higher provision for credit losses. That came, in part, because of the company's acquisition of Fair Square Financial, and also, Ally did have higher non-interest expenses.
Now, finally, I do want to highlight that Ally got a boost from strong auto demand last year, and it noted that consumer auto originations were up 20% to $10.9 billion, topping expectations. Now, nevertheless, should note that that stock is down about 4%. So really tracking the broader downward trend in the broader markets. Not getting a boost here on these earnings results. Adam?
ADAM SHAPIRO: Emily, I want to follow up after we got the earnings from Netflix. What's going on there? I mean, "Emily in Paris" might say sacre bleu. If you're a fan of "Ozark," which comes back tonight-- yes, I'm a fan-- they use a different word. Again, one of those words that you can't say on TV. Shares were down at 1.25%. Not much better right now.
They reported earnings yesterday. Disappointed investors not on the earnings, but on future subscriber growth. That, by the way, has had the effect of pulling down other streaming services-- for instance, Disney. Those shares were falling about 6% earlier today.
Roku was off by about 7%. FuboTV off by about 9% right now. So here's what's going on. JP Morgan and Piper Sandler both have overweight ratings on Netflix despite that subscriber growth story.
Take a look at Ford. I mean, who doesn't love cars? Right, OK, I get it. The Gen Z and the [? iGen, ?] they don't like cars. But shares of Ford down 3%. Jefferies downgraded Ford from Buy to Hold. RBC downgraded from Outperform to Sector Perform. Here's what's going on.
There's a lot of concern that investors were overly optimistic with Ford's potential regarding EVs. You've got the Mustang. The Mach is doing very well. You also have the orders for the F-150 Lightning, which are off the charts. But Adam Jonas over at Morgan Stanley burst that bubble, what, about a week ago, when he came out and said he had an underweight rating on Ford, and predicted that the stock at the time could lose 52% of its value, dropping down to $12 a share.