Yahoo Finance Trending tickers: Apple | Netflix | EasyJet | Alphabet
A look at the stocks making headlines on Tuesday
Apple (AAPL)
Investors were watching Apple stock on Tuesday after it opened its first retail store in India. The company showed its commitment to expand in the country, which it also plans to turn into a manufacturing hub.
The new shop, called Apple BKC, is in India’s financial capital, Mumbai. A second store is due to open on Thursday in New Delhi.
Tim Cook, Apple’s chief executive, said: “India has such a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history.”
Apple’s launch of a new savings account in the US — that will pay a market-leading 4.5% a year — has also whet the appetite of investors.
For those looking for better returns, it presents a challenge to the banks offering the average 0.37% saving rate.
Read more: FTSE 100 and European stocks rise as investors digest UK unemployment data
Deposit flows reported in some of the big bank earnings so far have also reflected how customers have been moving money into alternative products.
Charles Schwab (SCHW) on Monday said deposits fell 11% in the first quarter and 30% year-on-year, while M&T Bank (MTB) said total deposits had declined 3% from $163.5bn (£131.5bn) at the end of 2022 to $159.1bn.
Meanwhile, Apple’s stock opened 0.85% higher on Tuesday at 166.63 per share.
Netflix (NFLX)
The streaming service will report its first quarter earnings later on Tuesday as investors await updates on the company's recently launched ad-supported tier, in addition to its controversial crackdown on password-sharing.
Russ Mould, AJ Bell investment director, and Danni Hewson, AJ Bell head of financial analysis, said: “Even though they have more than doubled from 2022’s lows, shares in Netflix are pretty much flat over the past year and still 50% below their autumn 2021 peak.
“Bulls will argue the rally is justified because the initial fall was out of proportion to two quarters of missed subscriber growth estimates in the first half of 2022.
Read more: How Bank of England plans to prevent SVB-like bank runs
“They will also point to the rich catalogue of content and strong slate of shows, the launch of a new discounted ad-funded price package designed to win new subscribers and improved net customer additions in the second half of last year — Netflix added 7.7 million subs in Q4, well ahead of management’s guidance of 4.5 million.”
Bears will point to increased competition; the surging cost of content production; spotty cash flow; a balance sheet that carries not just $9.3bn of net debt, but more than $2bn in leases and nearly $22bn in guaranteed content purchase obligations, according to the analysts.
“The first number that analysts and shareholders will look for is net subscriber additions. After shedding 203,000 net subscribers in Q1 and 969,000 in Q2 (and that was much less than management’s forecast of an initial loss of 2 million), Netflix added a better-than-expected 2.4 million in Q3 and then a strong 7.7 million in Q4, to leave the company with 230.7 million paying subs at year end,” they added.
EasyJet (EZJ.L)
Shares in EasyJet rose nearly 3% to 524.20 on the London Stock Exchange (LSEG.L) as it continues its path back to financial safety with the expectations of a busy summer period to come.
Richard Hunter, head of markets at Interactive Investor, said EasyJet now expects revenues for the half-year to rise to £2.69bn from a previous £1.5bn and for the pre-tax loss number to reduce from £545m to between £405m and £425m.
“For the full year, EasyJet anticipates exceeding market expectations for a profit of £260m given the high demand and strong bookings which it is already seeing,” Hunter said.
“Indeed, Easter capacity in the UK returned to pre-pandemic levels, and is expected to remain there in peak summer, following an increase in capacity of 40% between January and March. For the second quarter, the group saw passengers increase by 35% year-on-year, with revenue per seat spiking by 43% and with a load factor of 88%, compared to a previous 78%.”
Read more: UK pay growth jumps as unemployment rate rises
Further progress has also been made in the reduction of EasyJet’s net debt, which has reduced from £1.1bn at the end of 2022 to a current £0.2bn.
But said it is still fighting higher fuel and operating costs and the return of air traffic control strikes.
“The big unknown is demand for last-minute breaks. While advance bookings have been encouraging, the more plane tickets go up in value, the more certain people will be priced out of taking a foreign holiday," said Mould.
“Jet fuel prices have been falling, yet airlines are unlikely to cut their ticket prices when they’re still playing earnings catch-up from the pandemic. The industry will probably take the bet that consumers cave into higher prices and accept their holiday is going to cost more this summer. That’s a risky move, but airlines have form in getting every last penny from the customer.”
Alphabet (GOOG)
Traders will also be watching Alphabet stock to see how it recovers after it lost nearly 4% on Monday, erasing about $55bn in its market value. At market open in the US on Tuesday, the stock declined a further 0.46% to 105.93.
It comes after a report from The New York Times suggested that competition was heating up in the mobile search market.
The report said that Samsung could replace Google as the default search engine on its devices with Microsoft’s (MSFT) Bing Search instead.
Read more: Alphabet stock declines following Google CEO Sundar Pichai’s warning on AI
However, Alphabet is working hard to maintain its market share with some 160 people working to incorporate artificial intelligence features into its search product, according to the New York Times.
The stock decline also followed comments from Google’s chief executive warning about the capabilities of artificial intelligence.
Sundar Pichai said that the push to implement AI must be better regulated to avoid negative consequences and that it could have harmful effects on society.
Watch: Fan greets Tim Cook with Macintosh at India's first Apple store
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