Analyst Spotlight: Top Picks from Netflix, General Motors, and Wingstop Amid Earnings Season

As earnings season unfolds, top Wall Street analysts are focusing not just on short-term stock movements triggered by quarterly results but also on the long-term prospects of companies they follow closely. This article explores three such stocks favoured by renowned market experts tracked by TipRanks, a platform that ranks analysts based on their past performance: Netflix (NFLX), General Motors (GM) and Wingstop (WING).
Netflix has drawn mixed reactions from investors following its latest financial results for the first quarter of 2024. While the streaming giant surpassed expectations in terms of subscriber additions, it decided to stop reporting such figures going forward as it now places more emphasis on revenue and operation margin metrics instead. BMO Capital analyst Brian Pitz remained bullish about NFLX stock following its Q1 performance update. The analyst maintained his “buy” rating for the company’s shares while increasing the price target from $698 to $713, highlighting Netflix’s impressive addition of 9.3 million subscribers during this period – significantly exceeding BMO’s estimate and Street expectations alike (which were pegged at approximately four million new customers). Furthermore, Pitz acknowledged that NFLX continues demonstrating its capacity for growth in the US market by adding over two-and-a-half million net members to its subscriber base during Q1 alone. The analyst also noted Netflix’s plans to improve operating margins this year and beyond through a combination of content investments (totalling $17 billion in 2024), expected enhancements across areas like revenue margin and user acquisition, and a push into online advertising that could see around $8bn worth of TV ad dollars move from linear TV to connected televisions by the end of 2026.
GM announced solid first-quarter results while also raising its full-year guidance on account of strong performance in North America during Q1, and Goldman Sachs analyst Mark Delaney responded favourably following this news release by keeping his “buy” rating for GM shares unchanged but lifting the price target from $50 to $52. The upgraded valuation estimate reflects Delaney’s revised earnings per share (EPS) forecasts, which now factor in improved margin expectations as a result of cost and efficiency measures alongside relatively stable pricing trends that he expects will continue throughout this year. In his report issued following the publication of GM’s results on May 3, 2021, Delaney commended General Motors for its “continued progress” towards achieving positive variable profitability from electric vehicles (EV) in H2 ’24 and mid-single digit earnings before interest & taxes margins by 2025.
Finally, Wingstop has also attracted attention from market analysts after Baird’s David Tarantino highlighted the potential for upside to its previously set long term goal regarding U.S expansion capacity amid promising unit returns averaging around 70% in terms of cash-on-cash across franchised locations, according to his most recent note released on April 30,2021 which kept a “buy” rating and price target ($390) for WING stock unchanged. Tarantino’s analysis suggests that Wingstop could realistically surpass its domestic market expansion objective of over four thousand restaurants in the US due to what he sees as room left to grow, even after factoring Baird’s estimate regarding an enlarged total addressable market (TAM) for this segment. The analyst also highlighted a relatively open-ended international growth opportunity beyond 2023 and estimated that Wingstop’s unit level cash on cash returns are already around seventy percent in the US franchised locations, with further increases expected during FY ’21 thanks to higher average sales volumes (per unit).