Tuesday morning gave investors another good opening on Wall Street, as markets continued to ride their upward momentum following good news on the trade front recently. With some hope that the U.S. and China will be able to resolve their disputes and reduce the extent to which tariffs have disrupted both nations’ economies, investors seem ready to give the stock market a year-end rally. As of just before 11 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 50 points to 28,285. The S&P 500 (SNPINDEX:^GSPC) rose 3 points to 3,195, and the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 2 points to 8,816.
Several stocks posted larger gains. Netflix (NASDAQ:NFLX) grabbed some attention by releasing some interesting data about its streaming video business, while Johnson & Johnson (NYSE:JNJ) finally got the recognition it arguably deserves from Wall Street analysts.
Netflix breaks down its subscriber base
Shares of Netflix were up 3% after the streaming video specialist released some detailed numbers on its worldwide subscriber base. In a filing with the U.S. Securities and Exchange Commission, the company gave regional subscription and revenue numbers going back to 2017.
Image source: Netflix.
Many investors have been concerned about the state of the U.S. streaming video market, given that Netflix has focused on the U.S. market since its start, and competitors are starting to challenge the company. Over the past couple of years, Netflix has continued to see growth domestically, with subscriber counts going from 58.4 million at the end of 2017 to 67.1 million as of the third quarter of 2019.
However, overseas growth has been a lot faster. In its European segment, Netflix went from having 26 million subscribers at the end of 2017 to 37.8 million last quarter. In Latin America, the same numbers went from 19.7 million to 29.4 million, and in the Asia-Pacific region, Netflix now boasts 14.5 million subscribers, up from 6.5 million in 2017’s fourth quarter.
Netflix has had to deal with rising currency impacts as a result of its international business, which have added some volatility to its revenue figures. Nevertheless, for those who’ve worried about the state of Netflix’s domestic business, it’s smart to look beyond the borders of the U.S. to see its promise globally.
J&J gets a vote of confidence
Shares of Johnson & Johnson climbed 1% after the healthcare giant got positive comments from a prominent Wall Street analyst. Morgan Stanley had favorable things to say about the healthcare industry generally, but it identified J&J as deserving of far more attention than it’s getting from investors currently.
Morgan Stanley upgraded shares of J&J from equal weight to overweight, boosting its price target on the stock by $25 to $170. The analyst company had good things to say about J&J’s strategy, noting that many of the fears that increased regulation could affect its key pharmaceutical business now appear to have been overblown. If the pharma segment can see accelerating growth in the coming year, then it could attract more investors, who’ve generally tended not to follow J&J as they wait to see what lawmakers will do on the regulatory front.
In addition, though, Johnson & Johnson has worked to go beyond pharmaceuticals for growth prospects. Efforts to bolster its medical devices business have also paid off, and Morgan Stanley believes that the healthcare giant will see rising revenue in that area as well.
Many see Johnson & Johnson more as a stalwart dividend stock than as having strong prospects for growth. But if Morgan Stanley is right, then J&J could well be at the beginning of a growth spurt that could send its share price higher in 2020.