Earnings Season Showdown: 4 Key Stocks to Watch on July 17, 2025 (USB, ABT, GE, NFLX)

As the Federal Reserve maintains a hawkish stance to combat inflation, investors are turning their attention to the July 17, 2025 earnings season for critical insights into how key stocks—U.S. Bancorp (USB), Abbott Laboratories (ABT), General Electric (GE), and Netflix (NFLX)—are navigating the tightening monetary environment. These four companies represent a cross-section of the market: banking, healthcare, industrials, and streaming. Their forward guidance and earnings momentum will offer clues about the resilience of corporate America amid higher borrowing costs and shifting consumer behavior.

1. Netflix: Content-Driven Growth vs. Valuation Concerns

Netflix (NFLX) is set to report Q2 2025 earnings with revenue expected to hit $11.05 billion, a 15.6% year-over-year increase, driven by price hikes, advertising revenue, and international expansion. The company's ad-supported tier has 94 million monthly users and is projected to double 2024's $2.15 billion in ad revenue to $5 billion by year-end. Strategic bets on live sports (NFL, WWE) and global hits like Squid Game and Baby Reindeer are fueling subscriber growth.

However, Netflix's valuation remains a headwind. With a forward P/E of 48x, the stock trades at a premium to its five-year average of 33.79x. While the company's free cash flow of $8 billion in 2025 underscores operational strength, the Fed's hawkish policy—raising discount rates for future cash flows—could pressure its stock. Analysts project a 6.94% average earnings beat, but a misstep in subscriber growth or ad monetization could trigger a re-rating.

2. U.S. Bancorp: Navigating Rate Hikes with Operational Discipline

U.S. Bancorp (USB) is expected to report Q2 earnings of $1.07 per share, a 9.2% increase year-over-year, with revenue of $7.06 billion. The bank's net interest income (NII) is projected to rise to $4.1–$4.2 billion, supported by the Fed's 4.25–4.5% rate hold in Q2. USB's efficiency ratio has improved to 59.1%, down from 61.0% in 2024, reflecting cost discipline and a diversified revenue model (e.g., card services up 9.9%, commercial lending up 2.4%).

Non-performing loans (NPLs) are expected to rise 1.8% sequentially to $1.72 billion but remain 4.9% below year-ago levels, signaling stable credit quality. With a forward P/E of 10.63x, USB is trading at a discount to the banking sector average of 12.20x, offering a margin of safety in a high-rate environment. The stock has gained 9.7% in the past month, outperforming the S&P 500.

3. Abbott Laboratories: Medical Necessity and Margin Expansion

Abbott (ABT) delivered Q2 revenue of $11.14 billion, with Medical Devices growing 13.4% (12.2% organic) and Diabetes Care (FreeStyle Libre) hitting $1.9 billion in sales. The company raised its 2025 guidance to $5.10–$5.20 per share, reflecting double-digit EPS growth. Abbott's adjusted operating margin expanded 100 basis points to 22.9%, driven by a stronger product mix and operational efficiency.

The hawkish Fed poses limited risk to Abbott, as healthcare demand remains inelastic. However, higher interest rates could increase the company's cost of debt. With a forward P/E of 25.48x, ABT trades above its industry average of 17.90x but offers a 30% dividend hike in 2025, appealing to income-focused investors.

4. General Electric: Aerospace Momentum and Valuation Risks

General Electric (GE) is expected to report Q2 earnings of $1.43 per share, a 19.17% increase year-over-year, driven by its Commercial Engines & Services segment, which posted a 23.8% operating margin in Q1. The company secured a $5 billion U.S. Air Force F110 engine contract, diversifying its revenue base. GE also plans a $7 billion stock buyback and a 30% dividend hike in 2025.

Yet, GE's forward P/E of 43.47x—well above peers like Raytheon (19.3x) and Howmet Aerospace (25.1x)—raises concerns. A 1-cent earnings miss could trigger a correction, especially after the stock gained 43.8% in three months. The Fed's hawkish policy increases capital costs for capital-intensive projects, and tariffs may disrupt supply chains.

Macro Tailwinds and Sector Dynamics

The Fed's 4.25–4.5% rate hold in Q2 has created a mixed environment. Banks like USB benefit from higher NII, while high-growth stocks like NFLX face valuation headwinds. Healthcare (ABT) and industrials (GE) occupy a middle ground, with inelastic demand offsetting some interest rate pressures.

Investors should monitor the July 17 earnings reports for clues about each company's ability to balance growth and margins. USB and ABT appear best positioned to outperform, given their defensive sectors and disciplined cost structures. NFLX's execution on advertising and content will determine whether its premium valuation is justified. GE's aerospace segment offers upside, but its valuation leaves little room for error.

Investment Takeaway:
- Buy: U.S. Bancorp (USB) for its low P/E, improving efficiency, and resilience in a high-rate environment.
- Hold: Abbott (ABT) for its strong cash flow and dividend growth, though valuation remains elevated.
- Watch Closely: Netflix (NFLX) and General Electric (GE) for earnings surprises and macroeconomic signals.

As the Fed's policy remains front and center, these four stocks will test the limits of earnings momentum and investor sentiment. July 17 could offer a pivotal moment for market positioning.