Top 10 things to watch Friday, Aug. 11 Stocks are lower to end the week. The S & P 500 is on track for a small weekly decline. After yesterday’s benign CPI report, July producer price index come in a little hotter than expected up 0.3% month over month versus 0.2% expected. The Dow is holding up better in August on the strength of some industrials including Club name Caterpillar (CAT). Read how more than a trillion dollars of government infrastructure spending can benefit CAT and two others . Apple (AAPL) and Nvidia (NVDA), the Club’s two “own it, don’t trade it” stocks and big 2023 winners, are under pressure again early Friday. Here’s our commentary on what’s going on. Meanwhile, Apple is oversold. Nvidia is neutral. See where four other mega-caps stand . Club name Stanley Black & Decker (SWK) gets downgraded to underperform from peer perform (sell from hold) by Wolf Research, largely due to valuation. The analysts think management’s plan to reduce costs by $2 billion, which would set the company on a path to earn more than $7 per share in 2025, is the bull case scenario and not the base case. Our pushback is that the company is ahead of plan on its global reduction program so we have no reason to doubt them as of now. If the housing market has bottomed, Stanley should see a big upswing in its business. Leverage is high, but free cash flow generation is improving and can support the 3.4% dividend. Citi thinks the global pharmaceutical sector could rally if a federal judge rules in favor of Merck (MRK) in the company’s lawsuit over a drug prices program of the Inflation Reduction Act. Citi sees a “non-zero probability” of this happening and thinks a ruling could come as early as the first quarter of 2024. The group sorely needs it as many stocks have traded poorly except for Club name Eli Lilly (LLY). Citi opens a 30-day upside catalyst watch on Cisco Systems (CSCO) ahead of its quarter. The analyst expects the company will outperform peers Arista Networks (ANET) and Juniper Networks (JNPR) due to strong enterprise demand. Piper Sandler is the latest to opine on Club name Palo Alto Networks’ (PANW) upcoming Friday night earnings report and analyst update. The analysts think earnings “should prove more durable than perceived” but there are some risks around mid-term free cash flow targets due to billings compression that is happening for many companies in the industry. Still, Piper sees this as transitory and doesn’t impact their thinking of their five-year view of the cybersecurity leader. They reiterate PANW as one of their top picks in their coverage. Target (TGT) price target lowered to $142 per share from $163 by Barclays; and $160 from $200 by Guggenheim ahead of earnings next Wednesday. Credit Suisse raises its earnings estimates and price target on Walmart (WMT) to $180 from $170 ahead of its report next week. Club name Pioneer Natural Resources (PXD) price target raised to $281 per share from $275 at Stifel. Still one of the better quarters of the group thus far. Recently, brought some more Coterra Energy (CTRA) on a dip and sold some Halliburton (HAL) after a run. Energy has quietly been a market leader in recent weeks. JPMorgan stays positive on Netflix (NFLX) despite its 8 percentage point underperformance versus the S & P 500 since 2Q earnings. Argus upgrades Twilio (TWLO) to buy from hold. Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Top 10 things to watch Friday, Aug. 11
Stocks are lower to end the week. The S&P 500 is on track for a small weekly decline. After yesterday’s benign CPI report, July producer price index come in a little hotter than expected up 0.3% month over month versus 0.2% expected. The Dow is holding up better in August on the strength of some industrials including Club name Caterpillar (CAT). Read how more than a trillion dollars of government infrastructure spending can benefit CAT and two others.
Club name Stanley Black & Decker (SWK) gets downgraded to underperform from peer perform (sell from hold) by Wolf Research, largely due to valuation. The analysts think management’s plan to reduce costs by $2 billion, which would set the company on a path to earn more than $7 per share in 2025, is the bull case scenario and not the base case. Our pushback is that the company is ahead of plan on its global reduction program so we have no reason to doubt them as of now. If the housing market has bottomed, Stanley should see a big upswing in its business. Leverage is high, but free cash flow generation is improving and can support the 3.4% dividend.
Citi thinks the global pharmaceutical sector could rally if a federal judge rules in favor of Merck (MRK) in the company’s lawsuit over a drug prices program of the Inflation Reduction Act. Citi sees a “non-zero probability” of this happening and thinks a ruling could come as early as the first quarter of 2024. The group sorely needs it as many stocks have traded poorly except for Club name Eli Lilly (LLY).
Citi opens a 30-day upside catalyst watch on Cisco Systems (CSCO) ahead of its quarter. The analyst expects the company will outperform peers Arista Networks (ANET) and Juniper Networks (JNPR) due to strong enterprise demand.
Piper Sandler is the latest to opine on Club name Palo Alto Networks’ (PANW) upcoming Friday night earnings report and analyst update. The analysts think earnings “should prove more durable than perceived” but there are some risks around mid-term free cash flow targets due to billings compression that is happening for many companies in the industry. Still, Piper sees this as transitory and doesn’t impact their thinking of their five-year view of the cybersecurity leader. They reiterate PANW as one of their top picks in their coverage.
Target (TGT) price target lowered to $142 per share from $163 by Barclays; and $160 from $200 by Guggenheim ahead of earnings next Wednesday. Credit Suisse raises its earnings estimates and price target on Walmart (WMT) to $180 from $170 ahead of its report next week.
Club name Pioneer Natural Resources (PXD) price target raised to $281 per share from $275 at Stifel. Still one of the better quarters of the group thus far. Recently, brought some more Coterra Energy (CTRA) on a dip and sold some Halliburton (HAL) after a run. Energy has quietly been a market leader in recent weeks.
JPMorgan stays positive on Netflix (NFLX) despite its 8 percentage point underperformance versus the S&P 500 since 2Q earnings.
(See here for a full list of the stocks at Jim Cramer’s Charitable Trust.)
As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.
THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
A rendering of Telesat’s low earth orbit broadband constellation Telesat Shares of Canadian telecommunications satellite operator Telesat surged on Friday after the company announced it would swap suppliers for its planned Lightspeed global internet network. Canadian space company MDA will now build the Lightspeed satellites, taking the place of French-Italian […]
