Tag: NVIDIA Corp

October 29, 2023

Top Wall Street analysts remain optimistic about these five stocks

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The Netflix logo is seen on a TV remote controller in this illustration taken Jan. 20, 2022.

Dado Ruvic | Reuters

As the earnings season rolls on, investors are getting a glimpse into how companies are handling an array of macro pressures.

Analysts can pick apart these quarterly reports and help investors identify companies that can withstand near-term challenges and deliver attractive returns in the long term.

To that end, here are five stocks favored by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Netflix

Streaming giant Netflix (NFLX) recently delivered a beat on third-quarter earnings per share, with its crackdown on password sharing helping to add more subscribers to its platform.

Evercore analyst Mark Mahaney said that there were several key positives in the company’s third-quarter print, including 8.76 million subscriber additions, stronger-than-anticipated Q4 2023 subscriber addition guidance, and share buybacks of $2.5 billion. He also noted an increase in the 2023 free cash flow outlook to about $6.5 billion, from the previous guidance of at least $5 billion and a price hike for the basic and premium plans.

“We continue to believe that NFLX’s ad-supported offering and password-sharing initiatives constitute major Growth Curve Initiatives [GCI] – catalysts that will drive a material reacceleration in revenue and EPS growth,” said Mahaney.    

The analyst thinks that the company is pursuing these GCI catalysts from a position of strength, given that it is a global streaming leader based on several metrics, including revenue, subscriber base and viewing hours.

Mahaney reiterated a buy rating on NFLX stock with a price target of $500. Interestingly, Mahaney ranks No. 48 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 55% of the time, with each delivering a return of 25.4%, on average. (See Netflix Technical Analysis on TipRanks)

Nvidia

Next up is semiconductor giant Nvidia (NVDA). The stock has witnessed a stellar run this year, thanks to demand for NVDA’s chips in building generative artificial intelligence (AI) models and applications.

In a recently updated investor presentation, the company revealed roadmaps for its data center graphics processing units, central processing units and networking chipsets.

JPMorgan analyst Harlan Sur, who holds the 88th position out of more than 8,500 analysts on TipRanks, noted that NVDA’s product roadmaps indicate two major shifts. First, Nvidia has accelerated its product launch timing from a 2-year cycle to a 1-year cycle, which is expected to help the company keep pace with the growing complexity of large language compute workloads.

Regarding the second major shift, Sur said that the roadmaps indicated “more market segmentation (cloud/hyperscale/enterprise) by expanding the number of product SKUs [stock keeping units] that are optimized for a broad spectrum of AI workloads (training/inference).”

The analyst thinks that with these notable developments, the company is taking a multi-pronged approach to strengthen its data center market and technology. He reaffirmed a buy rating on the stock with a price target of $600, noting the growing demand for NVDA’s accelerated compute and networking silicon platforms and software solutions in the development of generative AI and large language models.

Sur’s ratings have been successful 64% of the time, with each rating delivering an average return of 18.2%. (See Nvidia Insider Trading Activity on TipRanks).

Instacart

Grocery delivery platform Instacart (CART) made its much-awaited stock market debut in September. Baird analyst Colin Sebastian recently initiated a buy rating on CART stock with a price target of $31.

Explaining his bullish stance, Sebastian said, “Despite a range of well-financed online and legacy retail competitors, Instacart enjoys an enviable combination of scale, retail integrations, vertical expertise, and proprietary technology.”

The analyst highlighted that the essence of Instacart’s business model is an asset-light partnership strategy. He also thinks that Instacart’s data and technology sophistication are its key competitive advantages. He believes that most food retailers might not be able to build similar internal e-commerce capabilities.

Most importantly, Sebastian views Instacart’s advertising business as one of the most successful launches of retail media, second only to e-commerce behemoth Amazon (AMZN). He pointed out that consumer packaged goods advertisers are promoting their products by leveraging Instacart’s performance ad formats that help in reaching target customers with relevant product ideas.   

Sebastian holds the 340th position among more than 8,500 analysts on TipRanks. His ratings have been successful 52% of the time, with each rating delivering an average return of 10.7%. (See Instacart Options Activity on TipRanks).

SLB

Oilfield services company SLB (SLB), formerly Schlumberger, recently reported better-than-expected third-quarter adjusted earnings. SLB stated that the oil and gas industry continues to gain from a multi-year growth cycle that has shifted to international and offshore markets, where the company claims to enjoy a dominant position.       

Goldman Sachs analyst Neil Mehta contends that while there are no clear near-term catalysts for SLB stock, the long-term growth story remains intact due to resilient customer spending. The analyst highlighted that Saudi Aramco is expected to spend about $245 billion through 2030, reflecting about 5% to 6% annual growth. Further, additional spending (at a modest growth rate) is anticipated from the United Arab Emirates’ ADNOC, Qatar and other players in the region.

Given that 80% of SLB’s revenue is from international and offshore markets, Mehta is confident that the company is well-positioned to leverage the long-term momentum in the Middle East. 

“SLB remains the preferred way to gain exposure to the international and offshore theme, with additional growth drivers in the expansion of its digital footprint with customers, which is margin accretive at ~40-45%, in our view,” said Mehta. 

Calling SLB a structural winner, particularly during pullbacks, Mehta reiterated a buy rating on the stock with a price target of $65. He ranks No. 155 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 65% of the time, with each delivering an average return of 12.5%. (See SLB’s Stock Charts on TipRanks) 

Tesla

Our final name this week is electric vehicle maker Tesla (TSLA). The company missed earnings and revenue guidance for the third quarter, with macro pressures, a highly competitive EV market and aggressive price cuts affecting its performance.

Mizuho analyst Vijay Rakesh noted that despite the sequential decline in the company’s Q3 gross and operating margin due to lower pricing and Cybertruck R&D expenses, they remain at the high end of the margins of legacy automakers and way above rival EV makers’ margins.

The analyst lowered his price target for TSLA stock to $310 from $330 to reflect near-term headwinds like margin pressure, macro weakness and Cybertruck ramp challenges. Nevertheless, he reiterated a buy rating, noting that the stock still trades at a discount to disruptors such as Nvidia, while also generating profitability at scale.

“We believe TSLA is prioritizing market share, technology, and cost leadership and is better positioned than peers to weather any turbulence to the broader Auto market,” said Rakesh.

Rakesh ranks No. 82 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 57% of the time, with each delivering a return of 18.6%, on average. (See Tesla Financial Statements on TipRanks)

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September 24, 2023

Top Wall Street analysts are bullish on these dividend stocks

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Michael Wirth, CEO of Chevron.

Adam Jeffery | CNBC

Dividend-paying stocks can help enhance portfolio returns, but investors will need to perform their due diligence as they sift through the names.

Investors should carefully assess these companies by paying attention to various factors, including the dividend growth rate and the ability to consistently generate sufficient cash flows to support payments.

Bearing that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Public Service Enterprise Group

First on this week’s dividend list is Public Service Enterprise Group (PEG), one of the leading electric and gas companies in the U.S. Last month, PEG reaffirmed its full-year earnings guidance, as the company expects growth in regulated operations, the realization of higher average hedged prices and its cost control efforts to offset the impact of higher interest rates and lower pension income.

Earlier this year, PEG increased its quarterly dividend by 5.6% to 57 cents per share (annualized dividend of $2.28), marking the 19th annual increase for the company. PEG’s dividend yield is 3.8%.

RBC Capital analyst Shelby Tucker highlighted that PEG’s subsidiary Public Service Electric and Gas (PSE&G), which is a franchised public utility in New Jersey, enjoys solid cash flows from the nuclear assets in its power generation business.

While the company faces cost and pension expense headwinds this year, the analyst expects a 6% EPS compound annual growth rate through 2027 and 5.5% annual dividend growth.

“We believe the primary attraction to PEG is a strong pipeline of electric and gas investments in New Jersey with low equity dilution risk,” said Tucker.

Tucker reiterated a buy rating on PEG while slightly lowering the price target to $69 from $70. He ranks No. 305 among more than 8,500 analysts tracked by TipRanks. Tucker’s ratings have been profitable 63% of the time, with each rating delivering a return of 9%, on average. (See PEG’s Insider Trading Activity on TipRanks)

Southern Company

Tucker is also bullish on Southern Company (SO), a gas and electric utility giant. Earlier this month, the analyst called SO a “quality utility operating in constructive regulatory environments.” He reiterated a buy rating on the stock and increased the price target to $80 from $78.

With the company’s much-delayed Vogtle nuclear project’s commercial operation date on the horizon, the analyst thinks that investors are finally hopeful of better times ahead. The company expects its Vogtle Unit 4 to be placed in service during late fourth quarter of 2023 or the first quarter of 2024.

The analyst sees the possibility of SO commanding a premium compared to its peers as the year progresses and heads into 2024. Post-Vogtle, Tucker expects the company to accelerate its EPS growth and use the higher cash flows to boost dividends.

Note that in April, Southern announced a 2.9% increase in its quarterly dividend to $0.70. This is the 22nd consecutive year in which SO has raised its dividend. SO offers a dividend yield of 4%.  

“We note that SO’s utilities mostly operate in strong economic environments, which should support investment opportunities throughout the decade,” said Tucker. (See Southern Company Stock Chart on TipRanks)

Chevron

Next up is dividend aristocrat Chevron (CVX). In January, the oil and gas giant increased its quarterly dividend by about 6% to $1.51 per share, making 2023 the 36th straight year with a higher dividend payment. CVX’s dividend yield stands at 3.6%.

On Sept. 13, Goldman Sachs hosted roundtable discussions with Chevron’s senior management. Analyst Neil Mehta said that the firm remains bullish on CVX due to its peer-leading capital returns profile, inflecting upstream operations expected in 2025 supported by higher Tengiz/Permian volumes and relative valuation.

The analyst contends that near-term pressures like risks around the Tengiz project are largely reflected in CVX’s valuation. He highlighted management’s constructive view on the upstream business, reaffirming nearly 3% CAGR forecast for production over the next five years.

“The company reiterated its commitment to competitive shareholder returns, which we believe is a core differentiating factor for CVX over the next few years,” added Mehta, who ranks No. 181 among more than 8,500 analysts on TipRanks. 

The analyst currently expects about a 9% capital return yield in 2024/2025, higher than the U.S. energy majors peer average of about 7%. Overall, Mehta reiterated a buy rating on Chevron with a price target of $187.

Mehta’s ratings have been successful 67% of the time, with each rating delivering an average return of 13%. (See Chevron Hedge Fund Trading Activity on TipRanks)

Broadcom

Semiconductor company Broadcom (AVGO) managed to beat the Street’s fiscal third-quarter estimates. However, investors seemed unsatisfied as the quarterly outlook was in line with the analysts’ expectations, unlike that of chip giant Nvidia (NVDA), which crushed estimates on artificial intelligence tailwinds.

Broadcom generated $4.6 billion in free cash flow in the fiscal third quarter of 2023. It paid a cash dividend worth $1.9 billion in the quarter and repurchased 2.4 million shares.

Earlier, AVGO increased its quarterly dividend for fiscal 2023 by 12% to $4.60 per share (annualized $18.40). This hike reflected the company’s twelfth consecutive increase in annual dividends since it initiated dividends in fiscal 2011. It offers a dividend yield of 2.2%

Baird analyst Tristan Gerra recently reiterated a buy rating on AVGO stock while boosting the price target to $1,000 from $900 to reflect solid growth opportunities, mainly in the company’s custom application-specific integrated circuit (ASIC) business for AI applications. Gerra also noted that the company’s free cash flow remains strong.

The analyst said that recent channel checks revealed a surge in Broadcom’s custom ASIC business to over 2 million units for next year, which was more than 2.5 times his unit base expectation for 2023. He added that generative AI investments are accounting for nearly all the growth in Broadcom’s semiconductor business, with AI-related revenue now exceeding $1 billion.

Gerra holds the 514th position among more than 8,500 analysts tracked on TipRanks. Moreover, 54% of his ratings have been profitable, with each generating an average return of 8.7%. (See Broadcom’s Financial Statements on TipRanks)

Bristol-Myers Squibb

We end this week’s list with biopharmaceutical company Bristol-Myers Squibb (BMY). The company repurchased 17 million shares for $1.2 billion and made dividend payments of $2.4 billion in the first six months, ended June 30.

The quarterly dividend of $0.57 per share for 2023 indicates a 5.6% year-over-year increase, marking the 14th consecutive year of dividend hikes. BMY’s dividend yield stands at 3.9%.

Following the company’s Research and Development (R&D) Day held in New York on Sept. 14, Goldman Sachs analyst Chris Shibutani reaffirmed a buy rating on BMY stock with a price target of $81.

At the event, management highlighted how new product launches and the acceleration of research and development productivity would drive future revenue growth, addressing concerns about the Inflation Reduction Act and loss of exclusivity of key drugs.

Shibutani noted that management expressed continued confidence in the 2030 new product launch revenue goal of more than $25 billion (non-risk adjusted), based on currently visible late-stage and already commercializing opportunities.

Commenting on BMY’s capital allocation program, Shibutani said that management’s priority remains business development (BD). “Beyond BD, the company remains committed to growing its dividend and will continue to be opportunistic with share buybacks,” the analyst added.

Shibutani holds the 271th position among more than 8,500 analysts tracked on TipRanks. In all, 44% of his ratings have been profitable, with each generating an average return of 20.5%. (See BMY Options Activity on TipRanks)

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September 14, 2023

Jim Cramer’s top 10 things to watch in the stock market Thursday

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My top 10 things to watch Thursday, Sept. 14

1. U.S. equities edge up in premarket trading, with investors largely betting the Federal Reserve won’t raise interest rates further when the central bank convenes next week. The S&P 500 is up 0.33%, while the Nasdaq Composite is 0.24% higher. U.S. government bond yields tick up, with that of the 10-year Treasury hovering just below 4.3%.

2. Oil prices continue to climb higher, with West Texas Intermediate crude, the U.S. oil benchmark, climbing above $90 a barrel for the first time since last November. Club oil holdings Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) are up 1.48% and 0.88%, respectively, in early trading. Here’s the Club’s take on oil’s 10-month highs.

3. U.S. wholesale inflation climbs more than expected in August, according to the Labor Department’s monthly producer price index. At the same time, U.S. retail sales come in higher than predicted for last month, the Commerce Department reports, though the gains are largely driven by higher gasoline prices.

4. The European Central Bank raises interest rates by a quarter percentage point, bringing its deposit rate to a record-high 4%. The increase is the ECB’s 10th-conesecutive rate hike.

5. British chip designer Arm Holdings, owned by SoftBank Group (SFTBF), sets its highly anticipated initial public offering at $51 a share, valuing the company at over $54 billion. At this price, there’s not a lot of room for error. The firm will start trading Thursday on the Nasdaq under the stock symbol ARM.

6. The European Union launches an “anti-subsidy” investigation into China’s electric-vehicle companies, with Beijing calling the move “blatant protectionism.” Will Europe go 27.5% tariffs on Chinese cars? This could be a real issue for China.

7. China’s central bank is cutting the reserve requirement ratio for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points from Sept. 15, in the government’s latest effort to prop up its faltering economy.

8. Jim Farley, the CEO of Club holding Ford Motor (F), rejects allegations by United Auto Workers President Shawn Fain that the automaker is not taking bargaining seriously ahead of a Thursday night strike deadline. Here’s the Club’s take on how a union strike could impact Ford.

9. KeyBank raises its price target on Chip designer Cadence Design Systems (CDNS) to $290 a share, up from $270, while reiterating an overweight rating on the stock. The firm’s call comes after KeyBank analysts met with early users of the company’s new AI-enabled EDA design portfolio. Cadence is a partner of AI chipmaker and Club holding Nvidia (NVDA).

10. Wolfe Research upgrades ecommerce firm Etsy Inc. (ETSY) to outperform, from peer perform, with a $100-per-share price target. The firm cites “many paths” for Etsy shares to outperform over the next 12-18 months.

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September 13, 2023

Oil prices are at 10-month highs. Here’s what Cramer thinks it means for two energy stocks

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An oil pump jack in Great Plains, southeastern Wyoming.

Marli Miller | Universal Images Group | Getty Images

Oil prices are hovering around 10-month highs, as a stout summer rally extends into the fall and delivers additional gains for the Club’s energy stocks, Pioneer Natural Resources (PXD) and Coterra Energy (CTRA). And Jim Cramer believes it’s not too late to buy either of them.

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September 3, 2023

Top Wall Street analysts pick these 5 stocks for compelling returns, including Nvidia

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The logo of Nvidia at its corporate headquarters in Santa Clara, California, May 2022.

Nvidia | via Reuters

The macro backdrop is looking challenging as September begins, but analysts have highlighted several stocks that they feel confident about for the long term.

Here are five attractive stocks, according to Wall Street’s top experts, as rated by TipRanks, a platform that ranks analysts based on their past performance.

Nvidia

Let’s start with shares of chip giant Nvidia (NVDA), which are experiencing a phenomenal rise this year as a frenzy around generative artificial intelligence boosts demand for the company’s graphics processing units or GPUs. The company recently reported its fiscal second-quarter results, which crushed Wall Street’s expectations, as revenue more than doubled compared to the prior-year quarter.

JPMorgan analyst Harlan Sur noted that expectations were high, heading into the fiscal second-quarter print. Still, Nvidia delivered results and guidance that were way above estimates, thanks to the significant demand pull for the company’s data center products.

The analyst expects the company’s earnings power to grow by over 30% annually over the next few years, driven by continued strength in the data center segment, an incremental auto revenue pipeline of nearly $14 billion, and an incremental $1 billion to $2 billion from software, licensing and subscription revenues over the next 3 to 4 years.

Sur raised his price target to $600 from $500 and reaffirmed a buy rating on NVDA stock, saying, “The build out of generative AI and large language/transformer models are continuing to drive expanding demand for NVIDIA’s accelerated compute/networking platforms and software solutions.”

Sur ranks No. 95 among more than 8,500 analysts on TipRanks. His ratings have been successful 65% of the time, with each rating delivering an average return of 19.3%. (See Nvidia Hedge fund Trading Activity on TipRanks).

Marvell Technology

Another semiconductor stock in this week’s list is Marvell Technology (MRVL). The company managed to surpass analysts’ expectations for the fiscal second quarter, even as revenue declined compared to the year-ago period. Management expects sequential revenue growth to accelerate in the fiscal third quarter, fueled by AI and cloud infrastructure.

In reaction to the results, Deutsche Bank analyst Ross Seymore reiterated a buy rating on MRVL stock with a price target of $70. The analyst noted that the company delivered a modest top-line beat and in-line outlook, with solid acceleration in AI-related applications offsetting macro-related weakness.

“Overall, we continue to believe MRVL has a compelling portfolio of infrastructure products that address powerful secular growth trends in AI/Cloud (electo-optics & significant custom compute), 5G and Automotive,” said Seymore.

The analyst thinks that Marvell’s infrastructure products, coupled with an eventual cyclical recovery in the storage, wired and on-premise businesses, would help in significantly accelerating the company’s growth heading into calendar year 2024.

Seymore holds the 9th position among more than 8,500 analysts tracked on TipRanks. His ratings have been profitable 75% of the time, with each rating delivering an average return of 24.2%. (See Marvell Stock Chart on TipRanks)

Palo Alto Networks

Next up is cybersecurity provider Palo Alto Networks (PANW), which reported better-than-anticipated fiscal fourth-quarter earnings. Revenue grew 26% year-over-year to $1.95 billion but slightly lagged estimates.

BMO Capital Markets analyst Keith Bachman, who ranks 584th out of over 8,500 analysts on TipRanks, noted that the company’s fiscal 2024 guidance of 19% to 20% year-over-year billings growth and an 37% to 38% adjusted free cash flow (FCF) margin was better than expectations of mid-teens billings growth and a FCF margin in the mid-30% range.

Bachman thinks that the trend of consolidating solutions with leading security vendors will continue as the threat landscape evolves and as generative AI emphasizes the need for data aggregation. He added that implementing a consolidated portfolio enhances the prospects for real-time threat detection and remediation.

The analyst highlighted that customers are increasingly adopting each of PANW’s three platforms (Strata, Prisma and Cortex), as they look for integrated solutions and unified data models. He increased his price target to $275 from $235 and reiterated a buy rating on Palo Alto.

“We believe that the strength of PANW’s portfolio and the consolidation of spend are key drivers of PANW’s long-term targets and net new NGS ARR [next-generation security annual recurring revenue] growth,” said Bachman.

The analyst has a success rate of 57% and each of his ratings has returned 7%, on average. (See Palo Alto Financial Statements on TipRanks).

Intuit

Financial software company Intuit‘s (INTU) fiscal fourth-quarter results topped analysts’ forecast. That said, the company’s earnings outlook for the first quarter of fiscal 2024 missed expectations while revenue guidance was in line with estimates.

Deutsche Bank analyst Brad Zelnick explained that the company’s strong fiscal fourth-quarter results were driven by the outperformance of its small business unit, supported by solid growth in the QuickBooks Online (QBO) ecosystem.

At the innovation and investor day events scheduled to be held in September, the analyst expects management to reveal more details about Intuit’s AI investments over the past several years and advances in generative AI. He expects the company’s AI initiatives to create value for small business owners, consumers, and taxpayers, driving long-term growth and improved profitability.

Zelnick maintained his buy rating on INTU and increased the price target to $575 from $525, saying, “We see its AI-driven expert platform powering accelerated innovation with leverage, thus enabling sustained mid-teens or better EPS growth.”

Zelnick holds the 50th position among more than 8,500 analysts on TipRanks. His ratings have been profitable 71% of the time, delivering an average return of 15.4%. (See Intuit Insider Trading Activity on TipRanks) 

The Chefs’ Warehouse

We end this week’s list with The Chefs’ Warehouse (CHEF), a distributor of specialty foods, supplies and ingredients for chefs and restaurants.

BTIG analyst Peter Saleh pointed out that CHEF stock is trading at or near trough EV/EBITDA and P/E multiples (excluding Covid-era volatility) despite six guidance upgrades over the past 18 months, record sales, gross profit, operating income and EBITDA.

The analyst expects the company’s sales to grow 28.5% to $3.36 billion in 2023, backed by about an 8% rise in organic sales, with acquisitions contributing the remaining growth. He argued that while his estimate is more than twice the 2019 revenue of $1.59 billion, shares are trading about 25% below pre-pandemic levels. Overall, Saleh believes that CHEF shares are massively undervalued and underappreciated by investors.

Retaining a buy rating with a price target of $48, Saleh said, “Given the growth profile, including double-digit sales and EBITDA growth, we believe CHEF represents a unique opportunity for long-term investors, and we maintain the stock as our small/mid-cap Top Pick.”

Saleh ranks No. 402 out of more than 8,500 analysts tracked on TipRanks. Additionally, 60% of his ratings have been profitable with an average return of 11.1%. (See CHEF’s Technical Analysis on TipRanks)

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August 25, 2023

The Investing Club’s top things to watch in the stock market Friday

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The Club’s top things to watch Friday, August 25

1. Stocks edge up in premarket trading Friday after coming under pressure Thursday. The market is looking to Federal Reserve Chair Jerome Powell’s speech in Jackson Hole, Wyoming, at 10:05 a.m. ET. Investors expect Powell to argue interest rates will need to stay higher for longer in order to stamp out sticky inflation.

2. The Chinese government on Friday moves to ease its mortgage policies in order to boost China’s struggling property market, but it isn’t enough to generate a rally in Asian markets. The Shanghai Composite Index lost 0.6%, while Hong Kong’s Hang Seng Index fell 1.4%.

3. Chipmaker Marvell Technology (MRVL) delivers a quarter and guidance in line with Wall Street’s expectations, as strength in artificial-intelligence applications is offset by continued weakness in some of its legacy businesses like storage. The stock fell more than 3% in premarket trading Friday. The company increases its outlook for AI, with the expectation to exit the year at a $200 million quarterly run rate, or $800 million annualized. That may not be enough upside for today given the tepid reaction to Club name Nvidia‘s (NVDA) huge upside guide Wednesday, but still a good long-term story.

4. Elsewhere in the the world of AI, Baird says next week’s Google Cloud Next conference could show how Club holding Alphabet (GOOGL) is leveraging AI capabilities. Meanwhile, Oppenheimer reiterates its thesis that Club name Microsoft (MSFT) will be the “operating system for AI.”

5. Retailer Nordstrom (JWN) beats on earnings but reiterates a cautious full-year outlook. The company also notes losses from theft are at a historical high. Shares fell over 4% in extended trading Thursday. More broadly, retail earnings this season have showed that American consumers are spending with value top of mind.

6. Loop Capital on Friday upgrades Netflix (NFLX) to buy, from hold, while raising its price target to $500 a share, up from $425. The firm cites improving fundamentals, while noting the shares have corrected 15% from Netflix stock’s recent gains. Upgrading at this juncture is the right way to look at a sell-off in a high-quality company.

7. More ESPN partnerships on the way? Club holding Amazon (AMZN) is reportedly in talks with fellow Club name Walt Disney (DIS) about developing an ESPN streaming service, according to The Information. Disney currently owns 80% of the sports network.

8. Realty Income Corp (O) on Friday announces a $950 million investment in the real-estate assets of The Bellagio Las Vegas, acquiring a 21.9% indirect interest from Blackstone Real Estate Income Trust (BREIT) that values the property at $5.1 billion.

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August 14, 2023

Jim Cramer’s top 10 things to watch in the stock market Monday

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My top 10 things to watch Monday, August 14

1. It’s a big week of retail earnings. Is Target (TGT) undervalued? Is Walmart (WMT) overvalued? Is Club name TJX Companies (TJX) going to start with its usual up two points and then cascade down two? That’s what you need to be ready for. TJX and Target report second-quarter results on Wednesday, while Walmart reports on Thursday.

2. Morgan Stanly on Monday names Club holding Nvidia (NVDA) a top pick, while predicting a beat and raise when the company reports second-quarter results on Aug. 23. But I really want to warn people that I don’t think it’s ready to be bought.

3. Mizuho on Monday raises its price target on Amgen (AMGN), a very low-risk pharmaceuticals company, to $223 a share from $214, while maintaining a neutral rating on the stock. Elsewhere, Jefferies raises its price target on Amgen to $310 a share, up from $275, and reiterates a buy rating.

4. U.S. Steel (X) rejects an unsolicited takeover bid from rival Cleveland-Cliffs (CLF) that would have valued the former at roughly $7 billion. Cliffs is willing to buy anything. But why would the Federal Trade Commission ever allow this? U.S. Steel said Sunday it’s reviewing its strategic options.

5. Citigroup on Monday downgrades Urban Outfitters (URBN) to neutral from buy ahead of the clothing retailer’s second-quarter earnings on Aug. 22, while raising its price target to $40 a share, up from $36. The firm expects URBN to deliver an earnings beat, but thinks market expectations are too high going into the print. I like this company and find this downgrade disturbing.

6. Following a red-hot initial public offering last month, Morgan Stanley on Monday initiates coverage on beauty-and-wellness company Oddity Tech (ODD) with the equivalent of a hold rating and $57-a-share price target. The bank cites “strong long-term revenue growth prospects” for Oddity, but thinks the positives are already priced into the stock’s valuation.

7. Bernstein on Monday downgrades hotel chain Marriott International (MAR) to market perform, or neutral, from outperform, arguing the stock’s short-term upside is limited by its increased valuation this year and a slowdown in the U.S. luxury space. But the firm increases its price target on Marriott to $218 a share, up from $204.

8. Mizuho on Monday raises its price target on restaurant-management-software firm Toast (TOST) to $30 a share, up from $27, while maintaining a buy rating on the stock, following its “very strong” second-quarter results. Baird, conversely, designated Toast a “bearish fresh pick” following its big run of late. The firm has a neutral rating on the stock, with a price target of $25 a share.

9. China’s Country Garden, the country’s largest private real-estate developer, suspends trading of its onshore bonds on Monday, in a sign it could soon move to restructure its debt. Shares are down roughly 17%, weighing heavily on Hong Kong’s Hang Seng Index. The news is the latest sign Beijing will likely need to step in to shore up China’s beleaguered real-estate sector.

10. Piper Sandler on Monday raises its price target on Club name Coterra Energy (CTRA) to overweight, or buy, from neutral, on expectations for “strong execution across the portfolio.” The bank increases its price target on the oil-and-gas firm to $35 a share, up from $30.

And remember to tune into the Club’s Monthly Meeting on Thursday at 12:00 p.m. ET.

(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.

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July 24, 2023

Jim Cramer’s top 10 things to watch in the stock market Monday

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My top 10 things to watch Monday, July 24

1. Chevron (CVX) on Sunday announced excellent preliminary second-quarter results, while extending the contract of CEO Mike Wirth. The United States’ second-largest oil firm in May announced an agreement to expand its shale operations by acquiring PDC Energy (PDCE) in a deal valued at $7.6 billion, including debt. Chevron is set to release its full second-quarter report on Friday.

2. Truist on Monday lowered its price target on Club oil name Pioneer Natural Resources (PXD) to $196 a share, from $220, while maintaining a hold rating on the stock. The firm said it expects free cash flow for most exploration-and-production firms like Pioneer to be down over 50% given lower commodity prices.

3. Piper Sandler on Monday downgraded Club name Estee Lauder (EL) to neutral, from a buy-equivalent rating. The firm also lowered its price target on the cosmetics firm to $195 a share, down from $265. This is the result of of the downfall of the Chinese consumer, which seems endless.

4. Deutsche Bank on Monday raised its price target on Club holding Apple (AAPL) to $210 a share, up from $180, citing upside to the tech giant’s iPhone, Mac and services revenues. Apple is set to report fiscal third-quarter results on Aug. 3.

5. UBS on Monday downgraded electric-vehicle maker Tesla (TSLA) to hold, from buy, noting “very limited” upside to the company’s share price going forward. Still, the firm raised its price target on Tesla to $270 a share, up from $220.

6. Mizuho on Monday raised its price target on Club holding Nvidia (NVDA) to $530 a share, up from $400, while maintaining a buy rating on the stock. The analysts cited accelerating demand for generative artificial intelligence.

7. KeyBanc on Monday, in a call I love, raised its price target on Airbnb (ABNB) to $160 a share, from $135, on the back of reaccelerating travel spending. The firm reiterated an overweight, or buy, rating on Airbnb stock.

8. Mizuho on Monday raised its price target on Intel (INTC) to $33 a share, from $30, arguing semiconductor group multiples have improved. The firm maintained a neutral rating on the stock.

9. Raymond James on Monday upgraded home-construction company DR Horton (DHI) to outperform, or buy, from market perform on the back its “outstanding” fiscal third-quarter results. The firm, which has a price target of $160 on DHI shares, noted an “impressive rebound” in homebuilding margins.

10. Wells Fargo on Monday downgraded its rating on Interpublic Group (IPG) to equal weight, or neutral, from overweight, ahead of a late-cycle downturn. The firm lowered its price target on IPG to $33 a share, from $43.

(See here for a full list of the stocks in 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.

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July 20, 2023

These non-tech stocks are ‘back from the dead.’ Here’s where we stand

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Workers walk towards Halliburton Co. “sand castles” at an Anadarko Petroleum Corp. hydraulic fracturing (fracking) site north of Dacono, Colorado, U.S., on Tuesday, Aug. 12, 2014.

Jamie Schwaberow | Bloomberg | Getty Images

A number of Club stocks that were unloved on Wall Street earlier in the year have seen their fortunes rebound in recent months, including oilfield-services firm Halliburton (HAL) and industrial Caterpillar (CAT) — creating potential opportunities to lock in gains.  

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July 16, 2023

Top Wall Street analysts are bullish on these five stocks

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A logo of Meta Platforms Inc. is seen at its booth, at the Viva Technology conference dedicated to innovation and startups, at Porte de Versailles exhibition center in Paris, France June 17, 2022.

Benoit Tessier | Reuters

The second half has kicked off in earnest, and earnings are revving up.

Investors tracking the action may garner useful insights from Wall Street experts’ top stock picks, and this can help them make informed decisions as they seek solid returns over the long term.

Here are five stocks for investors to consider, according to Wall Street’s top professionals on TipRanks, a platform that ranks analysts based on their past performance. 

Cava Group 

First on this week’s list is the Mediterranean restaurant chain Cava (CAVA), which made a blockbuster public debut last month. The rally in CAVA shares since its initial public offering reflects investors’ optimism about the fast-casual restaurant chain’s growth prospects. Cava has expanded to 263 locations since it opened its first restaurant in 2011.  

Stifel analyst Chris O’Cull initiated a buy rating on Cava with a price target of $48. The analyst sees robust growth potential, given the company’s plan to expand to at least 1,000 restaurant locations in the U.S. by 2032. Cava’s expansion plans include a foray into new markets in the Midwest region next year.  

O’Cull expects the company’s growth plans to be backed by a healthy balance sheet. He noted that following the IPO, Cava had about $340 million in cash on hand and no funded debt. The analyst estimates annual revenue growth of 20% during the next four years, driven by at least 15% growth in Cava’s footprint. He projects adjusted earnings before interest, taxes, depreciation and amortization to almost double to $112 million in 2026 from $58 million this year and the company to generate positive free cash flow starting in 2026.  

“In our view, the stock’s premium valuation can be justified by its AUV [average unit volume] and unit count growth opportunity and the potential for solid operating momentum to cause upward revisions to near-term estimates and long-term earnings potential,” said O’Cull.  

O’Cull is ranked 349th among more than 8,400 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, with each rating delivering an average return of 12.3%. (See CAVA Technical Analysis on TipRanks)        

Apple  

Tech behemoth Apple (AAPL) is known for its innovative products, including the iPhone and iPad. That said, the company’s higher-margin Services segment has rapidly grown over recent years and has enhanced the firm’s revenue and profitability.  

Evercore ISI analyst Amit Daryanani, who ranks 258th out of more than 8,400 analysts tracked on TipRanks, recently revealed the results of the annual Apple Services survey conducted by his firm. The survey indicated that Apple Services continues to experience increased adoption across the board. In particular, Apple Pay, Music and TV+ saw the most notable rises in adoption compared to last year’s survey. 

The survey revealed that Services’ average revenue per user (ARPU) in the U.S. is $110, which is much higher than Daryanani’s global estimate of $81. The analyst contends that ARPU growth is the major catalyst for the Services business, given that smartphone penetration has likely reached peak levels.  

“We continue to see Apple Services as well positioned to maintain double digit growth through FY27 and beyond driven by increasing ARPU coupled with new product launches,” said Daryanani.  

Daryanani reiterated a buy rating on AAPL with a price target of $210. He has a success rate of 60%, and each of his ratings have returned 11.5%, on average. (See AAPL Insider Trading Activity on TipRanks)  

Meta Platforms 

Next on our list is social media giant Meta (META), which recently launched Threads, a social media app challenging Twitter.

Tigress Financial Partners analyst Ivan Feinseth thinks that the Thread launch was well-timed to take advantage of Twitter’s sliding popularity. He said that the introduction of Threads has created an additional growth catalyst that could further drive Instagram’s engagement.  

Feinseth also expects Meta’s ongoing artificial intelligence investments and integration to continue to enhance engagement and advertising revenue across all its apps. The analyst highlighted that Meta’s solid balance sheet and cash flows help support its growth initiatives, including investing in the Metaverse, strategic acquisitions, and share repurchases.  

Feinseth reiterated a buy rating on Meta and raised the price target to $380 from $285. The analyst said, “Increasing AI integration, better cost management, and increased operating efficiency will drive a reacceleration in Business Performance trends.” 

Feinseth holds the 205th position among more than 8,400 analysts on TipRanks. Sixty percent of his ratings have been profitable, with an average return of 12.8%. (See Meta Blogger Opinions & Sentiment on TipRanks) 

Nvidia  

Semiconductor giant Nvidia (NVDA) is seen as one of the major beneficiaries of the growing interest in generative AI, which is fueling tremendous demand for its GPU chips.  

Goldman Sachs analyst Toshiya Hari noted that Nvidia has already gained from the traditional AI boom for a decade, as reflected in the spike in its Data Center segment revenue from $129 million in fiscal 2013 to $15 billion in fiscal 2023. The analyst increased his revenue and earnings estimates for Nvidia, as he thinks that the company has entered a new phase of generative AI-driven growth. 

Hari projects demand for Nvidia’s products in training generative AI models to represent a cumulative revenue opportunity of about $85 billion (base-case scenario) in calendar years 2023 to 2025. (See Nvidia Financial Statements on TipRanks)     

Meanwhile, he estimated inferencing (comprises key applications that could leverage generative AI like search, productivity tools in enterprise, ecommerce, email, and social media) could be a nearly $7.7 billion revenue opportunity from 2023 to 2025, including $4.5 billion in 2025.     

Hari increased his price target for Nvidia stock to $495 from $440 and reiterated a buy rating. He continues to see “significant runway ahead for the company based on its robust competitive position in what is a rapidly growing (yet nascent) AI semiconductor market.” 

Hari holds the 171st position among more than 8,400 analysts on TipRanks. Additionally, 63% of his ratings have been profitable, with an average return of 19.1%. 

US Foods

US Foods (USFD) distributes fresh, frozen and dry food, as well as non-food products, to food service customers.  

Recently, BTIG analyst Peter Saleh reiterated a buy rating on USFD with a price target of $48, saying, “US Foods is one of the best self-help stories in our coverage, with the majority of the EBITDA growth contingent on operational improvements management has been diligently implementing for the past year.” 

Following a stellar gross profit margin in the first quarter, Saleh raised his second-quarter gross margin estimate by 20 basis points to reflect increased penetration of private brands, stock-keeping unit (SKU) rationalization, reduced waste and improved labor retention. 

The analyst also raised his Q2 EBITDA estimate and expressed confidence in US Foods’ ability to beat expectations, citing the company’s strategic initiatives, stable industry sales and its track record of handily surpassing Wall Street’s EBITDA projections in recent quarters.   

Saleh is ranked 325th among more than 8,400 analysts tracked on TipRanks. His ratings have been profitable 64% of the time, with each one delivering an average return of 12.7%. (See US Foods Stock Chart on TipRanks) 

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