2023 Oct 27, US Market
Truist upgraded Roblox (RBLX) to Buy from Hold with a price target of $37, up from $35. The analyst sees a path to 20% upside to consensus 2025 adjusted EBITDA estimates, driven by the core business plus immersive advertising, new platforms and the company's transition away from engagement-based developer subsidies. The firm believes Roblox's upcoming investor day is an opportunity to "shine a light on some of these and their financial ramifications."
Cantor Fitzgerald upgraded Rivian Automotive (RIVN) to Overweight from Neutral with an unchanged $29 price target. The company's Q3 production and deliveries were above expectations, and Rivian looks well-positioned to achieve and exceed its annual guidance, though the stock has underperformed by 27% in the past month and is down about 12% year-to-date, the analyst tells investors in a research note.
BMO Capital upgraded Merck (MRK) to Outperform from Market Perform with a $132 price target. The analyst cites another strong quarter and a strengthening narrative around growth with recent business development and pipeline success for the upgrade. While the 2029 Keytruda loss of exclusivity is well known, the firm is "highly encouraged" with Merck's recent steps to address the eventual revenue loss, the analyst tells investors.
HSBC upgraded Intel (INTC) to Hold from Reduce with a price target of $33, up from $27. The company's Q3 results and Q4 guidance beat from better PCs and operating leverage, the analyst tells investors in a research note. The firm says that while the data center demand overhang remains, improving PC demand and overall execution are "incremental tailwinds" for Intel.
Oppenheimer upgraded Blueprint Medicines (BPMC) to Outperform from Perform with an $85 price target. The company's Q3 earnings included an "impressive beat" on Ayvakit sales due to a substantial increase in new patients on drug, the analyst tells investors.
William Blair downgraded Bristol Myers (BMY) to Market Perform from Outperform without a price target. The slow uptake of several new product launches, which caused a downward revision in this year's guidance and pushed out the time for the new product portfolio to reach $10B in sales by a year, meaningfully reduces confidence in the ability of the new product portfolio to offset losses of exclusivity, particularly as additional products beyond Revlimid and Abraxane begin to see greater impact in 2026, the analyst tells investors. In addition, BMO Capital downgraded Bristol Myers to Market Perform from Outperform with a $60 price target. The firm says the multiple expansion story it has been telling is unlikely to materialize soon given that two quarters of misses and guidance resets make "Bristol difficult to own relative to peers."
Piper Sandler downgraded Enphase Energy (ENPH) to Neutral from Overweight with a price target of $75, down from $150. The company's revenue guidance further declined in Q4 due to destocking headwinds and weaker demand, the analyst tells investors. The firm says that while 2025 may represent a return to annual growth, its confidence in Enphase's velocity of the recovery is low. Given limited visibility and a full valuation given no near-term growth, Piper is "throwing in the towel." Enphase was also downgraded to Perform from Outperform at Oppenheimer
Deutsche Bank downgraded Frontier Group (ULCC) to Hold from Buy with a price target of $5, down from $7.50. While it appears the demand backdrop for Frontier has stabilized, :one can't ignore the fact the company is on track to report another annual earnings loss, its third in three years as a publicly traded company," the analyst tells investors in a research note. The firm says it is not clear when Frontier will return to profitability.
BofA downgraded Hasbro (HAS) to Neutral from Buy with a price target of $53, down from $90, following the company's Q3 report. While noting that Hasbro reported "very strong" Wizards of the Coast revenue, "unfortunately" its consumer products sales declined 19% year-over-year, which was "well below" the firm's estimate for a 13% decline and the consensus call for a 5% drop. The toy business turnaround "needed more than we thought," the analyst tells investors in a post-earnings note.
Citi downgraded PTC Therapeutics (PTCT) to Sell from Neutral with a price target of $17, down from $29, following the company's Q3 earnings and pipeline update. Although the new royalty agreement with Royalty Pharma improves PTC's near-term financial position, the upfront cash comes at the expense of future Evrysdi royalties, which Citi previously viewed as one of the company's key growth drivers, the analyst tells investors.
JPMorgan initiated coverage of TKO Group (TKO) with an Overweight rating and $100 price target. TKO offers investors ownership of UFC and WWE, the leading mixed martial arts and professional wrestling promotions, the analyst tells investors. The firm says the company, with support from its parent Endeavor, is well positioned to grow the assets and improve monetization of media, sponsorship, and licensing.
JPMorgan also reinstated coverage of Endeavor Group (EDR) with an Overweight rating and unchanged price target of $31. Endeavor's 51% of ownership of TKO Group brings the company greater scale and reduced leverage, and a publicly traded position that further highlights a discounted valuation for other segments, the analyst tells investors in a research note. The firm believes Endeavor's decision to formally evaluate strategic options along with Silver Lake's announcement that it is working on a take-private proposal "provide a catalyst for shares to move even closer to underlying asset value."
Canaccord initiated coverage of Inventiva (IVA) with a Buy rating and $12 price target. Inventiva's lanifibranor is in Phase 3 study for nonalcoholic steatohepatitis, or NASH, and the pivotal trial, NATiV3, is expected to achieve the last patient with first dose in Q4. Assuming Madrigal Pharmaceuticals' (MDGL) resmetirom receives FDA approval in March 2024, the firm believes lanifibranor has the potential to be the second FDA approved therapeutic for NASH, the analyst tells investors.
Craig-Hallum initiated coverage of MiMedx (MDXG) with a Buy rating and $12 price target in a note to investors partially titled "MiMedx Is A Wound Care Company That We Think Can Become THE Wound Care Company." Recent management changes and a strategic shift away from OA and back toward the core wound care business positions the business to create substantial value for shareholders, says the firm.
Guggenheim initiated coverage of Idacorp (IDA) with a Buy rating and $104 price target. The firm, which calls Idacorp "a top tier utility deserving of a best-in-class multiple," argues that key drivers and catalysts are not already reflected in the shares despite current valuation levels.
Amazon (AMZN) reported upbeat Q3 results and continued stabilization of Web Services revenue growth
Ford (F) reported downbeat Q3 earnings and withdrew FY23 guidance
Intel (INTC) reported better-than-expected Q3 results and upbeat Q4 earnings and revenue guidance
Exxon Mobil (XOM) reported upbeat Q3 earnings and revenue and raised its quarterly dividend
Chevron (CVX) reported mixed Q3 results, with CEO Mike Wirth saying the company delivered "solid" financial results
Tesla (TSLA) mechanics in Sweden walked off the job on Friday in protest of the company's refusal to sign a collective wage pact, AFP reports
Google (GOOGL) CEO will testify over encouraging staff to keep its chats private, NY Post reports
The UAW is close to a tentative agreement on a new contract with GM (GM), WSJ reports
BuzzFeed (BZFD) is close to selling Complex Networks for under $140M, NY Times reports
Disney (DIS) delayed the release of "Snow White" and "Elio" by a year, The Hollywood Reporter says
NerdWallet (NRDS) and Eldorado Gold (EGO) higher in New York after reporting quarterly results
DexCom (DXCM) gains after reporting quarterly results and raising its FY23 guidance
Juniper Networks (JNPR) increases after reporting preliminary Q3 results
PTC Therapeutics (PTCT) falls after reporting quarterly results and providing its FY23 guidance
Chart Industries (GTLS) declines after reporting Q3 results and divesting its American Fan business
Stanley Black & Decker (SWK) reported Q3 results and raised its FY23 guidance
Enphase Energy (ENPH) reported Q3 results, with Piper Sandler downgrading the stock and commenting its confidence in the company's "velocity of recovery is low"
Chipotle (CMG) announced Q3 results and provided guidance for both Q4 and FY23
Capital One (COF) reported Q3 EPS and revenue higher than consensus
AbbVie (ABBV) reported Q3 results, with CEO Richard Gonzalez commenting, "We delivered another quarter of outstanding results"
The autumn pullback in the stock market worsened Friday, pushing the S&P 500 into a correction and to its worst two-week decline of the year.
The broad stock-market gauge wavered for much of the day before turning lower and losing 0.5% for the session, bringing it down more than 10% from its recent high. A drop in shares of Chevron and JPMorgan Chase helped send the Dow Jones Industrial Average down 367 points, or 1.1%, to its lowest closing level since March.
The Nasdaq Composite eked out a 0.4% gain, though the tech-heavy index finished well off its session highs. The index entered a correction earlier in the week and has fallen for three consecutive weeks.
The mood in the market has darkened in October as investors have parsed a wave of earnings results from some of the biggest companies in America while navigating a punishing bond rout.
The yield on the 10-year Treasury note breached 5% for the first time in 16 years in early trading Monday, keeping many investors glued to the bond market throughout the week. It settled at 4.846% on Friday. The sharp ascent in bond yields has triggered volatility across markets. The S&P 500 and Dow Jones Industrial Average are on track to finish October with three consecutive months of losses, the worst such stretch since the three months ending March 2020.
The week was marked with even bigger swings under the surface for everything from technology heavyweights to oil giants. Shares of companies that investors cheered for much of the year—and that had sent major indexes soaring—were particularly hard-hit.
Alphabet’s earnings disappointed investors, sending the stock down almost 10% for the week, the worst showing since November. Shares of Meta Platforms lost around 3.9% for the week. Chevron shares lost 13%, the worst weekly decline in more than a year, after the company reported quarterly earnings that were sharply lower than a year earlier.
Analysts expect S&P 500 earnings to grow 2.7% for the quarter, the first period of growth since the third quarter of 2022, according to FactSet. Still, that isn’t doing much to buoy the stock market.
Several investors said their focus remained on the bond market after Treasury prices plunged at an unusually fast pace in recent weeks. Now, many are bracing for more volatility ahead of a packed week for economic data and the Federal Reserve’s next meeting.
Rising bond yields have been particularly painful for some of the smallest stocks in the market. The Russell 2000 index of small companies slumped 2.6% for the week and closed at its lowest level since at least November 2020.
In addition to earnings, investors have been sifting through a barrage of economic data, much of which has highlighted the strength of the U.S. economy. Gross domestic product expanded at a 4.9% seasonally—and inflation-adjusted annual rate in the third quarter—more than double the second quarter pace. The personal-consumption expenditures price index, the Fed’s preferred inflation gauge, rose 0.4% in September from the prior month, the same pace as in August.
Next week, investors will be closely parsing the latest jobs report. Some investors said that more positive news on the economy might be bad news for investors concerned about interest rates, and how long they will stay elevated. Many investors expect the Fed to hold rates steady at its meeting next week, though the central bank’s path beyond that remains murky.
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