2023 Oct 18 US Market
Jefferies upgraded Elastic (ESTC) to Buy from Hold with a price target of $100, up from $75. The company has posted "two solid quarters of execution" and its revenue is accelerating heading into fiscal 2025, the firm tells investors in a research note.
Mizuho upgraded Hudson Pacific (HPP) to Neutral from Underperform with a price target of $7, down from $10. The firm sees a more balanced risk/reward for Hudson Pacific with several negatives, like tenant move-outs, an uncertain Studio business trajectory and financial covenant concerns balanced by potential improvement in San Francisco fundamentals progress on the actors' strike during the next 3-6 months several actions to shore up the balance sheet.
JPMorgan upgraded Editas Medicine (EDIT) to Neutral from Underweight with an $8 price target. The firm believes Editas' share downside is "relatively protected at this valuation."
Janney Montgomery Scott upgraded FB Financial (FBK) to Buy from Neutral with a fair value estimate of $35.50, up from $34, citing improved profitability, its "demographically appealing Tennessee-based footprint" and what the firm views as "an attractive valuation."
BofA upgraded Dow Inc. (DOW) to Neutral from Underperform with a price target of $59, up from $55. The firm also upgraded Huntsman (HUN) to Buy from Underperform and LyondellBasell (LYB) to Neutral from Underperform.
Scotiabank downgraded Olink (OLK) to Sector Perform from Outperform after Thermo Fisher (TMO) announced a proposal to acquire Olink in an all-cash transaction.
BofA downgraded Sherwin-Williams (SHW) to Underperform from Neutral with a price target of $275, down from $300.
BofA downgraded SQM (SQM) to Underperform from Neutral with a price target of $59, down from $69, as the firm lowered its 2023 and 2024 EBITDA estimates by 17% and 43%, respectively, following 20%-50% cuts in lithium price assumptions made by the BofA commodities team for 2023-2025.
Deutsche Bank downgraded Lithium Americas (LAC) to Hold from Buy with a price target of $7, down from $25. The firm views the shares as "richly valued" following the spinoff.
TD Cowen downgraded Evelo Biosciences (EVLO) to Market Perform from Outperform. The firm is citing the company's announcement that it will explore strategic alternatives and partnering opportunities for EDP1815 and its SINTAX platform following results from the Phase II study of EDP2939 in moderate psoriasis, which missed the PASI-50 primary endpoint.
KeyBanc initiated coverage of Arm (ARM) with an Overweight rating and $65 price target. The firm believes Arm will increasingly benefit from key semiconductor design trends, including rising chip complexity, as evolving compute chip architectures increasingly compensate for scaling challenges as a result of the demise of Moore's Law.
Jefferies initiated coverage of Pinterest (PINS) with a Hold rating and $30 price target. The firm cites the stock's premium valuation for the Hold rating.
TD Cowen initiated coverage of WK Kellogg (KLG) with a Market Perform rating and $11 price target. The spin from Kellanova (K) gives WK Kellogg the opportunity to regain market share in breakfast cereal and rebuild profits, but the firm is concerned that years of underinvestment may have impaired the company's brands and hampered its ability to engineer a turnaround in a U.S. cereal category that is in structural decline.
Redburn Atlantic initiated coverage of Nu Holdings (NU) with a Buy rating and $11 price target. The firm says the company has penetrated only 2% of a $2.7 trillion addressable market in Brazil and is "poised for growth in high-return, low-risk payroll lending over the next three years."
JMP Securities initiated coverage of Vigil Neuroscience (VIGL) with an Outperform rating and $23 price target. The firm says interim results from the VGL101 Phase 2 trial are anticipated in Q4 and represent the key near-term, value-driving milestone.
United Airlines (UAL) reported better-than-expected Q3 results, but gave weaker-than-expected Q4 EPS guidance
Travelers (TRV) reported core Q3 EPS that was impacted by elevated catastrophe losses
Procter & Gamble (PG) reported results that both Deutsche Bank and Morgan Stanley predicted will drive a positive stock reaction
Morgan Stanley reported what chairman and CEO James Gorman described as "solid" Q3 results
Abbott (ABT) reported Q3 sales and earnings that topped expectations, but narrowed its FY23 adjusted EPS view
Amazon (AMZN) plans to launch its online marketplace in South Africa in 2024, Bloomberg reports
NBA's Embiid near deal to represent Skechers' new basketball division, The Athletic says
The Vita Coco Company (COCO) has a "weak," "unethical" supply chain, Ragnarok Research says
Private equity group CVC preparing to launch IPO as early as next week, FT reports
General Motors (GM) plans to delay its Investor Meeting in an effort to focus on reaching a new labor agreement with the UAW, Detroit Free Press reports
Spirit Aerosystems (SPR) higher after its subsidiary entered a Memorandum of Agreement with The Boeing Company (BA)
Ardelyx (ARDX) gains after the FDA approved XPHOZAH in adults with CKD
Nasdaq (NDAQ) increases after reporting quarterly results
Lithium Americas (LAC) falls in New York after Deutsche Bank downgraded the stock to Hold
Viking Therapeutics (VKTX) declines after announcing results from its Phase 1 clinical trial of VK2735
State Street (STT) reported Q3 results, with EPS and revenue missing consensus
Citizens Financial (CFG) reported Q3 underlying EPS, with CEO Bruce Van Saun commenting "We continue to post solid results through a dynamic environment"
Winnebago (WGO) reported Q4 revenue that missed consensus
Ally Financial (ALLY) reported Q3 results and reaffirmed FY23
UniFirst (UNF) reported Q4 results, with CEO Steven Sintros commenting, "I am pleased to report that we closed the year with a fourth quarter that modestly exceeded our expectations in terms of top and bottom-line performance"
Long-term bond yields hit a fresh 16-year high Wednesday, weighing on stocks already pressured by the conflict in Gaza and corporate earnings results.
A swift climb in bond yields has dented enthusiasm for stocks in recent weeks. Investors are also monitoring the intensifying Israel-Hamas war that threatens to disrupt the global energy market. A mixed bag of corporate earnings results further complicates the outlook for stocks.
Some Fed officials have signaled the run-up in long-term yield could substitute for a further central-bank rate increase. Philadelphia Fed President Patrick Harker told The Wall Street Journal he thinks the central bank can likely wait until early next year to see how the economy is responding to a rapid climb in interest rates before lifting rates further.
A deadly explosion at a Gaza hospital escalated fears of wider regional conflict. Arab leaders canceled a summit with President Biden, reducing the likelihood of an imminent diplomatic solution.
Concerns about the Israel-Hamas war potentially expanding in the Middle East pushed oil prices higher. Brent crude rose 1.8% to $91.50 a barrel, the highest level this month.
A slew of quarterly earnings reports reflected challenges in the banking industry. Morgan Stanley’s stock fell 6.8% after the bank posted a drop in quarterly net income, with investment banking and trading still in a slump. Shares of some regional banks, such as U.S. Bancorp, fell after several lenders reported being squeezed by higher interest and other expenses.
Airline stocks pulled back after United Airlines cut its earnings forecast for the end of the year. Shares of United Airlines fell 9.7%% in its worst one-day percentage decline since July 2022. Delta Air Lines and American Airlines also fell.
Semiconductor stocks dropped for a second day after the U.S. said it would significantly constrict exports of artificial-intelligence chips, making it harder for U.S. companies to sell products to the Chinese market. Nvidia lost 4%, Intel shed 1.2% and Advanced Micro Devices dipped 2.8%.
Data from China painted a mixed picture of the second-largest economy in the world. China’s economic growth slowed last quarter, but retail sales in September were stronger-than-expected.
Traders also combed through Fedspeak and the most recent Beige Book for hints on the central bank's next moves. According to the Federal Reserve's survey of regional business contacts, the outlook for the US economy is stable or may show softer expansion.
Fed 's Williams stated that rates will need to remain restrictive "for some time" in order to return inflation to the central bank's target. Meanwhile, Fed's Waller stated that policymakers can wait and collect more data before deciding whether the economy requires additional monetary restraint.
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