The Club’s 10 things to watch Friday, August 18
1. Stocks are poised to open lower Friday, putting the S&P 500 on track for its third-straight week of losses. This is certainly a moment for investors to exercise patience, as we noted during the Investing Club’s Monthly Meeting on Thursday. Meanwhile, the market is finally in oversold territory, per the S&P 500 Short Range Oscillator.
2. Club name Estee Lauder (EL) on Friday posts a small quarterly profit, compared with market expectations of a loss. But the prestige beauty firm’s guidance for adjusted earnings-per-share (EPS) for its fiscal year 2024 was in a range of $3.50 to $3.75, well below analysts’ forecasts for $4.88 a share, as travel retail in Asia remains challenged. Still, Estee Lauder expects to return to organic sales growth in fiscal 2024 and deliver sequentially improving margins throughout the year. Shares plummeted nearly 6% in premarket trading, to around $152 apiece.
3. Shares of Applied Materials (AMAT) are rising in premarket trading after the semiconductor-equipment maker topped expectations in its third quarter and provided an upbeat view of the fourth quarter. JPMorgan on Friday raises its price target on the stock to $165 a share, from $145, while maintaining a a buy-equivalent rating.
4. Strong earnings from off-price retailers continues, with Ross Stores (ROST) posting second-quarter EPS of $1.32, ahead of market estimates of $1.16 a share. Even so, the best operator in the space remains Club name TJX Companies (TJX), which delivered a strong quarterly beat and raise on Wednesday.
5. Oppenheimer lowers its price targets on a slate of big banks, including Goldman Sachs (to $461 a share, from $483), Citigroup (to $85 from $88) and Bank of America (to $49 from $52), but maintains a buy-equivalent rating on all three. Oppenheimer notes that the KBW Bank Index (KBX) fell about 30 percentage points relative to the market in the weeks after the collapse of Silicon Valley Bank in March, and the group has yet to recover this underperformance despite stable fundamentals.
6. Will there be fireworks tonight after the closing bell when Club name Palo Alto Networks (PANW) reports its earnings and provides an update on its medium-term targets? There’s universal caution here, even with the stock down more than 18% this month, but the market will have a full weekend to digest whatever the cybersecurity leader has to say.
7. Deere & Co. (DE) posts a big EPS beat of $10.20, compared with analysts’ forecasts for $8.19 a share, while raising its full-year outlook.
8. Club name Amazon (AMZN) is reportedly adding a new 2% fee on third-party sellers who use the ecommerce giant’s Seller Fulfilled Prime program, according to Bloomberg. That’s another step that would incrementally help its retail margins.
9. B. Riley on Friday upgrades Marvell Technology (MRVL) to a buy rating, from neutral, thanks to an “expected wave of AI-led growth.” The firm also raised its price target on Marvell to $75 a share, from $60. The chipmaker is scheduled to report quarterly results on Thursday.
10. Evercore ISI previews Club holding Apple‘s (AAPL) upcoming iPhone 15 launch, set for September. The firm expects the new iPhone will be more evolutionary than revolutionary, but should still drive a so-called device refresh and higher average-selling prices. Historically, Apple tends to outperform the market into its launch events, but that hasn’t been the case so far this year.
Sign up for Jim Cramer’s 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.
