Top 10 things the Club is watching Thursday, Feb. 16 1. The Dow Jones Industrial Average , the S & P 500 and the Nasdaq are expected to open lower Thursday following a hot, hot, hot reading on January’s producer price index. Headline wholesale inflation up 0.7% month over month versus 0.4% expected. Ex-food and energy up 0.5% month over month versus 0.3% expected. The PPI data comes two days after a slightly hotter-than-expected consumer price index for last month. 2. Club holding Cisco Systems (CSCO): Solid earnings beat with a monster guidance raise, out after the closing bell Wednesday as supply chain normalization has finally allowed the company to make good on its record backlog. But everyone is focused on orders so it’s still highly debated. The Dow stock up 3% early Thursday. Price target increases on Wall Street: Jefferies to $56 per share from $54; JPMorgan to $55 from $54; Evercore to $60 from $58; and Credit Suisse to $69 from $67. 3. Cloud communications platform Twilio (TWLO) finally makes the pivot to emphasize profitability and the stock gets rewarded … up 9% early Thursday. Announces $1 billion share repurchase program. RBC Capital raises PT to $75 from $55; Cowen to $75 from $65; Bernstein $77 to $58. On Monday, Twilio announced plans to cut about 1,500 employees , or around 17% of its workforce. 4 . Shopify (SHOP) reports late Wednesday a strong fourth quarter with revenues, gross merchandise volume (GMV), and adjusted operating income all above consensus. But a softer view of the first quarter is giving some pause … shares down nearly 13% early Thursday. Shopify expects revenues to increase year over year by a high teens percentage versus consensus of around 21%. Price targets all over the place: RBC to $65 from $55; Credit Suisse to $40 from $34; Piper to $45; and MoffettNathanson to $32. 5. Paramount Global (PARA) misses on revenues, adjusted earnings per share (EPS) down 69% year over year and management doesn’t expect to return to earnings growth until 2024. Record quarterly increase of Paramount+ subscribers … 9.9 million added to nearly 56 million. PARA down 5.5%. Berkshire Hathaway (BRK.a), in latest filings, adds to Paramount Global, formerly ViacomCBS. 6. Club holding Humana (HUM) increases dividend by 12.4%. The managed care stocks have been generally out of favor in 2023 after outperforming last year, but Humana’s fundamentals remain strong as it gains market share in Medicare Advantage. 7. Deutsche Bank shakes up its video game ratings: upgrades Activision Blizzard (ATVI) to buy and downgrades Electronic Arts (EA) to hold. Analysts there say ATVI has the “must have” content like “Call of Duty,” while EA has less new content coming next year than expected. Club holding Microsoft (MSFT) is trying to buy ATVI. 8. Boston Beer (SAM) falls after weak earnings, downgraded to underperform at Bernstein. The stock falls 12% early Thursday. Analysts say growth at Twisted Tea still can’t offset the declines and uncertainty around hard seltzer Truly, which has been terrible for many quarters. 9. Generac (GNRC) upgraded to buy from hold by Canaccord, which raises price target to $175 per share from $104. 10. DA Davidson downgrades Coinbase (COIN) to neutral. Analysts say risks are building despite the stock’s near double yar to date. (Jim Cramer’s Charitable Trust is long CSCO, HUM, MSFT. See here for a full list of the stocks.) 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 the Club is watching Thursday, Feb. 16
1. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq are expected to open lower Thursday following a hot, hot, hot reading on January’s producer price index. Headline wholesale inflation up 0.7% month over month versus 0.4% expected. Ex-food and energy up 0.5% month over month versus 0.3% expected. The PPI data comes two days after a slightly hotter-than-expected consumer price index for last month.
2. Club holding Cisco Systems (CSCO): Solid earnings beat with a monster guidance raise, out after the closing bell Wednesday as supply chain normalization has finally allowed the company to make good on its record backlog. But everyone is focused on orders so it’s still highly debated. The Dow stock up 3% early Thursday. Price target increases on Wall Street: Jefferies to $56 per share from $54; JPMorgan to $55 from $54; Evercore to $60 from $58; and Credit Suisse to $69 from $67.
3. Cloud communications platform Twilio (TWLO) finally makes the pivot to emphasize profitability and the stock gets rewarded … up 9% early Thursday. Announces $1 billion share repurchase program. RBC Capital raises PT to $75 from $55; Cowen to $75 from $65; Bernstein $77 to $58. On Monday, Twilio announced plans to cut about 1,500 employees, or around 17% of its workforce.
4. Shopify (SHOP) reports late Wednesday a strong fourth quarter with revenues, gross merchandise volume (GMV), and adjusted operating income all above consensus. But a softer view of the first quarter is giving some pause … shares down nearly 13% early Thursday. Shopify expects revenues to increase year over year by a high teens percentage versus consensus of around 21%. Price targets all over the place: RBC to $65 from $55; Credit Suisse to $40 from $34; Piper to $45; and MoffettNathanson to $32.
5.Paramount Global (PARA) misses on revenues, adjusted earnings per share (EPS) down 69% year over year and management doesn’t expect to return to earnings growth until 2024. Record quarterly increase of Paramount+ subscribers … 9.9 million added to nearly 56 million. PARA down 5.5%. Berkshire Hathaway (BRK.a), in latest filings, adds to Paramount Global, formerly ViacomCBS.
6. Club holding Humana (HUM) increases dividend by 12.4%. The managed care stocks have been generally out of favor in 2023 after outperforming last year, but Humana’s fundamentals remain strong as it gains market share in Medicare Advantage.
7. Deutsche Bank shakes up its video game ratings: upgrades Activision Blizzard (ATVI) to buy and downgrades Electronic Arts (EA) to hold. Analysts there say ATVI has the “must have” content like “Call of Duty,” while EA has less new content coming next year than expected. Club holding Microsoft (MSFT) is trying to buy ATVI.
8.Boston Beer (SAM) falls after weak earnings, downgraded to underperform at Bernstein. The stock falls 12% early Thursday. Analysts say growth at Twisted Tea still can’t offset the declines and uncertainty around hard seltzer Truly, which has been terrible for many quarters.
9.Generac (GNRC) upgraded to buy from hold by Canaccord, which raises price target to $175 per share from $104.
10. DA Davidson downgrades Coinbase (COIN) to neutral. Analysts say risks are building despite the stock’s near double yar to date.
(Jim Cramer’s Charitable Trust is long CSCO, HUM, MSFT. See here for a full list of the stocks.)
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.
