Pre-Market:Pre-Market
Pre-Market active stocks
Gainers
- Roivant Sciences (NASDAQ:ROIV) shares rose 5.4% after Roche agreed to pay the drugmaker an initial $7.1 billion in conjunction with Pfizer (NYSE:PFE), which rose 1.1%, for rights to a new inflammatory bowel disease treatment.
- Pinterest (NYSE:PINS) gained 2.4% after Stifel upgraded the image-sharing business to ‘buy’ from ‘hold,’ citing significant growth potential outside of the local market.
- Walgreens (NASDAQ:WBA) stock rose 3.1%: JPMorgan raised Walgreens (NASDAQ:WBA) stock to ‘overweight’ from ‘neutral,’ stating the recent leadership shift, with Tim Wentworth assuming the CEO job, represents the start of a new chapter for the pharmacy chain’s shares.
- Hess (NYSE:HES) climbed 0.8%: while Chevron (NYSE:CVX) sank 2.7% as the oil major announced an all-stock bid to acquire its smaller rival in a $53 billion all-stock deal.
Losers
- Okta (NASDAQ:OKTA) stock slumped 3.8%: on Friday after the cybersecurity business announced a breach in its customer support system that allowed some hackers to read files uploaded by specific consumers.
- Salesforce (NYSE:CRM) shares declined 1.9%; and Unity Software (NYSE:U) sank 3% after Piper Sandler lowered both software companies to ‘neutral’ from ‘overweight,’ while Asana (NYSE:ASAN) fell 4.3% after Piper Sandler downgraded it to ‘underweight’ from ‘neutral’.
- Tesla (NASDAQ:TSLA) stock slumped 1.5%; after the electric vehicle company announced that its capital expenditure for 2023 would exceed the $7 billion to $9 billion target it set earlier this year.
- Apple (NASDAQ:AAPL) stock slumped 1.1%: According to a report in the state-backed Global Times newspaper, Apple (NASDAQ:AAPL) stock slumped 1.1% because Foxconn, a major supplier of Apple’s iPhones, faces a tax probe in China.
weekly Round up for Major tech stocks
Netflix smashes Q3 expectations, raises prices
Netflix (NASDAQ:NFLX) shares catapulted higher on Thursday after it reported far better Q3 earnings than anticipated and a healthy rise in subscribers, while also announcing it will hike prices on its streaming services.
The company’s earnings of $3.73 per share was well above the $3.49 average analyst target, while $8.54 billion in sales was in line, and paid subscribers rose 8.76 million in the third quarter – well above expectations for just over 6M.
The company acknowledged the “challenging” macro environment for the industry in the past six months due to the writers and actors strikes, and said it is “committed to resolving the remaining issues as quickly as possible.”
Netflix said it sees Q4 EPS of $2.15, reversing from the prior year’s loss of $0.47, and anticipates year-over-year revenue growth of around 11% to some $8.69B.
KeyBanc, Morgan Stanley, Truist and DZ Bank all upgraded the stock to buy-equivalent ratings on the news, with KeyBanc citing the company’s ongoing success in paid sharing, its rising operating profit and free cash flow, and its estimate that share buybacks “should support a 25%+ EPS growth profile.”
Morgan Stanley, for its part, said, “We believe Netflix will deliver the objectives it set out a year ago, accelerate revenue growth back to double digits and expand margins. At the same time, some of the froth in the stock and expectations have come out, creating a better entry point.”
And JPMorgan also hailed the company’s paid sharing strategy, as well as a “strong content slate” and Q4’s “favorable seasonality.”
Netflix also said it will immediately raise rates on its basic and premium (non-ad-supported) plans in the US, UK and France. In the US, this will mean a $2 raise to $11.99 per month for basic, and a $3 hike to $22.99 for premium. It is keeping prices steady on ad-supported plans.
Netflix ended the week at $400.96, up 16% for the week and some 36% higher year to date
New US semiconductor export limits to China hurt Nvidia.
Nvidia (NASDAQ:NVDA) shares fell over 10% last week after the US government restricted advanced semiconductor exports to China.
Nvidia noted in a regulatory filing that export constraints could delay product development. The business also warned that these limits could interrupt service for affected clients and delivery to affected regions.
While these problems are not likely to have an immediate financial impact, Nvidia may need to shift some activities from other countries.
In reaction, Citi and Morgan Stanley analysts cut Nvidia price expectations.
Citi analysts maintained their Buy rating but lowered their price target by $55 to $575, stating that they “assume low likelihood of US government granting export licenses,” and that the new limitations “will make it difficult for NVIDIA to sell to China.”
They still like Nvidia stock owing to “secular AI growth which remains in early innings, in our view.”
While maintaining Nvidia’s Overweight rating and “Top Pick in semis” status, Morgan Stanley decreased the price objective by $30 to $600 due to the export limits being “more draconian than our expectations.”
Poor Tesla results, caution
Tesla’s (NASDAQ:TSLA) Q3 missed Wall Street projections due to its recent EV pricing cuts, sending shares down more than 9% Thursday.
Late Wednesday, Tesla posted adjusted EPS of $0.66 on $23.35B in revenue, its largest revenue shortfall in three years. Investing.com analysts predicted $0.73 EPS on $24.32B revenue.
Gross margins excluding credits, keenly examined after price EV reduction, fell to 16.1% from 18.7% in Q2.
Tesla shares reversed Wednesday’s after-hours gains as CEO Elon Musk appeared to waver in his optimism after labeling Tesla “recession-resilient.”
“I’m worried about the high interest rate environment we’re in,” he added on the call. “If interest rates remain high or rise, it makes it harder for people to buy the car.”
Musk also advised Tesla’s Cybertruck owners to “temper expectations”: “It’s a great product, but financially, it will take a year to 18 months before it is a significant positive cashflow contributor.”
Ten Wall Street analysts have lowered their price forecasts on Tesla due to concerns about its near-term prospects and ability to maintain its rapid growth.
Goldman Sachs analysts dropped Tesla’s price objective by $30 to $235, saying the Q3 report “will add to near-to-intermediate term investor concerns.” Citi analysts, who dropped Tesla’s price objective by $16 to $255 and full-year EPS forecast, said Q3 numbers were disappointing.
At $211.99 on Friday, shares were down 16% for the week. Still, the stock is up 96% this year.
New iPhone demand in China is weak.
Bloomberg reports that Apple’s (NASDAQ:AAPL) iPhone 15 sales in China are behind its predecessor.
In the first 17 days after introduction, Counterpoint Research predicts a 4.5% drop in iPhone 15 sales in China compared to the iPhone 14, while Jefferies predicts a double-digit drop.
These reports emphasize Apple’s sales challenges in China, where economic issues and Huawei competition are affecting sales.
Project counterpoint According to Jefferies, Huawei has overtaken Apple as the market leader, which “suggests iPhone would lose to Huawei in 2024,” and might sell 5M to 6M Mate 60 Pro units this year.
Apple shares fell 3.3% weekly to $172.88.
New BofA top pick for ASML amid soft guidance
In addition to reporting that orders had dropped below expectations, ASML (NASDAQ:ASML) gave a conservative view and maintained a robust outlook, which BofA analysts called “the reset” they were seeking for, making ASML a top pick.
The semiconductor-equipment maker warned of flat sales in the coming year as customers conserve cash due to economic uncertainty. Net profit for the three months ended September 30 was 1.9 billion euros, in line with analysts’ expectations, and net bookings were €2.6B ($1 = €0.94) vs. Q3 sales of €6.7B.
Despite a conservative 2024 view, ASML has a €35B order backlog and expects a better 2025 due to its clients’ expansion ambitions in Asia, the US, and Europe.
BofA, optimistic about this “reset,” placed ASML to its Top EU SemiCap companies list: “The stock trades on 18x EV/EBITDA and 22x PER, which we consider highly attractive given the 21% EBITDA CAGR 2022-25E (PEG).
Morgan Stanley said the latest forecast implies ASML is adopting a “more conservative view” on FY24, expecting “revenues similar to FY23 and yet still see this year as pivotal to preparation for “significant” growth in 2025.”
Shares fell 3.5% Wednesday after disappointing guidance. Stock finished Friday at $547.10, down roughly 5% for the week.
Downgrades
Rosenblatt downgraded RingCentral, Inc. (NYSE:RNG) to a Neutral rating (from Buy) and cut their 12-month price target on the stock to $35.00 (from $52.00) following the communications company’s recent shift in leadership.
Analysts at Rosenblatt believe the recent change-up could lead to a resetting of revenue expectations, while a competitive landscape adds further concern.
Earnings Calendar
Monday, Oct 23
Tuesday Oct 24
- Microsoft Corporation (MSFT)
- Alphabet Inc. GOOGL (GOOG)
- Visa Inc. ((V)
- The Coca-Cola Company (KO)
- Danaher Corporation (DHR)
- Texas Instruments Incorporated (TXN)
- Verizon Communications Inc. (VZ)
- General Electric Company (GE)
- Raytheon Technologies Corporation (RTX)
Wednesday Oct 25
- Meta Platforms, Inc. (FB)
- Thermo Fisher Scientific Inc. (TMO)
- T-Mobile US, Inc. (TMUS)
- International Business Machines Corporation (IBM)
- ServiceNow, Inc. (NOW)
- The Boeing Company (BA)
- Automatic Data Processing Inc. (ADP)
- CME Group Inc. (CME)
Thursday Oct 26
- Amazon.com, Inc. (AMZN)
- Mastercard Incorporated (MA)
- Merck & Co., Inc. (MRK)
- Comcast Corporation (CMCSA)
- Intel Corporation (INTC)
- Caterpillar Inc. (CAT)
- United Parcel Service, Inc. (UPS)
- Honeywell International Inc. (HON)
- Bristol-Myers Squibb Company (BMY)
Friday, Oct 27
- Exxon Mobil Corporation (XOM)
- Chevron Corporation (CVX)
- AbbVie Inc. (ABBV)
for Details read
Airbnb suffers as a result of KeyBanc’s downgrade
Airbnb (NASDAQ:ABNB) shares were down nearly 3% in premarket trading Tuesday after KeyBanc downgraded the business from Overweight to Sector Weight.
Following the split, WK Kellogg began at Sell.
Following the conclusion of Kellogg Company’s (NYSE:K) spinoff of its North American cereal division into the WK Kellogg standalone entity, Goldman Sachs commenced coverage on WK Kellogg (NYSE:KLG) with a Sell rating and a price target of $11.00.
WK Kellogg’s stock dropped significantly on the first day after the spinoff, closing more than 9% down on Monday.
Nortfolk Southern and Bread Financial have been downgraded.
Norfolk Southern (NYSE:NSC) shares fell more than 2% on Monday after BofA Securities downgraded the firm to Neutral from Buy and reduced its price objective to $215.00 from $266.00, citing operational difficulties and excessive costs.
Bread Financial (NYSE:BFH) has been downgraded to Sell from Neutral by Goldman Sachs, with a $32 price target. As a result, shares dropped about 2% on Monday.
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ell suffers as a result of a downgrade by Barclays.
Dell Technologies (NYSE:DELL) shares tumbled 3% before the bell on Thursday after Barclays downgraded the firm to Underweight from Equalweight, with a $53.00 price target.
Cloudflare began at Underperform.
Cloudflare (NYSE:NET) has been added to BofA Securities’ coverage with an Underperform rating and a $52.00 price objective.
Crocs (NASDAQ:CROX) shares were down more than 2% in pre-market trading today after B.Riley downgraded the firm to Neutral from Buy and reduced its price objective to $101.00 from $125.00.
Verint Systems (NASDAQ:VRNT) was downgraded from Outperform to Perform by Oppenheimer.
Following the company’s announced Q2 EPS and sales misses, as well as dismal full-year forecasts, shares fell more than 17% pre-market today.