Pre-Market:Pre-Market
Pre-Market active stocks
Gainers
- The stock of Coherus Biosciences (NASDAQ:CHRS) increased by more than 20% after the FDA authorized the biotech’s treatment for nasopharyngeal cancer.
- McDonald’s (NYSE:MCD) stock rose 2.6% after the burger giant beat third-quarter profit and sales estimates on Monday, and also increased its quarterly cash dividend by 10%, fueled by new launches as well as steady demand from diners struggling with still-high food prices for its cheaper burgers and fries.
- Southwest Airlines (NYSE:LUV) stock increased 0.8%, rebounding from Friday’s severe losses, despite the carrier indicating that the US Transportation Department may levy a charge in connection with the wide-scale operational problems the airline experienced in December last year.
- Ford (NYSE:F) stock increased 0.7% after the automaker negotiated a tentative labor agreement with the United Auto Workers union that would end long-running strikes at some of the company’s operations.
- Loews (NYSE:L) shares increased 0.3% after the company posted a profit in the third quarter compared to a loss the previous year, boosted by higher investments and the solid performance of its insurance arm CNA Financial.
- HSBC (NYSE:HSBC) ADRs climbed 0.2% as the banking giant announced an additional $3 billion in share buybacks, bringing its total returns to shareholders this year to $7 billion, after reporting a pretax profit of $7.7 billion in the third quarter, up from $4.5 billion in the same time last year.
Losers
- Cisco (NASDAQ:CSCO) stock dipped 0.4% after Raymond James downgraded the tech business to’market perform’ from ‘outperform,’ forecasting a decline in campus sales, which are estimated to account for roughly one-third of the sales decline expected in 2024.
Upgrades
Abbvie promoted at Barclays after Q3 beat
AbbVie (NYSE:ABBV) shares rose premarket Monday after Barclays upgraded it to Overweight from Equalweight and boosted its price objective to $170.00 from $160.00.
Analysis: Friday’s 4.3% selloff after better-than-expected Q3 earnings “looks like an over-reaction to external sector dynamics, against a backdrop of Immunology momentum and commentary de-risking ’24 pricing.”
Shares rose 1% to $140.28 premarket.
East West Bancorp bought more
East West Bancorp (NASDAQ:EWBC) shares rose premarket after UBS upgraded the bank to Buy from Neutral and boosted its price objective to $61.00 from $57.00.
After reviewing the company’s Q3 results earlier this month, UBS analysts noted, “We now have mild upside to our 2024 estimates vs. consensus, and think the shares… are attractive in the current environment.”
Shares rose 1.6% to $52.64 premarket.
JPMorgan makes Eastman Chemical overweight
After a Q3 beat, JPMorgan raised Eastman Chemical (NYSE:EMN) to Overweight from Neutral with a $90.00 price target.
JPMorgan commented, “We think that the beginning of a normalization of returns in Chemical Intermediates, persistently high margins in Fibers, and volume normalization across Eastman’s operations should lead to strong earnings growth in 2024.”
PTC gets an upgrade before Q4 earnings.
NASDAQ:PTC shares increased more than 1% pre-market Monday after Oppenheimer upgraded the software company to Outperform from Perform with a $165.00 price objective.
The business will release Q4/23 earnings on Nov. 1. Street projections are $1.14 EPS and $558.41 million sales.
L3Harris Tech Outperforms
Raymond James upgraded defense tech company L3Harris Technologies (NYSE:LHX) to Outperform from Market Perform with a $210.00 price target, sending shares up more than 1% pre-market.
Downgrades
Raymond James Downgrades Cisco
Raymond James downgraded Cisco Systems (NASDAQ:CSCO) to Market Perform from Outperform, expecting college-campus sales decreases to account for one-third of the 2024 top-line decline.
The analysts also said that Cisco’s $28 billion acquisition of Splunk (NASDAQ:SPLK) complements XDR and feels smart, but it limits its alternatives and lacks uniqueness in the face of rising competition.
Despite these problems, analysts say the share price is attractive, with a forward P/E ratio below the S&P 500 and EV/EBITDA below the five-year median.
Premarket trading saw shares drop to $51.35.
A few downgrades hit Newell Brands.
JPMorgan and Truist downgraded Newell Brands (NASDAQ:NWL)
The consumer-goods company, which owns Rubbermaid, Sharpie, and Graco (NYSE:GGG), cut its full-year sales projection on Friday, forcing JPMorgan to downgrade it to Neutral from Overweight and decrease its price objective to $7.00 from $11.00.
Truist downgraded the stock to Hold from Buy with a $8.00 price target.
The company reported Q3 EPS of $2.32 and revenues of $3B, both above consensus, but shares fell nearly 10% on Friday as investors responded to its restructuring program. For the year, shares are down roughly 50%.
Baird downgraded Datadog (NASDAQ:DDOG) to Neutral from Outperform and lowered its price objective to $84.00 from $100.00 due to 2024 growth concerns.
“Despite several long-term benefits, industry conversations suggest optimization difficulties will remain into next year. We also think 2024 consensus growth forecasts are too high, analysts said.
BofA Securities reduced CubeSmart (NYSE:CUBE) to Neutral from Buy and lowered its price objective to $38.00 from $51.00.
JPMorgan downgraded Olin (NYSE:OLN) from Overweight to Neutral and lowered its price objective to $48.00 from $75.00.
Hedge fund and Insider Trades
Corvex doubles stake in Southwest Gas, seeks possible sale of utility business
Corvex Management LP, a hedge fund, increased its stake in Southwest Gas (NYSE:SWX) to 4,153,717 shares, or 5.8% of the company, at the end of the June quarter.
Corvex wants to discuss ways to optimize the company’s value with the board, particularly its utility franchises and Centuri Group holdings. Corvex supports Southwest’s Centuri separation, but it thinks Southwest Gas is trading below its allowed rate base. If the disparity remains, the implied valuation implies a “deep discount to underlying value, market comps, and recent transactions” and the company may need to rectify it. Corvex said “similar assets trade at a 1.5-2.0x rate base.”
Corvex says Southwest’s $2 billion capital plan “clearly does not make sense if growth capital results in a market valuation less than cost.”
The hedge fund plans to work with Southwest to increase shareholder value by enhancing earned returns on capital, reorganizing, or selling the company.
Ancora supports Forward Air’s Omni Logistics merger termination request.
Forward Air Corporation (NASDAQ:FWRD)’s largest shareholder, Ancora Holdings Group, supported Forward Air’s mid-August announcement that Omni Logistics violated their merger agreement.
“In light of this, we – and presumably a critical mass of our fellow shareholders – fully support leadership’s decision to explore a merger agreement termination,” said Ancora.
After the merger was announced in August, Ancora and other important owners opposed it, and three former Forward Air executives and current shareholders sued to halt it last month. The stock plummeted.
Forward Air claims Omni violated the merger agreement and will not close, even after a judge lifted a restraining order.
Satori’s Dan Niles covers shorts in Tesla and Apple and looks to re-short higher
Tesla and Apple shorts are covered by Satori’s Dan Niles, who hopes to short higher.
Dan Niles of Satori Fund told X (previously Twitter) that he has covered his short positions in Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) but is looking for opportunities to re-sell at higher levels.
Tesla’s stock has fallen after disappointing Q3 deliveries and profits. Tesla shares fell about 20% in October, reaching their lowest level in five months on Thursday.
Apple is also falling, although not as much as Tesla.
Three insider buys
William Rogers (NYSE:ROG), CEO of Truist Financial (NYSE:TFC), bought 10,000 common shares worth $280,000 at $28.048 per.
At $50.42, Nasdaq (NASDAQ:NDAQ) Director Johan Torgeby bought 14,000 common shares valued over $700,000.
At $40.30, Commercial Metals (NYSE:CMC) President and CEO Peter Matt bought 6,200 common shares, valued roughly $250,000.
In Tech
Amazon beats – and warns
Thursday, Amazon (NASDAQ:AMZN) reported Q3 earnings of $0.94 per share, exceeding the $0.58 forecast, on $143.1 billion in revenue vs. $141.53B consensus.
Cloud unit Amazon Web Services sales rose 12% to $23.1B, below projections of $23.2B but indicating stabilization.
Under the average Street projection of $167.2B, the business expects next quarter revenues of $160B to $167B.
“Overall this was a strong print & in-line with our retail margin thesis,” said Piper Sandler, which lowered its price objective by $15 to $170.
Citi raised the price objective by $10 to $177, noting “attractive valuation” and “a structurally more profitable business.”
“We believe AWS is well positioned to deliver accelerating growth as optimization headwinds abate as Amazon gains consumer wallet share given the mix-shift to essentials, while expanding margins,” experts added.
In a call with reporters, the business warned that discretionary spending was weaker, stating they “still see customers remaining cautious about price, trading down where they can and seeking out deals.”
The stock rose 2% to $127.74 this week.
Microsoft comes in strong.
Microsoft (NASDAQ:MSFT) said late Tuesday that fiscal Q1 earnings were $2.99 per share on $56.52B in revenue, exceeding projections of $2.65 and $54.53B.
Microsoft also reported 29% year-over-year Azure cloud sales growth, above Wall Street expectations of 26%. On the results call, CFO Amy Hood indicated Q2 revenue to be $60.9B (up or down $500 million), as expected.
Microsoft’s $10B commitment on OpenAI, which launched ChatGPT, is projected to boost growth: Wedbush believes over half of Microsoft’s installed base “will ultimately use the AI functionality for the enterprise/commercial landscape,” creating “a major monetization opportunity” that is currently happening.
Citi said the research “checked all the boxes” and shows “demand trends are stabilizing (or accelerating) and should offer a positive read on the outlook.”
Goldman Sachs anticipates gross margin leverage to boost earnings growth in fiscal 2025, lifting Microsoft’s price target by $50 to $450.
Shares rose 1% weekly to $329.81.
Alphabet weaker under the hood
Alphabet (NASDAQ:GOOGL) shares fell as the Google parent reported top- and bottom-line beats but cloud revenue rose 22% to $8.4B, missing estimates for $8.6 billion and operating income of $21.34B.
Overall, earnings were $1.55 a share, $0.09 over projections, on 11% higher revenue of $76.7B, beating the $75.9B average.
Management blamed client optimization for poor cloud sales.
Bernstein stated GOOGL’s “cloud taking share offering further AI re-rating” and “visible” margin increase “suddenly… feel very distant.”
They said, “Top-line tracking well, but margin contraction and a soft cloud print weighs heavily on the question ‘why buy Google here?'”
Several Wall Street analysts cut price recommendations on
GOOGL stock in response to the Q3 earnings report.
GOOGL shares fell 10% this week, closing Friday at $122.17.
Meta beats expectations but indicates weak ad demand this quarter.
Meta (NASDAQ:META) posted better-than-expected Q3 results and improved forecast for the current quarter as cost reduction increased margins, but shares fell during the earnings call when management anticipated declining brand advertising demand in Q4.
“While we don’t have material direct revenue exposure to Israel and the Middle East, we have observed softer ad spend in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook,” CFO Susan Li said in the call.
Meta beat the $3.64 average forecast with adjusted EPS of $4.39 and revenue of $34.15B, compared to analysts’ expectations of $33.57B.
Total costs and expenses fell 7% to $20.40 billion, increasing the company’s operating margin to 40% in Q3 from 20%.
The company forecasts third-quarter revenue of $36.5B to $40B, mostly over $38.84B.
Oppenheimer maintained its Meta bullishness on “3Q’s continued revenue outperformance and cost control, despite conservative low end of 4Q guide on Middle East.”
Goldman continues “We like META’s position against multiple long-term secular growth trends and the favorable momentum across key product efforts. Reels, click-to-messaging ads, AI, Advantage+ adoption.”
Shares fell 4% to $296.73 this week.
Intel’s rosy forecast
Despite indicators PC demand has bottomed, Intel (NASDAQ:INTC) reported better-than-expected projections for the current quarter and adjusted Q3 earnings of $0.41, nearly double the $0.22 forecast, on $14.2B in sales.
The business expects Q4 adjusted EPS of $0.44 on revenue of $14.6B to $15.6B, ahead of $0.33 on $14.36B.
On the news, HSBC upgraded the company to Hold from Reduce and set a $33 price target, expecting “significant earnings revisions from better execution and improving PC outlook to lead to a re-rating.”
Bernstein raised the price target to $36 on “quite strong” results, stating, “Overall the company does appear to have turned the corner on the worst of it, and (perhaps) a PC-dominated narrative might be enough to carry it for the moment.”
Weekly gains were roughly 2% at $35.54.
Weekly Earnings Calendar
Monday Oct 30
SoFI, McDonald’s, Western Digital, Pinterest, Transocean (RIG).
Tuesday, OCT 31
Advanced Micro Devices (AMD),Anheuser-Busch (BUD), Amgen (AMGN), Caesars Entertainment (CZR), Caterpillar (CAT), First Solar (FSLR), Pfizer (PFE).
Wednesday, NOV 01
Airbnb (ABNB), BP (BP), CVS Health (CVS), Dupont (DD), Estee Lauder (EL), Humana (HUM), Modelez (MDLZ), Norwegian Cruise (NCLH), Qualcomm (QCOM), Yum Brands (YUM).
Thursday, NOV 02
Apple (AAPL), Booking Holdings (BKNG), Carvana (CVNA), Coinbase (COIN), ConocoPhillips (COP), Duke Energy (DUK), Moderna (MRNA), Molson Coors (TAP) Palantir (PLTR) Starbucks (SBUX).
Friday, NOV 03
Bloomin Brand (BLMN), CBOE (CBOE), ominion (D), Fluor (FLR), Monster Beverage (MNST), Restaurant Brands (QSR).
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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.