My top 10 things to watch on Thursday, August 22nd
1. Wall Street is expected to open slightly higher on Thursday after stocks regained their gains in the previous session. The S&P 500 and Nasdaq Composite have now risen in nine of the last ten trading days. My trusted momentum indicator, the S&P Short Range Oscillator, still says we are in overbought conditions.
2. James Gorman, former Morgan Stanley CEO and now Disney Board member, will take over succession planning for Bob Iger. Iger returned to Disney as CEO in November 2022 to urgently get the ship back on course. Iger’s contract runs until 2026.
3. Citi thinks about club names NVIDIA may reach new highs after the release of earnings next week. Analysts expect the company to reassure investors about Blackwell, its next-generation artificial intelligence chip platform. Nvidia had a rough patch with the overall market earlier this month. But shares have been on the rise in recent weeks.
4. Citi raised its price target on Abbott Laboratories to $127 per share from $119 and called it a favorite for medical devices. We trimmed our position slightly on Tuesday due to concerns about diabetes device makers in response to the club’s name Eli LillyNew study on the obesity drug Zepbound. In addition, there are legal hurdles due to lawsuits over special baby food.
5. TJX Companies responded to the opportunity with a stellar quarter on Wednesday. Barclays and Wells Fargo were pleased with what they saw and maintained their hold ratings on the stock. Citi downgraded the stock to hold, saying the off-price retailer Club was too expensive compared to other stocks in the sector. Analysts questioned TJX’s market cap, which is 60% higher than Target’s.
6. Goal The surprisingly good quarter triggered a series of price target increases on Wall Street, including at Wells Fargo, where the stock rose from $160 to $180. Wells maintained its buy rating on Target.
7. Urban Outfitters shares fell 13% after the specialty retailer missed quarterly sales in all three of its business segments. Anthropologie and Free People are Urban Outfitters’ other business segments.
8. Stifel lowered its price target on Lululemon to $370 per share from $416, but the stock continued to trade as a buy. The re-rating seems overdone due to growth concerns. Citi cut the stock to $270 from $300. Expect a cut in guidance when the company reports its quarterly results next week.
9. Snowflake The quarter wasn’t bad. But the stock fell 10%. Margin decline? Competition from Databricks? Hacker backlog they didn’t cause? Very unpopular company? Long-standing belief that Snowflake is just a data warehouse for “structured” data, while Databricks is an AI-powered warehouse that is far more valuable for structured and unstructured data.
10. Bank of America cut its Dell Technologies Price target raised from $180 to $150 per share. Analysts maintained their buy rating. Ahead of next week’s earnings release, BofA argued that the recent decline was a “particularly attractive opportunity.”
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