Top 10 things to watch Wednesday, Sept. 25
— Today’s newsletter was written by the Investing Club’s director of portfolio analysis, Jeff Marks.
1. The S&P 500 is on track for a muted open Wednesday following another record close Tuesday. Club holding Nvidia helped lift the market Tuesday but earnings loom from fellow chipmaker Micron. Our trusted momentum indicator, the S&P Short Range Oscillator, remains very overbought.
2. Morgan Stanley’s well-known auto analyst Adam Jonas downgraded his view on the U.S. auto industry to “in line” from attractive while also lowering his ratings on Ford, General Motors and Rivian. Jonas cited a range of factors for his sector downgrade, including Chinese competitors and vehicle affordability in the U.S. We sold out of Ford earlier this year.
3. Tyson Food was downgraded to a sell-equivalent underweight at Piper Sander on worsening beef margins and rising chicken supply. Shares, down more than 4% over the past month, were lower Wednesday.
4. KeyBanc upgraded DoorDash to an overweight buy and lifted its price target on the food delivery platform to $177 a share. Analysts said they’ve become more confident in DoorDash’s ability to sustain gross order volume growth and demonstrate operating leverage. The firm also raised its price target on Uber to $90 on a belief that cost discipline can further boost earnings.
5. Wells Fargo upgraded oilfield services provider Baker Hughes to overweight from a hold-equivalent, citing its diversified business model. It lowered its price targets on peers Halliburton and SLB to reflect a more muted macro outlook. Despite a lift Tuesday on China stimulus news, oil prices have been trending lower since the spring.
6. Baird analysts added Foot Locker to their “Bearish Fresh Pick Trading Call” list through November, which means they are negative on the stock over that stretch. They cited what they see as signs of softer spending trends and lower near-term sales visibility. CNBC’s Gabrielle Fonrouge had a nice look at Foot Locker’s turnaround efforts earlier this week.
7. Hewlett Packard Enterprise was upgraded to a buy-equivalent overweight at Barclays on growing AI server revenues, improvement in storage, and accretion from the Juniper Networks deal. The server makers like HPE, Super Micro Computer and Dell Technologies have been a closely followed group this year.
8. Evercore ISI downgraded Union Pacific to a hold-equivalent in line rating from outperform. Analysts think the railroad stock looks fully valued at around $249 a share based on its medium-term earnings outlook.
9. Expedia was downgraded to hold at Cowen on a slower turnaround in its business-to-consumer operations, which include vacation rental platform Vrbo and Hotels.com. Those brands have been losing share, according to analysts.
10. Oppenheimer cut its price target on Club holding Alphabet to $185 a share due to uncertainty on the Department of Justice’s antitrust pursuits. The company lost a case last month over its Google Search business and is in currently in court to defend its advertising business against monopoly allegations.
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