My top 10 things to watch Thursday, June 27
- The S&P 500 and Nasdaq Composite enter Thursday riding two-session win streaks. While initial jobless claims were slightly below estimates, the big economic data release of the week is Friday morning’s PCE price index, the Fed’s preferred inflation gauge. Our June Monthly Meeting for Investing Club subscribers kicks off at noon ET Thursday.
- Baird upped its price target on Club name Palo Alto Networks by $20 a share to $360, implying nearly 11% upside from Wednesday’s close. After a meeting with management, analysts told clients that the cybersecurity provider is seeing steady demand and suggested a change to its remaining performance obligation may loom.
- Walgreens shares are tumbling almost 20% after a big earnings miss and cut to its full-year profit guidance. Despite positive results for its health-care unit, the drugstore business continues to face challenges. CEO Tim Wentworth told CNBC the company plans to keep its U.K. drugstore chain Boots despite reports it was looking for buyers. Even before Thursday’s earnings plunge, Walgreens was down 40% year to date.
- A round of price-target cuts for General Mills after its disappointing earnings report and profit outlook. Wells Fargo went to $67 a share from $70, while Bank of America lowered its target to $68 also from $70. Management said on the earnings call that “value-seeking behaviors” from customers are impacting the products they’re buying. But I also think the GLP-1 weight-loss drugs are impacting demand for General Mills’ products.
- Truist raised its price target on Club name Nvidia to $140 a share from roughly $129, implying about 11% upside from Wednesday’s close. Analysts said the chipmaker is still the best way to invest in the artificial intelligence theme, and downplayed concerns that becoming the most valuable company in the world last week, albeit briefly, could limit future returns.
- In a commentary for Club members, we looked at potential entry points for Nvidia and the other stocks that make up the so-called Super Six. We did this exercise back in January, but decided to revisit it after some of the recent selling in Big Tech names.
- Shares of Levi Strauss are plunging after a slight miss on revenue for the three months ended May 26. That’s despite the growing popularity of denim clothing items beyond jeans. CEO Michelle Gass told me on “Mad Money” that sales of denim skirts and dresses were up triple digits last quarter. What if Levi’s got rid of its Docker brand like Ralph Lauren shed Club Monaco and licensed out Chaps?
- The truth is Micron was great. Quarterly earnings and revenue beat estimates. Investors selling the stock down more than 4.5% early Thursday on an in-line revenue forecast are wrong. Many Wall Street analysts actually raised their price targets on Micron.
- Amazon plans to launch a discount e-commerce storefront to compete with Temu and Shein. The cut-price online Chinese retailers have expanded in the U.S. in recent years, spending tons of money on social media to find new customers. We’ve written recently about the benefits and the risks of that revenue stream to Club name Meta Platforms.
- Paychex price target increased at Bank of America and trimmed at Morgan Stanley and Baird. All three kept their hold-equivalent ratings. The analysts at each firm saw good and bad in the quarter. Paychex CEO John Gibson told me Wednesday evening on “Mad Money” that he sees moderate growth for small businesses.
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