10.11.2024 - NEW STOCKBURGER

Policymakers don't want to tank the stock market

10.11.2024 by admin

Stocks surged after election results came in and the major news outlets declared former President Donald Trump the winner.

At the same time, the strength of the market response has arguably been at odds with what many economists consider the prospect of worse economic policies under President-elect Trump.

Maybe it’s traders and investors betting that policies bad for the market won’t actually be implemented. After all, what president would want to be affiliated with wealth destruction caused by falling stock prices?

While there are many aspects of the economy (like inflation and employment) that can be tricky to define and measure, stock prices are very unambiguous. People’s investment portfolio values are regularly updated down to the penny.

I’d add that those voters with money in the stock market include the many billionaires with whom the incoming president has gotten cozy. And much of these billionaires’ wealth is tied up in the stock market.

Assuming the president does not want to be associated with destroying the investor class’ wealth, this means his administration will likely think twice about going all-in on policies that could prove costly to the companies in the stock market. More from Joe:

Fortunately, policies don’t necessarily have to be enacted for the stock market vigilantes to intervene.

The legislative process is an onerous one. And all along the way, there are usually leaks about how policy proposals evolve and advance. For the proposals that matter to markets, the stock market vigilantes will adjudicate any developments in real-time by bidding prices up and down.

This means that harmful trade policies might actually never see the light of day if the stock market sends a strong enough signal, and the president is paying attention.

Because who would want to be remembered for being one of the very few presidents who was in office when the stock market fell?

I’m not sure speculating on the financial interests of policymakers, their billionaire backers, and their voting base is a bullet-proof strategy.

It sure sounds like a reasonable one though.

Being exposed to the stock market regardless of whom you voted for has historically been a good idea — and when you are exposed to the stock market, your financial interests are essentially aligned with those calling the shots because they are politically exposed to the stock market (and the economy).

Now to be clear, just because policymakers intend to bolster stock prices doesn’t necessarily mean they’ll be successful at it. Maybe President Trump, regardless of the policy landscape, sees the stock market fall during his term.

The good news is that cumulative returns for investors who are able to put in the time tend to be favorable, even when you are exposed to the stock market during a four-year stretch when prices fall.

There were a few notable data points and macroeconomic developments from last week to consider:

Fed cuts rates again, as expected. The Federal Reserve announced its second consecutive interest rate cut. On Wednesday, the Fed lowered its benchmark interest rate target range to 4.5% to 4.75%, down from 4.75% to 5%.

“Recent indicators suggest that economic activity has continued to expand at a solid pace,” the central bank said on Thursday in its monetary policy statement. “Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2% objective but remains somewhat elevated.”

As we’ve been discussing for most of this year, I think this whole matter of rate cuts is not that big of a deal. Yes, monetary policy matters, and it can move the needle on the economy. But monetary policy decisions are much more consequential, market-moving events during times of stress or crisis in the markets or the economy.

Consumer vibes improve. From the University of Michigan’s November Surveys of Consumers: “Heading into the election, consumer sentiment improved for the fourth consecutive month, rising 3.5% to its highest reading in six months. While current conditions were little changed, the expectations index surged across all dimensions, reaching its highest reading since July 2021. Expectations over personal finances climbed 6% in part due to strengthening income prospects, and short-run business conditions soared 9% in November. Long-run business conditions increased to its most favorable reading in nearly four years. Sentiment is now nearly 50% above its June 2022 trough but remains below pre-pandemic readings. Note that interviews for this release concluded on Monday and thus do not capture any reactions to election results.”

Weak consumer sentiment readings appear to contradict resilient consumer spending data.

Card spending data is holding up. From JPMorgan: “As of 29 Oct 2024, our Chase Consumer Card spending data (unadjusted) was 1.7% above the same day last year. Based on the Chase Consumer Card data through 29 Oct 2024, our estimate of the U.S. Census October control measure of retail sales m/m is 0.59%.”

From BofA: “Total card spending per HH was up 0.9% y/y in the week ending Nov 2, according to BAC aggregated credit & debit card data. Within sectors we report, online electronics, entertainment, transit & airlines showed the most y/y decline since last week. Furniture, department stores and home improvement showed small increases on a y/y basis since last week.“

Unemployment claims tick higher. Initial claims for unemployment benefits rose to 221,000 during the week ending November 2, up from 218,000 the week prior. This metric continues to be at levels historically associated with economic growth.

Wage growth is cooling. According to the Atlanta Fed’s wage growth tracker, the median hourly pay in October was up 4.6% from the prior year, down from the 4.7% rate in September.

Labor productivity inches up. From the BLS: “Nonfarm business sector labor productivity increased 2.2% in the third quarter of 2024, the U.S. Bureau of Labor Statistics reported today, as output increased 3.5 percent and hours worked increased 1.2%. … From the same quarter a year ago, nonfarm business sector labor productivity increased 2.0% in the third quarter of 2024.”

From BofA: “Most of the recent growth is likely a function of pandemic normalization, but increased new business formation and investment could make it sustainable. A sustained pickup in productivity would mean trend growth could stay elevated as the tailwind from labor supply fades and a higher r*.“

Gas prices tick lower. From AAA: “Faced with a rare November hurricane churning in the gulf, the national average for a gallon of gas only fell by three cents since last week to $3.10.”(Source: AAA)

Mortgage rates tick higher. According to Freddie Mac, the average 30-year fixed-rate mortgage rose to 6.79%, up from 6.72% last week. From Freddie Mac: “It is clear purchase demand is very sensitive to mortgage rates in the current market environment. As soon as rates began to rise in early October, purchase applications fell and over the last month have declined 10%.”

There are 147 million housing units in the U.S., of which 86.6 million are owner-occupied and 34 million of which are mortgage-free. Of those carrying mortgage debt, almost all have fixed-rate mortgages, and most of those mortgages have rates that were locked in before rates surged from 2021 lows. All of this is to say: Most homeowners are not particularly sensitive to movements in home prices or mortgage rates.

Business investment activity ticks higher. Orders for nondefense capital goods excluding aircraft — a.k.a. core capex or business investment — increased 0.7% to $74.1 billion in September

Core capex orders are a leading indicator, meaning they foretell economic activity down the road. While the growth rate has leveled off a bit, they continue to signal economic strength in the months to come.

Supply chain pressures remain loose. The New York Fed’s Global Supply Chain Pressure Index — a composite of various supply chain indicators — ticked lower in October and remains near historically normal levels. It’s way down from its December 2021 supply chain crisis high.

Offices remain relatively empty. From Kastle Systems: “Peak day office occupancy on Tuesday rose eight tenths of a point last week to 62.1%, about one point shy of the 63% high reached at the end of January 2024. New York and Houston both experienced record-high post-pandemic occupancy last Tuesday, reaching 68.8% and 72.6%, respectively. Dallas nearly hit its record high as well, rising 2.9 points to 70.7%. The average low across all 10 cities was unchanged from the previous week, again on Friday at 32.9%.“

Services surveys look great. From S&P Global’s October Services PMI: “The US service sector notched up another strong performance in October, helping offset the current weakness of the manufacturing sector to drive a solid pace of overall economic growth again at the start of the fourth quarter. The services economy’s consistently impressive growth in recent months has helped the US outperform all other major developed economies. October’s strong performance is consistent with GDP continuing to rise at an annualized rate in excess of 2%.”

Similarly, the ISM’s October Services PMI signaled growth.

Keep in mind that during times of perceived stress, soft survey data tends to be more exaggerated than hard data.

Near-term GDP growth estimates remain positive. The Atlanta Fed’s GDPNow model sees real GDP growth climbing at a 2.5% rate in Q4.

The outlook for the stock market remains favorable, bolstered by expectations for years of earnings growth. And earnings are the most important driver of stock prices.

Demand for goods and services is positive, and the economy continues to grow. At the same time, economic growth has normalized from much hotter levels earlier in the cycle. The economy is less “coiled” these days as major tailwinds like excess job openings have faded.

To be clear: The economy remains very healthy, supported by strong consumer and business balance sheets. Job creation remains positive. And the Federal Reserve — having resolved the inflation crisis — has shifted its focus toward supporting the labor market.

We are in an odd period given that the hard economic data has decoupled from the soft sentiment-oriented data. Consumer and business sentiment has been relatively poor, even as tangible consumer and business activity continue to grow and trend at record levels. From an investor’s perspective, what matters is that the hard economic data continues to hold up.

Analysts expect the U.S. stock market could outperform the U.S. economy, thanks largely due to positive operating leverage. Since the pandemic, companies have adjusted their cost structures aggressively. This has come with strategic layoffs and investment in new equipment, including hardware powered by AI. These moves are resulting in positive operating leverage, which means a modest amount of sales growth — in the cooling economy — is translating to robust earnings growth.

Of course, this does not mean we should get complacent. There will always be risks to worry about — such as U.S. political uncertainty, geopolitical turmoil, energy price volatility, cyber attacks, etc. There are also the dreaded unknowns. Any of these risks can flare up and spark short-term volatility in the markets.

There’s also the harsh reality that economic recessions and bear markets are developments that all long-term investors should expect to experience as they build wealth in the markets. Always keep your stock market seat belts fastened.

For now, there’s no reason to believe there’ll be a challenge that the economy and the markets won’t be able to overcome over time. The long game remains undefeated, and it’s a streak long-term investors can expect to continue.

A version of this story first appeared on TKer.co

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Trump’s presidency carries plenty of market risk, experts warn

10.11.2024 by admin

Stocks notched their best week of the year as investors cheered President-elect Donald Trump’s economic agenda.

“Tax cuts are behind the rally … and in general, there is the perception that markets like Republican administrations, although certainly the performance for the past few years of the Democratic administration has not exactly been shabby,” Interactive Brokers’ Steve Sosnick explained to me on Yahoo Finance’s special election coverage.

The Dow Jones Industrial Average (^DJI) skyrocketed more than 1,700 points from Wednesday through Friday, closing the week up 4.6%. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) surged to a record, while the Russell 2000 (^RUT) hit its highest level since November 2021.

But the market should be careful what it wishes for. Experts tell me as clarity emerges, a resurgence in inflation from trade tariffs and additional government spending could pose a risk to the market’s momentum and temper rate cuts from the Fed.

“The sharp spike [in the markets] is, to some extent, a reaction to the expectation of solid growth, deregulation, tax cuts … But the other part of that, of course, is that it can lead to greater inflation and wider fiscal deficits,” Sonal Desai, Franklin Templeton Fixed Income chief investment officer, told me on Catalysts.

Stifel’s Barry Bannister, who sees a downside risk of 5,250 for the S&P 500 a year from now, is keeping a close watch for a resurgence in inflation. S&P closed out the week above 6,000.

“If inflation proves resurgent … we suspect Chairman Powell’s last 12 months in office (May 2025 to May 2026) are a significant investor risk, magnified by the repercussions of the approaching 2026 US midterm elections,” Bannister wrote in a note to clients.

Truist co-chief investment officer Keith Lerner echoed the point on a new episode of the Opening Bid podcast (listen in below).

Deutsche Bank anticipates Trump’s fiscal, trade, and immigration policies could result in an upward adjustment to its inflation forecast. The team, led by Matthew Luzzetti, projects inflation could rise by roughly 0.5% in 2026 to about 2.5%, primarily due to the inflationary impact of tariffs.

Reports Friday that Trump asked Robert Lighthizer to return to his administration as US trade Representative could signal a more aggressive approach to tariffs. During Trump’s first term, Lighthizer played a key role in his escalating trade war with China, implemented tariffs on steel and aluminum imports, and helped renegotiate the US’s trade agreement with Mexico and Canada.

For investors, hardware stocks are among the tech stocks that are “most at-risk” given smartphones, PCs, tablets, wearables, and servers are still primarily assembled in China, according to Morgan Stanley.

“We estimate that if President-elect Trump were to use executive orders to reinstitute Section 301 tariffs on goods imported from China, our coverage would face, on average, 4-7% downside to FY25 EPS,” Erik Woodring wrote in a note to clients this week, warning that Dell (DELL), HPQ (HPQ), and Logitech (LOGI) would face the “greatest headwinds.”

The prospect of tariffs, coupled with an extension of the 2017 tax cuts, are a “highly dangerous” mix for the economy and the market and could lead to higher prices, according to veteran economist Nouriel Roubini.

If Elon Musk heads up DOGE, it may unsettle Tesla stock: Analyst

“If you take at face value what he wants to do on trade, on currency, on monetary and fiscal policy, [the policies would] be highly dangerous,” Roubini warned on Morning Brief earlier this year.

Other tax-related ideas floated by Trump, including lowering the corporate tax rate to 15% and a pledge to end taxing on tips, overtime pay, and social security benefits, point to additional risks of a ballooning deficit.

“For the first time in my lifetime, I’m actually becoming very concerned,” Dennis Gartman, former editor of the Gartman Letter, told me. “I’m worried about the economy and the country fiscally going forward for the younger generation.”

The Committee for a Responsible Federal Budget estimates the policies outlined by Trump through his campaign could add $7.75 trillion to the national debt over the next 10 years, driven in part by plans to extend tax cuts, further cut taxes for corporations and small businesses, and expand deportations.

Seana Smith is an anchor at Yahoo Finance. Follow Smith on Twitter @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email seanasmith@yahooinc.com.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

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Seana Smith is an anchor at Yahoo Finance. Follow Smith on Twitter @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email seanasmith@yahooinc.com.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

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TKO INVESTOR UPDATE: Did the TKO Group Holdings Board Breach its Fiduciary Duties to Shareholders? Contact BFA Law about its Investigation (NYSE:TKO)

10.11.2024 by admin

NEW YORK, Nov. 10, 2024 (GLOBE NEWSWIRE) — Leading securities law firm Bleichmar Fonti & Auld LLP announces an investigation into TKO Group Holdings, Inc. TKO, the board of directors, and the controlling stockholder for potential breaches of fiduciary duty.

If you are a holder of TKO Group Holdings, you are encouraged to obtain additional information by visiting https://www.bfalaw.com/cases-investigations/tko-group-holdings-inc.

Investigation Details:

TKO is controlled by Endeavor Group Holdings, Inc. (“Endeavor”) through its ownership of 53.6% of the total voting power of the Company’s voting stock. Endeavor has designated a majority of directors to the board of directors of TKO. As a result of its control, Endeavor can influence TKO to engage in conflicted transactions and control the outcome of TKO’s corporate actions that typically would require shareholder approval.

On October 24, 2024, TKO announced that it had entered into a transaction agreement with Endeavor Operating Company, LLC, a subsidiary of Endeavor, pursuant to which TKO agreed to acquire the Professional Bull Riders, On Location and IMG businesses from Endeavor for $3.25 billion in Company stock (the “Acquisition”). As a result of the Acquisition, Endeavor will increase its ownership stake in TKO from approximately 53% to 59%. Minority shareholders will have no say in the Acquisition, as Endeavor has approved the Acquisition by written consent without a minority vote.

BFA believes that the Acquisition is a conflicted transaction that may have resulted in the Company overpaying for Endeavor’s businesses. Specifically, upon announcement of the Acquisition, TKO’s stock price fell by more than 5% and likely would have fallen further had TKO not simultaneously announced a $2 billion stock repurchase program. Given Endeavor’s control over TKO, BFA believes TKO minority stockholders may possess valid claims for breach of fiduciary duty against the board of directors of TKO and/or Endeavor.

Click here if you are a holder of TKO Group Holdings: https://www.bfalaw.com/cases-investigations/tko-group-holdings-inc.

What Can You Do?

If you are a current holder of TKO Group Holdings stock, you may have legal options and are encouraged to submit your information to the firm.

All representation is on a contingency fee basis, there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses.

Submit your information by visiting:

https://www.bfalaw.com/cases-investigations/tko-group-holdings-inc

Or contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619

Why Bleichmar Fonti & Auld LLP?

Bleichmar Fonti & Auld LLP is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd.

For more information about BFA and its attorneys, please visit https://www.bfalaw.com.

https://www.bfalaw.com/cases-investigations/tko-group-holdings-inc

Attorney advertising. Past results do not guarantee future outcomes.

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Mark Cuban Reveals Regrettable Shark Tank Deal That 'Drives Him Crazy' Was A Chocolate Covered Pretzel Company Who Offered Free Shipping

10.11.2024 by admin

In a 2017 Q&A with Oxford Union students, Mark Cuban opened up about one of his biggest regrets on Shark Tank – and he didn’t hold back. When asked about his commitment to the companies he invests in, Cuban emphasized that he’s there “’til death do us part” as long as the founders keep grinding.

Don’t Miss:

Out of his 71 investments on the show, about 12-15 are thriving, while three have exited (although, as he joked, “none really exciting”). Then he got real: at the bottom of his portfolio, Cuban revealed, “10 out of 71 … three have gone out of business and seven have gone out of business but aren’t smart enough to know it.” The crowd laughed, but Cuban didn’t let the moment slide without giving an example of a deal that “still drives him crazy.”

The investment he was talking about? A chocolate-covered pretzel company. Although he didn’t name it in the Q&A, the company was The Painted Pretzel, founded by Raven Thomas. Cuban had put $100,000 into the company for 25% equity after being impressed by Thomas’s passion and the product’s potential. With the huge PR boost from Shark Tank, sales skyrocketed by 1,500% post-episode – you’d think it was the beginning of something big. But behind the scenes, things unraveled fast.

Trending: The global games market is projected to generate $272B by the end of the year — for $0.55/share, this VC-backed startup with a 7M+ userbase gives investors easy access to this asset market.

The issue? Free shipping. Cuban explained that while the pretzels cost around $14, they sold for $29.95, which should’ve left a decent $15 profit margin. But shipping? It was $16 a pop. That “free shipping” perk that was supposed to attract more customers devoured the profit. Cuban described it like watching cash “just disappear,” adding, “Cash is going like this,” motioning to show how fast it bled out. And it wasn’t just shipping. The company reportedly faced complaints about delays, adding customer service issues to the pile.

Reflecting on the deal, Cuban admitted, “I probably shouldn’t have [invested],” hinting that it was partly to prove a point to his fellow sharks, especially Kevin O’Leary, when he was new to the show. “No lie, to this day, I still get emails …” he trailed off, looking visibly frustrated.

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Is Verizon Stock a Buy Now?

10.11.2024 by admin

Shares of telecom giant Verizon (NYSE: VZ) have been on an upswing. The stock is up about 14% over the past 12 months at the time of this writing. While a rising share price is welcome, perhaps the stock’s most appealing aspect is as an income investment.

Verizon’s dividend serves as a reliable source of passive income, given its 18 straight years of increases. It also sports an impressive forward-dividend yield of 6.5% as of Nov. 7.

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Given these positives, it seems like Verizon’s stock is worth buying for the long haul. But there’s a wrinkle to consider. In September, Verizon announced the impending acquisition of Frontier Communications Parent. Here’s a look into how the Frontier purchase may affect whether to buy Verizon stock.

Verizon’s desire to acquire Frontier is part of its gambit to capture customers in the expanding fiber-optic internet market. Demand for high-speed internet is increasing due to data-intensive online activities such as video calls and streaming media.

A key benefit of the deal is that it would expand Verizon’s fiber network. Frontier provides fiber-optic internet service across 25 states, which would raise Verizon’s fiber footprint to 31 states.

In terms of revenue, Frontier generated $1.5 billion in the third quarter, up 4% year over year thanks to rising adoption of its fiber offering. Meanwhile, Verizon’s Fios-branded fiber product produced $3.2 billion in Q3 sales, which was essentially flat from the previous year.

Once the Frontier acquisition closes, which is expected to take 18 months, Verizon’s Fios revenue will be boosted by Frontier’s addition. The acquisition makes sense in terms of strengthening Verizon’s broadband business, but downsides exist.

The Frontier purchase will be an all-cash transaction valued at $20 billion. According to media reports, Verizon looks to take on debt to finance the deal. The telecom already shoulders a hefty $126.4 billion in unsecured debt as of Q3.

Moreover, Frontier has amassed its own debt in excess of $11 billion. The company has stated, “We have a significant amount of indebtedness, and we may incur substantially more debt in the future. Such debt and debt service obligations may adversely affect us.”

Adding to this, Verizon will incur further capital expenditures as it continues to expand its fiber network. Frontier alone plans to reach 10 million homes by 2026, up from about seven million today.

All of this means Verizon must carefully balance debt payments, investments in its business, and dividend payouts. Otherwise, its streak of dividend increases could be at risk.

The telecom’s free cash flow (FCF) is an important indicator of its ability to meet these obligations. Exiting Q3, Verizon’s year-to-date FCF was $14.5 billion, which is a slight drop from 2023’s $14.6 billion.

When it comes to FCF, the Frontier acquisition won’t help. Frontier ended Q3 with negative FCF of $81 million. In fact, Frontier is not a profitable business. The company generated a net loss of $82 million in Q3.

Verizon views fiber as an important growth area for the company. If it can turn Frontier’s operations into a profitable business, the deal could be a good move over the long run. That’s because customers who adopt both Verizon’s mobile and internet services “show increased loyalty” and are less likely to leave the carrier, according to the company.

Certainly, Fios sales could use a shot in the arm. Its $3.2 billion is only a minor portion of Verizon’s $33.3 billion in Q3 revenue. The bulk of the telecom’s earnings comes from its mobile-wireless service. This segment saw Q3 sales increase 3% year over year to $19.8 billion.

If fiber paired with mobile service can help the latter’s sales, that’s a positive for investors. This coupled with Verizon’s 18 years of dividend increases and dependable FCF generation makes it a worthwhile income stock to consider as a long-term investment.

That brings us to whether now is the time to buy. One factor to weigh is its price-to-earnings (P/E) ratio, used to assess stock valuation. The P/E ratio tells you how much investors are willing to pay for a dollar’s worth of earnings.

The telecom’s P/E multiple is currently higher than it’s been in years. So there’s no rush to grab shares right now. Verizon stock has pulled back from its 52-week high of $45.36 reached in September. Wait for the stock to dip further before deciding to buy for its robust dividend.

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Robert Izquierdo has positions in Verizon Communications. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

Is Verizon Stock a Buy Now? was originally published by The Motley Fool

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META, UBER, or AMZN: Which “Strong Buy” Tech Stock Could Offer the Highest Upside?

10.11.2024 by admin

The Q3 earnings season for the tech giants has been a mixed bag. While some managed to impress investors with their performance and outlook, others fell short of expectations on some metrics. Wall Street remains upbeat on several tech giants, thanks to generative AI (artificial intelligence)-led tailwinds. Using TipRanks’ Stock Comparison Tool, we placed Meta Platforms (META), Uber Technologies (UBER), and Amazon (AMZN) against each other to find the “Strong Buy” stock with the highest upside potential, according to Wall Street analysts.

Social media giant Meta Platforms reported better-than-expected Q3 revenue and earnings for the third quarter of 2024. The company’s top line grew 19% year-over-year to $40.5 billion, while EPS (earnings per share) rose 37% to $6.03.

However, shares fell after the earnings report as investors were disappointed with Meta’s subdued user numbers. Daily active people (DAP), which indicates the number of users who visited at least one of the family apps (Facebook, Instagram, Messenger, and/or WhatsApp) on a given day, increased 5% to 3.29 billion but lagged analysts’ consensus of 3.31 billion.

Moreover, the company increased its capital expenditure guidance for 2024, with CEO Mark Zuckerberg cautioning investors about a significant rise in AI infrastructure capex in 2025.

Following the Q3 print, Baird analyst Colin Sebastian reaffirmed a Buy rating on META stock and increased the price target to $630 from $605. The analyst believes that the company’s strong Q3 results reflect a stable macro backdrop, healthy user growth and engagement trends, and the benefits of AI in ad products and content recommendations. He expects AI to drive further growth for Meta Platforms in the days ahead.

Like Sebastian, most analysts are bullish on Meta Platform’s prospects. META stock scores a Strong Buy consensus rating based on 41 Buys, three Holds, and one Sell recommendation. The average META stock price target of $654.23 implies 11% upside potential. Shares have rallied 66.5% year-to-date.

See more META analyst ratings

Uber Technologies stock fell 9.3% on October 31, as the company reported slower-than-expected bookings growth and triggered concerns among investors about the impact of macro pressures on the demand in the ride-hailing industry. The company’s gross bookings grew 16% year-over-year to $40.97 billion, falling short of analysts’ estimate of $41.25 billion.

On the positive side, Uber’s Q3 revenue increased 20% to $9.29 billion and surpassed estimates. The company’s earnings per share (EPS) jumped to $1.20 from $0.10 in the prior-year quarter, reflecting the inclusion of a $1.7 billion benefit from unrealized gains related to the reevaluation of its equity investments.

Looking ahead, Uber CEO Dara Khosrowshahi is confident about the company’s future and stated that the strength in its core business is supporting its organic investments in new products and capabilities to drive long term growth.

In reaction to the results, Goldman Sachs analyst Eric Sheridan reaffirmed a Buy rating on Uber Technologies stock with a price target of $96. The analyst thinks that following the post-earnings pullback, UBER is the best “absolute upside return idea” among Goldman’s large-cap coverage.

Sheridan explained that UBER’s equity story is focused on its expanding end markets, rising profitability levels, and increased evidence of the cross-sell opportunities on the platform, which should help investors reconsider the company’s growth, margins, and free cash flow potential.

With 32 Buys and two Holds, Wall Street has a Strong Buy consensus rating on Uber Technologies stock. The average UBER stock price target of $91.86 implies 27.5% upside potential from current levels. Shares have risen 17% so far this year.

See more UBER analyst ratings

Shares of e-commerce and cloud computing giant Amazon have jumped 37% year-to-date. The company recently impressed investors with its upbeat Q3 results. AMZN’s Q3 sales grew 11% to $158.9 billion, driven by strength in its retail, AWS (Amazon Web Services) cloud, and ad businesses.

Additionally, Q3 EPS surged over 50% to $1.43, driven by solid top-line growth and enhanced margins. Amazon’s aggressive streamlining and cost reduction measures are driving higher margins.

Like other tech giants, Amazon is also making significant investments to capture opportunities in AI. The company has made capital investments worth $51.9 billion so far in 2024 and expects to spend about $75 billion in capex in the full year.

On November 1, Citi analyst Ronald Josey increased the price target for Amazon stock to $252 from $245 and reaffirmed a Buy rating. Josey stated that following the Q3 results, he is incrementally confident about the company’s ability to make growth investments while delivering significant margin expansion.

Commenting on AWS, he noted that the unit’s AI business is a multibillion-dollar revenue run rate business that continues to grow at a triple-digit year-over-year rate. He expects generative AI revenue to boost AWS’ business, as new instances and demand ramp. For Citi, Amazon remains a top pick across the Internet sector.

Overall, Amazon scores a Strong Buy consensus rating on TipRanks based on 44 Buys and one Hold recommendation. At $238.35, the average AMZN stock price target implies 14.5% upside potential.

See more AMZN analyst ratings

Wall Street is highly bullish on the growth prospects of Meta Platforms, Uber Technologies, and Amazon. Analysts see the pullback in UBER as a good opportunity to buy the stock and gain from its long-term growth story. They see higher upside potential in Uber stock compared to the other two tech stocks.

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TipRanks’ ‘Perfect 10’ Picks: 2 Top-Scoring Stocks for the Rest of 2024

10.11.2024 by admin

With the end of 2024 approaching, what could be more natural than to figure out the top stocks for the rest of the year?

Stock picking of this sort is an essential skill for every investor, and fortunately, the Smart Score make it easier. This data gathering and sorting tool from TipRanks uses a combination of AI tech and natural language algorithms to gather and comb through the aggregated data of the stock market – data derived from thousands of traders dealing in thousands of stocks for tens of millions of daily transactions – and it uses that data to give every stock a simple score, on a scale of 1 to 10 and based on the stock’s standing against a set of factors known to match up with future outperformance.

We’ve opened up the TipRanks databanks to find two of these top-scoring stocks that investors should consider for the rest of 2024. These are ‘Perfect 10’ stocks, stocks that have earned the highest possible Smart Score.

Boot Barn Holdings (BOOT)

We’ll start in the retail world, with Boot Barn. This company operates in the lifestyle niche, offering customers a range of Western-themed apparel, footwear, and accessories. The company is particularly noted for its high-end Western boots and its cold-weather outdoor gear. Boot Barn also deals in hiking shoes and work boots, rugged work clothes, Western-style fashion, and even cowboy hats. The company’s clothing is marketed to men, women, and kids and is complemented by a range of décor and gifts.

The Boot Barn company was founded in 1978 and has grown since then to become the largest Western-themed lifestyle retail firm. The company operates through a network of brick-and-mortar stores, more than 420 of them across 46 states, and through an e-commerce operation that includes three websites: bootbarn.com, sheplers.com, and countryoutfitter.com.

BOOT shares have fallen 16% following the fiscal Q2 report on October 28. Revenue showed year-over-year growth, and earnings were in line with expectations, but investors reacted to the unexpected announcement that CEO Jim Conroy will step down on November 22.

Baird analyst Jonathan Komp sees the drop in share price as an opportunity and writes about the stock: “We were surprised by the stock’s sizable decline following the news CEO Jim Conroy plans to leave for Ross Stores in November, as strong continuity across BOOT’s remaining team reduces near-term disruption risk. Factoring BOOT’s +5% raise to F2025E EPS guidance, the >25% correction in BOOT’s NTM P/E appears overdone given strong comps momentum and near-term visibility. We also view pushback to BOOT’s ending inventory as flimsy, given limited markdown risk.”

Looking ahead, Komp quantifies the opportunity here, saying, “We remain confident in BOOT’s ability to deliver attractive relative earnings growth supported by compelling unit expansion opportunity. Valuation is back below the peer median, and we see a 12+ month bull-case approaching +50% upside with ~10-15% further downside justifying our move.”

These factors underpin Komp’s Outperform (i.e. Buy) rating on BOOT shares, with a price target of $167, suggesting a one-year upside potential of ~24%. (To watch Komp’s track record, click here)

Boot Barn has picked up 13 recent analyst reviews, and these break down to 10 Buys and 3 Holds to support the Strong Buy consensus rating. The shares are priced at $135.14 and have an average target price of $176.67, indicating potential for a ~31% gain in the months ahead. (See BOOT stock forecast)

Summit Therapeutics (SMMT)

Next on the list is Summit Therapeutics, a clinical-stage biopharma company that has brought a leading drug candidate, ivonescimab, into the late stages of the clinical testing process. The company has developed this candidate as a novel medicinal therapy with potential to treat a wide variety of cancers.

Ivonescimab is an advanced PD-1/VEGF bispecific antibody, a novel tetravalent molecule that combines two validated mechanisms in oncology and brings them to bear on the disease targets. To that end, Summit has multiple clinical trials ongoing for ivonescimab, in the US, China, and Australia. The most common disease target of these clinical trials is non-small-cell lung cancer, or NSCLC, the most common type of lung cancer. Across all of the clinical trials, to date, some 1,800 people have been treated with ivonescimab.

The most important recent news for Summit, and for ivonescimab, came in early September. At that time, the company announced that ivonescimab had beaten the results of Merck’s anti-cancer drug, Keytruda. Summit’s drug was tested in a Phase 3 trial, HARMONi-2, conducted in China, and showed that it could reduce the risk of disease progression or death by 49% when compared to the Merck drug. Summit’s shares jumped upward on the news, from $12.27 on Sept 6 to nearly $32 on September 13. While the shares have slipped back down since then, the stock remains elevated by almost 63% compared to the September 6 value.

Summit has several other catalysts coming up that have sparked analyst interest. The global Phase 3 HARMONi is expected to release topline data in the middle of next year, the global Phase 3 HARMONi-3 trial is scheduled for expansion, and the company expects to initiate the HARMONi-7 trial early in 2025.

This biotech firm caught the eye of JMP analyst Reni Benjamin, who likes the company’s strong clinical trial performance and its deep cash reserves.

“With lead asset Ivonescimab (Ivo) generating impressive data (doubling of PFS compared to pembrolizumab (pembro)) in a large randomized Phase 3 NSCLC trial in China, multiple Phase 3 U.S./Global NSCLC trials ongoing with one that has already completed enrollment, and a strong cash position of $487MM, we believe Summit shares represent a unique investment opportunity… We believe Summit has the potential to achieve commercialization in the smaller EGFRm and 1L NSCLC patient population, achieving $17.9B in global peak revenues upon the potential commercialization into 1L NSCLC by 2034,” Benjamin opined.

To this end, the analyst rates SMMT shares an Outperform (i.e. Buy), while his $32 price target implies a 50% gain for the next 12 months. (To watch Benjamin’s track record, click here)

Overall, there are 4 recent analyst reviews on record for this stock, with a 3-to-1 split favoring Buy over Hold, contributing to a Strong Buy consensus rating. With the stock currently trading at $21.41 and an average target price of $34.75, there’s an upside potential of 62% for the year ahead. (See SMMT stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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