What Cramer is watching Wednesday — Netflix stumbles, P&G beats, AMD's 'purgatory stage'

Published Wed, Apr 20 20229:31 AM EDTUpdated Wed, Apr 20 202211:06 AM EDT

What I am looking at April 20, 2022 Netflix (NFLX) shares plummet in premarket trading after the streaming company reported a loss of 200,000 subscribers during the first quarter. Why? 1. Tech is beyond their control; 2. 100 million users are cheating by sharing subscriptions outside their households … really? 3. More competition; 4. Ads? Profitable hit-driven business with giant cost structure, but also many good franchises. Why didn't we know about the stealing? How about Super Bowl ads for Super Bowl-like numbers? Games not working? Covid was totally a pull-forward. Like Zoom (ZM), Docusign (DOCU) and Peloton (PTON)? Or too harsh ... A 20 multiple on 2025 earnings gets you to $300 stock price. ASML : What are the key metrics for this chipmaker? Sales (not as good). EPS (not as good). Orders (very good) ... perhaps that's it. IBM — I see a return to growth and some purity to the earnings. Arguably 8% revenue growth and 20% growth of Red Hat (roughly). Some purists will say that Kyndryl (KD) — which was created from the spin-off of IBM's infrastructure services business — is still distorting numbers in a positive way. Security up 8 is very good. They did very well excluding Russia (as opposed to Netflix). Platform based on mainframe that is hybrid cloud is working. Trying to find out what the Nvidia (NVDA) partnership is about and McDonald's (MCD) ordering deal. Can banks live without this company? Barclays likes Hertz (HTZ) and takes price target up a buck to $25. Is Stephen Scherr's company an inflation winner? Avis Budget (CAR) upgraded to hold from sell. Analyst "incrementally constructive" on rental car space with rising inflation. Simple or simplistic? Tilray (TLRY) — brutal price target cut at Barclays to $4.50 from $8.50, based on cannabis company's plan to sell $400 million of shares at-the-market (ATM) just when New Jersey legalizes pot. Advanced Micro Devices (AMD) in "purgatory stage" of the semiconductor cycle, says Deutsche Bank ... Analyst drops price target to $115 from $125 to $115, but demand remains strong. Investor concerns of a cyclical slowdown are likely to persist. This note on this Club name is important because it states that the stock may actually have overshot. I think low end PC sales slowdown is built in to price. Same analysis on price target cut for GlobalFoundries (GFS) purgatory cycle: $70 from $78. More catch up to the downside ... Club holding Marvell Technology (MRVL) gets cut to $80 from $90. This is the best one of the lot: 5G and high-performance computing. On analyst day Lululemon Athletica (LULU) announces five-year growth plan to double sales to $12.5 billion by 2026. Aggressive? I don't think so ... men's sales and direct-to-consumer. Truist Financial (TFC) price target lowered to $62 from $69 at Piper Sandler. Johnson & Johnson (JNJ) getting some big price target hikes. Credit Suisse hikes to $205 from $100. Citi goes to $210 from $203. Runaway dollar is insane, but part of what is negative about this quarter. Amazon (AMZN) added to Focus List at Citi, assumes with a buy. Alphabet (GOOGL) also assumed with a buy. Reassertion of growth — trying to resurrect FANG? Good luck. Club owns both names. Lockheed Martin (LMT) price target raised to $539 from $515 at Susquehanna. Department of Defense still hostage to the F-35 2023 orders. Procter & Gamble (PG) top and bottom line beats for one of our most recent buys for the Club. Kohl's (KSS) shareholder Macellum Advisors goes after retailer with new video highlighting need for boardroom change. Hasbro (HAS) price target lowered to $105 from $115 at KeyBanc — gratuitous. Mortgage applications to purchase a home fell 3% for the week and 14% less than same period a year ago. Rate hikes keep working. Wayfair (W) price target lowered to $90 from $145 at Morgan Stanley, keeps sell rating. Starbucks (SBUX) target lowered to $105 from $115 at MKM Partners. Skewing negatively ... pricing, inflation and demand. Domino's (DPZ) price target dropped to $440 from $490 to $440. Apple (AAPL): iPhone 13 sales up big ... may be cautious about China but will beat numbers and should be bought on any weakness, says Morgan Stanley analyst Katy Huberty, who really matters. Price target $210. Nvidia (NVDA) — Buyback not a reason to buy stock, but Piper Sandler says it. Deutsche Bank just slags it with lower price target. We still love it. (Jim Cramer's Charitable Trust is long AAPL, AMD, MRVL, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. 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Reed Hastings, Co-CEO, Netflix speaks at the 2021 Milken Institute Global Conference in Beverly Hills, California, U.S. October 18, 2021.

David Swanson | Reuters

What I am looking at April 20, 2022

Netflix (NFLX) shares plummet in premarket trading after the streaming company reported a loss of 200,000 subscribers during the first quarter. Why? 1. Tech is beyond their control; 2. 100 million users are cheating by sharing subscriptions outside their households … really? 3. More competition; 4. Ads? Profitable hit-driven business with giant cost structure, but also many good franchises. Why didn't we know about the stealing? How about Super Bowl ads for Super Bowl-like numbers? Games not working? Covid was totally a pull-forward. Like Zoom (ZM), Docusign (DOCU) and Peloton (PTON)? Or too harsh ... A 20 multiple on 2025 earnings gets you to $300 stock price.
ASML: What are the key metrics for this chipmaker? Sales (not as good). EPS (not as good). Orders (very good) ... perhaps that's it.