What Cramer is watching Tuesday — chip troubles, Apple estimate raises, Disney price target cut

Published Tue, Oct 11 20229:07 AM EDTUpdated Tue, Oct 11 20229:22 AM EDT

What I am looking at Tuesday, Oct. 11, 2022 It's Taiwan Semiconductor Manufacturing Company (TSM) and Samsung's turn to fall apart as Chinese semiconductor ban deepens. Fin de siècle (end of an era). But Morgan Stanley says TSMC is a "catalyst buy" ahead of Thursday's analyst meeting. Will Micron Technology (MU) be the leader in the semis downward and all others follow? Sure seems that way. Weakness in the sector dragged the Nasdaq down to a two-year low. Our Club chipmakers: Advanced Micro Devices (AMD), Nvidia (NVDA), Marvell Technology (MRVL) and Qualcomm (QCOM) were hit Monday and are largely under pressure in the premarket. The Club reduced exposure to the sector Monday, trimming QCOM . Gartner says worldwide personal computer shipments down 19.5% in the third quarter over last year. PC market experiences steepest declines in two decades. Hurting chipmakers. PC-makers HP Inc. (HPQ) down nearly 28% in Q3; Dell (DELL) down 21%; and Club holding Apple (AAPL) down 15.6%. "Historic slowdown," says Gartner. Back to school bad. Business side geopolitical and economic uncertainties. As for Apple, KeyBanc raises estimates for iPhone revenue on higher average selling prices. KeyBanc keeps overweight (buy) rating and $185-per-share price target. Barclays raises Apple hardware revenue estimate, driven by a "slight iPhone upside and much better MacBooks," offsetting weakness in services; lowers price target to $155 per share from $169 but keeps equal weight (hold) rating. Atlantic Securities takes Club holding Meta Platform (META) to neutral from overweight (hold from buy); sees the Facebook parent as "increasingly challenged" and faces downside earnings risk. Barclays totally trashes Disney (DIS), cuts price target to $105 per share from $120; says it will miss the quarter badly but keeps it as an equal weight (hold) rating. Club name, taking long picture but boy is this hated. What do people want? Is it really a pathetic franchise? Wedbush starts beer, wine and spirits company Constellation Brands (STZ) with an outperform (buy) rating and a $275-per-share price target. The Club stock closed Monday at $221. Chemical company Westlake (WLK) price-target cut to $105 per share from $112 at Barclays, which keeps neutral (hold) rating. This is typical of the nonsense we have to deal with at this point in the cycle. Pricing is collapsing for Westlake, which is at $89 per share. I am sure Barclays would have liked to slash this target to $80 and make it a sell as all plastics and chemicals are collapsing as we saw Monday with the devastating preannouncement of PPG Industries (PPG). As far as PPG goes, Barclays cuts PT to $130 from $150. Classic end-of-cycle behavior. You need a new auto cycle to get this back to where this PT makes sense. Eastman Chemical (EMN), Dow Inc. (DOW), DuPont (DD). Axalta Coating Systems (AXTA) and LyondellBasell (LYB), too. Auto cycle falling apart. (Jim Cramer's Charitable Trust is long AMD, NVDA, MRVL, QCOM, AAPL, META, DIS and STZ. 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. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Taiwan is home to more than 90% of the manufacturing capacity for the world's most advanced semiconductors, according to a 2021 Boston Consulting Group report. Pictured here is a TSMC building in Taiwan on April 8, 2022.

Bloomberg | Bloomberg | Getty Images

What I am looking at Tuesday, Oct. 11, 2022

It's Taiwan Semiconductor Manufacturing Company (TSM) and Samsung's turn to fall apart as Chinese semiconductor ban deepens. Fin de siècle (end of an era). But Morgan Stanley says TSMC is a "catalyst buy" ahead of Thursday's analyst meeting.
Will Micron Technology (MU) be the leader in the semis downward and all others follow? Sure seems that way. Weakness in the sector dragged the Nasdaq down to a two-year low.
Our Club chipmakers: Advanced Micro Devices (AMD), Nvidia (NVDA), Marvell Technology (MRVL) and Qualcomm (QCOM) were hit Monday and are largely under pressure in the premarket. The Club reduced exposure to the sector Monday, trimming QCOM.
Gartner says worldwide personal computer shipments down 19.5% in the third quarter over last year. PC market experiences steepest declines in two decades. Hurting chipmakers. PC-makers HP Inc. (HPQ) down nearly 28% in Q3; Dell (DELL) down 21%; and Club holding Apple (AAPL) down 15.6%. "Historic slowdown," says Gartner. Back to school bad. Business side geopolitical and economic uncertainties.