My top 10 things to watch Friday, March 31
1. End of the month and the first quarter on Wall Street. Yields on the 10-year and 2-year Treasurys continue to obscure the forest. The Dow, the S&P 500 and the Nasdaq are set for a higher open after cooler-than-expected February inflation data. The stock market comeback in beaten-down tech in 2023 has made the Nasdaq the star year-to-date: up nearly 15%.
2. AI is a real problem for Club holding Alphabet (GOOGL), according to Piper Sandler, which lowers price target to $117 per share from $120. Keeps overweight (buy) rating. Revenue "at risk" of $15 billion. Club stocks benefitting from artificial intelligence: Microsoft (MSFT), backer of company behind ChatGPT and Nvidia (NVDA), whose fast chips are needed to run AI.
3. Odd call for Club name Constellation Brands (STZ), which reports its quarter next week. Barclays raises its price target by $1 per share to $279. Keeps overweight (buy) rating. Barclays is ahead of consensus. In candor, this stock acts horribly as if it's going to be a miss. We keep it because it has great cash flow and because Mexican beers, Modelo and Corona, are historically recession resistant.
4. TD Cowen upgrades Restaurant Brands (QSR) to outperform from market perform (buy from hold). Raises price target to $75 per share from $72. Analysts see a turnaround for Burger King. Helps that Pat Doyle, who used to run Domino's Pizza (DPZ), is in there as executive chairman, trying to get things moving.
5. CarMax (KMX) price target cut by $2 per share to $51 at Stephens ahead of latest quarterly numbers out next month. This is a challenged group.
6. Virgin Orbit (VORB) goes under. Halting operations "for the foreseeable future" and laying off 675 people or about 90% of its workforce. Had been a blank check firm.
7. Baird raises price target on Okta (OKTA) to $100 per share from $92. CEO on "Mad Money" last night. Okta really doing well in identity business after key pivot toward profitability.
8. Morgan Stanley raises price target on e.l.f. Beauty (ELF) to $94 per share from $75 . Doing really well. Near-term upside. In beauty, the Club likes and owns Estee Lauder (EL).
9. JPMorgan raises Chubb (CB) price target by $2 per share from $241. Healthy business. The insurance and reinsurance company doing incredibly well.
10. Everyone likes Block (SQ), formerly known as Square, after the Jack Dorsey-led company issued a rebuttal against the Hindenburg short-seller note that's loaded with accusations.
(Jim Cramer's Charitable Trust is long GOOGL, MSFT, NVDA, STZ, EL. See here for a full list of the stocks.)
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