The Investing Club's top 10 things to watch in the stock market Monday

Published Mon, Oct 16 20239:09 AM EDT

The Club's top 10 things to watch Monday, Oct. 16 1. Stocks edge up in premarket trading Monday, with S & P 500 futures rising 0.53% ahead of a busy week of third-quarter corporate earnings. Bond yields are mainly flat, with that of the 10-year Treasury hovering above 4.6%. Oil prices tick up, with West Texas Intermediate crude climbing above $88 a barrel. 2. Pfizer (PFE) slashes its full-year earnings guidance on weaker demand for its Covid products . The pharmaceuticals giant now expects adjusted earnings-per-share in a range of $1.45 to $1.65, down from a prior range of $3.25 to $3.45, while announcing a $3.5 billion cost-cutting program. The stock is down more than 35% year-to-date. But Pfizer finds a buyer on the reset, with Jefferies upgrading the stock to buy from hold, while raising its price target on the stock to $39 a share, up from $38. 3. Congratulations to Lululemon Athletica (LULU) for obtaining the coveted Activision Blizzard (ATVI) spot on the S & P 500, starting Oct. 18. The decision comes as Club holding Microsoft (MSFT) closes its long-awaited $69 billion acquisition of the video game publisher. 4. UBS upgrades UnitedHealth Group (UNH) to buy from neutral, with a $640-per-share price target, calling the insurer's strong third-quarter earnings a clearing event that should lead to a higher valuation. We prefer Club name Humana (HUM) for its strong Medicare Advantage growth and a discount multiple to UNH. 5. JPMorgan upgrades Nucor (NUE) to neutral from underweight, with an unchanged price target of $151 a share. The firm is positive on the steel maker's exposure to infrastructure, but expects free cash flow and shareholder returns to decline next year. 6. Vertical Research upgrades Club holding Veralto Corp. (VLTO), the water quality business spun off from Danaher (DHR) late last month, to buy from hold, with an $82-per-share price target. Vertical thinks VLTO's strong gross margins and recurring revenues support a higher relative valuation. 7. UBS lowers its price target on Netflix (NFLX) to $500 a share, down from $525, while reiterating a buy rating on the stock. The firm expects Netflix's revenue and operating-income growth to accelerate in the third quarter, even as it lowers 2024 estimates due to a more gradual ramp up in the streaming service's advertising tier and more measured margin expansion. Netflix reports quarterly results Wednesday. 8. Piper Sandler designates Microsoft (MSFT) its "highest conviction large-cap stock to own into year-end," citing the Club name's advantages in generative artificial intelligence. Piper reiterates an overweight rating on the stock, with a $400 per-share price target. 9. Morgan Stanley lowers its price target on Club holding Apple (AAPL) to $210 a share, down from $215, while reiterating an overweight rating on the stock. The firm expects Apple's September quarter will be inline with analysts' forecasts, even as iPhone shortages and currency headwinds could result in a below-seasonable December guidance. 10. Stifel upgrades Colgate-Palmolive (CL) to buy from hold, while lowering its price target to $81 a share, down from $85. The firm cites CL's strong pricing and volume improvement. Meanwhile, Morgan Stanley names CL as its top pick in household products and personal care, while calling its valuation discount too high. Sign up for Jim Cramer's 10 Morning Thoughts on the Market email newsletter for free . (See here for a full list of the stocks at Jim Cramer's Charitable Trust.) 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.

The Club's top 10 things to watch Monday, Oct. 16

1. Stocks edge up in premarket trading Monday, with S&P 500 futures rising 0.53% ahead of a busy week of third-quarter corporate earnings. Bond yields are mainly flat, with that of the 10-year Treasury hovering above 4.6%. Oil prices tick up, with West Texas Intermediate crude climbing above $88 a barrel.

2. Pfizer (PFE) slashes its full-year earnings guidance on weaker demand for its Covid products. The pharmaceuticals giant now expects adjusted earnings-per-share in a range of $1.45 to $1.65, down from a prior range of $3.25 to $3.45, while announcing a $3.5 billion cost-cutting program. The stock is down more than 35% year-to-date. But Pfizer finds a buyer on the reset, with Jefferies upgrading the stock to buy from hold, while raising its price target on the stock to $39 a share, up from $38.

3. Congratulations to Lululemon Athletica (LULU) for obtaining the coveted Activision Blizzard (ATVI) spot on the S&P 500, starting Oct. 18. The decision comes as Club holding Microsoft (MSFT) closes its long-awaited $69 billion acquisition of the video game publisher.

4. UBS upgrades UnitedHealth Group (UNH) to buy from neutral, with a $640-per-share price target, calling the insurer's strong third-quarter earnings a clearing event that should lead to a higher valuation. We prefer Club name Humana (HUM) for its strong Medicare Advantage growth and a discount multiple to UNH.

5. JPMorgan upgrades Nucor (NUE) to neutral from underweight, with an unchanged price target of $151 a share. The firm is positive on the steel maker's exposure to infrastructure, but expects free cash flow and shareholder returns to decline next year.

6. Vertical Research upgrades Club holding Veralto Corp. (VLTO), the water quality business spun off from Danaher (DHR) late last month, to buy from hold, with an $82-per-share price target. Vertical thinks VLTO's strong gross margins and recurring revenues support a higher relative valuation.

7. UBS lowers its price target on Netflix (NFLX) to $500 a share, down from $525, while reiterating a buy rating on the stock. The firm expects Netflix's revenue and operating-income growth to accelerate in the third quarter, even as it lowers 2024 estimates due to a more gradual ramp up in the streaming service's advertising tier and more measured margin expansion. Netflix reports quarterly results Wednesday.

8. Piper Sandler designates Microsoft (MSFT) its "highest conviction large-cap stock to own into year-end," citing the Club name's advantages in generative artificial intelligence. Piper reiterates an overweight rating on the stock, with a $400 per-share price target.

9. Morgan Stanley lowers its price target on Club holding Apple (AAPL) to $210 a share, down from $215, while reiterating an overweight rating on the stock. The firm expects Apple's September quarter will be inline with analysts' forecasts, even as iPhone shortages and currency headwinds could result in a below-seasonable December guidance.

10. Stifel upgrades Colgate-Palmolive (CL) to buy from hold, while lowering its price target to $81 a share, down from $85. The firm cites CL's strong pricing and volume improvement. Meanwhile, Morgan Stanley names CL as its top pick in household products and personal care, while calling its valuation discount too high.

Sign up for Jim Cramer's 10 Morning Thoughts on the Market email newsletter for free.

(See here for a full list of the stocks at Jim Cramer's Charitable Trust.)

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.