My top 10 things to watch on Friday, March 8
1. U.S. job growth topped expectations — with payrolls increasing by 275,000 vs. expectations of growing 198,000 — but the unemployment rate rose to 3.9%. Growth from the previous two months was also revised lower, not nearly as hot as initially reported. Wages flat.
2. Costco was good to go: The retailer reported solid quarterly results after Thursday's closing bell, despite a slight miss on sales and margins. Investors just wanted legendary and long-serving CFO Rich Galanti to increase the membership fee before he retires next week. That elusive free increase catalyst has to wait. Just looking at the numbers, there was nothing that altered our bullish view of the stock.
3. Chipmaker Broadcom was getting shelled Thursday until management said it expects AI revenues to be 35% of total semiconductor sales in fiscal 2024, translating to more than $10 billion, compared with its prior expectation of 25%. Broadcom reported better-than-expected results but didn't increase its guidance. The server and phone parts of the business haven't come back. That's OK. Investors are focused mostly on AI, and for good reason: Broadcom is seen as the biggest beneficiary of growing adoption AI adoption after fellow Club holding Nvidia.
4. The turnaround at Gap is for real, I saw it with my own two eyes during my interview with CEO Richard Dickson. The retailer's stock jumped 8% after earnings came in well above Wall Street's estimates. The Old Navy returned to growth for the first time in more than a year. Fashion designer Zac Posen is all in. Barclays, Evercore ISI, TD Cowen, BofA, and Baird all raise their price targets.
5. Much-loved enterprise software MongoDB lowered its forecast for the first quarter and full year, but beat fourth-quarter expectations. But let's see how much that matters. Davidson upgraded MDB to buy from hold. Other research firms, including Barclays and Mizuho, lowered their price targets.
6. Eli Lilly shares fell 1% in the premarket after the U.S. Food and Drug Administration delayed approval of its Alzheimer's drug donanemab. Big surprise. The drug was expected to get approval this month. I expect it to be down hard on this.
7. Marvell Technology again with magnificent AI business, but shares are down 6% after the chipmaker posted softer revenue guidance for the first quarter. Still, many PT increases because Marvell is part of the optical connection to Nvidia. It reminds me of Cadence, Arm Holdings, and Advanced Micro Devices, the latter getting love as a mini-NVDA from analyst Ben Reitzes at Melius Research.
8. Burlington Stores is getting so much love from the Street, replacing Ross Stores as the discount retailer that people want to push along with the dollar stores. Price target raises from Morgan Stanley, Loop Capital, BofA, and Baird.
9. DocuSign got its groove back, beating expectations and dishing out positive first-quarter guidance. Efficiency and revenue acceleration. Did Hellman & Friedman and Bain miss this one? The company could get more upgrades.
10. Wow: JPM upgrades General Electric to buy from hold. It is now the premium large-cap name in aerospace. What a turn ...
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