My top 10 things to watch Friday, April 19
1. Procter & Gamble: Wow. The consumer goods company reported a slight miss on sales for the first quarter — $20.2 billion vs. $20.41 expected — but beat on EPS with $1.52 vs. $1.41. For the full year, management now expects core EPS growth of 10% to 11%. Costs have fallen, the U.S. consumer is strong, Europe is strong, China is getting better, the grooming segment is improving, and the beauty business is very strong. Shares were little changed in the premarket. We will send out a full earnings analysis for this Club holding after management's call with analysts and investors this morning.
2. Netflix had a great quarter on Thursday but said it will no longer report quarterly membership numbers and average revenue per membership starting in the first quarter of 2025 — a change that has some investors and analysts worried, pushing shares down 6%. I want to give the video streaming company the benefit of the doubt.
3. Johnson & Johnson got a big win in talc litigation: A Florida jury on Thursday said the drugmaker's baby powder product did not cause the ovarian cancer of a woman who died in 2019, Reuters reported. JNJ on Tuesday beat first-quarter profit estimates and reported in-line revenue.
4. IFF upgraded to hold from sell at Barclays. The analyst sees very little room for downside in IFF shares, noting that the company's sales and earnings targets look achievable for the first time in years.
5. Baird cut its price target for Lululemon shares to $505 from $555 after meeting with the athletic apparel company's management team. The tone was constructive. Valuation will likely remain under pressure, but the analysts said the current pullback is a buying opportunity for a high-quality name with lots of global growth ahead.
6. Morgan Stanley's price target raised two bucks to $102 at HSBC, which cited higher wealth management and investment banking earnings. The Club holding delivered a much-needed rebound quarter, with beats on the top and bottom lines, including record revenue for the wealth management segment.
7. Deutsche Bank raised its price target on UnitedHealth to $562 from $545. The company reported better-than-expected sales for the first quarter earlier this week, despite the impact of a cyberattack on its subsidiary Change Healthcare. The hack will only cost 2%, which is incredible given how bad it was. The hack was handled well by Palo Alto Networks, one of our portfolio names.
8. Baird does not like Columbia Sportswear, citing its inventory overhang and wholesale challenges among other risks. The company maintains its neutral rating and $70 price target.
9. Dell pullback: Buy it. UBS raised its price target to $141 from $113 and said it expects 50% AI server unit growth in 2024, in cooperation with the hyperscalers. One of the few real ways to play AI.
10. PPG Industries price target cut to $150 from $156 at UBS — one of few PT cuts this quarter. Not sure of the read-through to Club name Stanley Black & Decker. PPG, the materials supplier this week reported adjusted earnings of $1.86 per share, which matched expectations, but revenue of $4.31 billion came in below an estimate of $4.43 billion.
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