Markets fell on Monday, with the S&P losing .75% while the Nasdaq fell over 1%. Asia markets soared overnight and Europe indexes are rallying this morning with the DAX up over 1.5%. U.S. futures are pointing to a higher open, the Dollar and Yields are lower while Oil and Gold are higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-131/
Stocks closed lower on Monday and traded in a relatively tight range for the session, giving back some of the gains from Friday. This morning futures are rallying and the SPY is gapping over that $390 handle. Some of the catalyst can be attributed to more solid earnings reports, like PFE's huge beat:
Another catalyst could be the news that $JNJ is buying $ABMD (one of my favorite Med-tech stocks over the years) for $16.6 billion, a 50% premium. Either way, some more strong earnings reports this week coupled with a Fed that may tone down their hawkish tone, and think the 200dma is coming quick on the SPY:
As I just mentioned, $JNJ is buying $ABMD for a huge premium. I was actually looking at ABMD at the start of last week but the spreads on the calls are just insane unless you go for in-the-money strikes. Low liquidity on the options + large spreads means it will be hard to enter and even harder to exit - typically a recipe for losing money. I do think there will be some opportunities to play other names in the med-tech space in sympathy with the buyout, as the move should put a higher valuation on names like ISRG or even AXNX.
ISRG is on fire lately, closing higher 11 sessions in a row and is up 34% over that time frame. Despite the move I think the buyout news this morning will keep it well bid and it can come and test the $260s or so in the coming days. Will be looking for some calls:
AXNX is another name I will be watching. The company reported a strong beat and raise yesterday yet it is trading lower in the pre-market. It is receiving upgrades this morning. Could be a nice bounce candidate here for a move to $80+ in the coming weeks:
I mentioned on yesterday's watchlist about SHAK and the performance in causal dining. Take a look at the chart:
SHAK closed slight in the red yesterday but above the 200dma. If it holds that today will look for some calls into earnings tomorrow, though there is risk that any miss and the stock can open flat or down killing the premiums:
And lastly, ZYME has embarked on a strong 4 day rally where it has risen 29.9% and my calls are back in the green. If it can break and hold that $7.75 handle, it has blue-skies into the $9.50 level and beyond:
Still eyeing insurers... ie. HUM, and CI. And watching SPOT, TWLO, U, and ROKU as well.
Here are the analyst changes of note for today:
| Boston Properties price target lowered to $85 from $96 at Truist |
| Truist analyst Michael Lewis lowered the firm's price target on Boston Properties to $85 from $96 and keeps a Hold rating on the shares. The analyst is citing the increase in interest rates as he lowers his FY23 FFO view to $7.37 from $7.92, adding that his interest expense projection for Boston Properties is still slightly lower than its management is forecasting. Lewis further states that he is also a little more optimistic in regards to 2023 occupancy, which makes his 2023 FFO estimate slightly higher that the midpoint of the REIT's outlook |
Axonics price target raised to $90 from $80 at Truist |
| Truist analyst David Rescott raised the firm's price target on Axonics to $90 from $80 and keeps a Buy rating on the shares. The analyst cites the company's "impressive" revenue beat as it captured market share, saw Bulkamid upside, and delivered another positive adjusted EBITDA. Rescott adds that the stock was down afterhours on "sell the news", but he would buy any pullbacks as Axonics fundamentals remain strong |
| Alibaba price target lowered to $125 from $135 at Truist |
| Truist analyst Youssef Squali lowered the firm's price target on Alibaba to $125 from $135 and keeps a Buy rating on the shares. The company is expected to return to positive growth in Q2 of 2023 amid persistent macro challenges, even as its management continues to navigate the challenging Chinese macro backdrop, the analyst tells investors in a research note. China retail sales data shows improving trends from July onward, and even though Alibaba over-indexes to verticals under pressure, growth should accelerate further in the second half of FY23, Squali adds |
| CMS Medicare HH regulations positive for Amedisys, Pennant, says Oppenheimer |
| Oppenheimer analyst Michael Wiederhorn notes that CMS finalized the 2023 Medicare Home Health regulations, increasing rates by 0.7%, versus 4.2% net reduction in the proposed rule and 0.0% assumed in his estimates. The improvement reflects a stronger market basket and -3.5% reflecting a phase-in of the budget neutrality adjustment. Despite the improvements, providers could still seek a widely supported three-year delay in the adjustment from Congress, Wiederhorn contends. Regardless, he expects large-scale players to outperform in a challenging environment, while industry valuations remain attractive. Given that the improved rates are a good floor on 2023 reimbursement, the analyst believes this is positive for Amedisys (AMED)/Pennant Group (PNTG) and would be a long-term buye |
| Varonis price target lowered to $35 from $53 at Cowen |
| Cowen analyst Shaul Eyal lowered the firm's price target on Varonis to $35 from $53 and keeps an Outperform rating on the shares. The analyst said the issues impacting guidance are EMEA weakness, Federal s deal scrutiny, and FX headwinds. he said the introduction of its SaaS offering while a long-term positive, could pressure revenue near-term |
| Carvana price target lowered to $60 from $95 at Cowen |
| Cowen analyst John Blackledge lowered the firm's price target on Carvana to $60 from $95 and keeps an Outperform rating on the shares. The analyst said they continue to face worsening industry headwinds as vehicle prices and interest rates remain elevated |
| Axonics price target raised to $90 from $83 at Wells Fargo |
| Wells Fargo analyst Larry Biegelsen raised the firm's price target on Axonics to $90 from $83 and keeps an Overweight rating on the shares. The analyst notes the company reported Q3 results that beat consensus by 11% and raised its 2022 revenue guidance from +40% year-over-year to +45% year-over-year. 2022 revenue guidance was raised slightly above the amount of the Q3 beat, which Biegelsen believes builds in conservatism into Q4 |
| Arista Networks price target raised to $203 from $163 at Cowen |
| Cowen analyst Paul Silverstein raised the firm's price target on Arista Networks to $203 from $163 and keeps an Outperform rating on the shares. The analyst said strong visibility and confidence re demand trends reinforces the view of significant upside to investor expectations. He noted revenue and EPS continue to track well ahead of investor expectations despite adverse impact of supply constraints |
And here is what I am watching today: ISRG, AXNX, U, HUM, CI, SHAK, PZZA, WING, SPOT, TWLO, ROKU, and CMG.
Let's have a great day!
-JB