Markets closed down for the third session in a row on Tuesday, with the S&P reversing sizable morning gains to finish the day down .30% and it is now down over 2% on the week. Asia stocks closed mixed overnight while Europe indexes are in the red this morning. U.S. futures are pointing to a flat open as I write this, the Dollar, Oil, and Gold are higher while Yields are lower.
Here is my rant from yesterday if you missed it: https://www.optionmillionaires.com/jb-afternoon-rant-april-13th-2022/
And this is what UPB is reading this morning; https://www.optionmillionaires.com/wednesday-reads-2/
It was another frustrating session yesterday with momentum names gapping higher at the open, continuing the rally after the bell, only to see those gains evaporate into the end of the day. It is tough to have any conviction on the call side, but at the same time, playing puts is just as frustrating with these morning gaps and bounces. The SPY broke that $440 handle in the afternoon. If it finds more weakness today would want to see that $334 lower Bollinger band hold or I think $425 comes quick:
Earnings season kicked off this morning with the banks. JPM was the one that is garnering the most attention. The company posted a miss in mostly all their metrics, but did announced a $30 billion stock buy back, which is pretty much 10% of their market cap. The stock is gapping lower this morning. Its report does not portend good things for this Q1 season but have to think some of that is expected.
BLK, on the other hand, reported a decent Q though they missed on the revenue side. Comments from the CEO also seem bullish. Could be a nice bounce play today so may look at some calls at the open for a move to $740 or so:
BPT recouped some of Monday's losses yesterday, closing up nearly 3% despite the market weakness. Tomorrow is ex-divy day and the stock will open up $1.08 lower... this is already baked into the option prices. I was hoping for some FOMO into tomorrow so I could lock some of my calls in the cover costs. Will be watching again today for an opportunity to at least take some of my calls off to cover some costs, though do think this rallies into the $20s in the coming week or two:
VRTX received a $67 PT upgrade this morning from UBS, who took their target to $325. The stock has been on a slow-meticulous run since December. Hate chasing but may look to add some weekly strikes for a move above that upper Bollinger band at $284:
Was eyeing CMG calls at the open yesterday. The stock gapped higher right out of the gate and the calls were unplayable.. ie. expensive with wide spreads. Still think this can head over $1600 so will be eyeing calls again this morning:
Also still eyeing AVAV for some possible spec calls into tomorrow.
Here are the analyst changes of note for today:
|Vertex Pharmaceuticals price target raised to $325 from $258 at UBS|
|UBS analyst Colin Bristow raised the firm's price target on Vertex Pharmaceuticals to $325 from $258 and keeps a Buy rating on the shares. The analyst cites the company's latest data from its NaV1.8 inhibitor VX-548 demonstrating clinical effectiveness at the highest dose in two acute pain populations, adding the program to his valuation model while "conservatively" estimating peak risk-adjusted sales for the drug at $1B|
|KKR price target raised to $81 from $76 at Oppenheimer|
|Oppenheimer analyst Chris Kotowski raised the firm's price target on KKR to $81 from $76 and keeps an Outperform rating on the shares. While macro concerns and the fear that rising rates will somehow hurt the Alternative Asset Manager group have weighed on the stocks, this is a theme he has "discussed and rejected on many occasions" and he would lean against these fears as the adverse impacts of market turmoil seem transitory, but "the upside from deploying ample available dry powder in a dislocated market can produce benefits in performance and fundraising for years to come," Kotowski tells investor|
|Thor Industries initiated with a Neutral at DA Davidson|
|DA Davidson analyst Brandon Rolle initiated coverage of Thor Industries with a Neutral rating and $78 price target. The analyst states that he is cautious on the name due to concerns surrounding margin deterioration, decelerating retail trends, and the company's ability to maintain market share. Thor Industries was the biggest COVID beneficiary in the RV sector amid a surge of new buyer interest in the entry-level travel trailer segment, but as the RV industry returns to pre-COVID trends, it will be difficult for the company to maintain margins, Rolle tells investors in a research note|
|New Street upgrades Nvidia to Buy on improved crypto risk visibility|
|As previously reported, New Street analyst Pierre Ferragu upgraded Nvidia to Buy from Neutral with a price target of $280, citing what he sees as an attractive valuation, greater visibility on the "crypto-winter risk" and the company's strong datacenter outlook. Ethereum's hash rate quadrupled between October of 2020 and January of 2022, which likely boosted Nvidia's FY22 gaming revenues by about $2B, but with the hash rate having plateaued, mining demand has "largely gone away" and GPU retail and second-hand prices have started to normalize as a result, Ferragu tells investors. Nvidia's relative multiple contracted by 30% with the crypto correction and a further 20% as the datacenter outlook weakened in 2018-19 and the stock's relative multiple is down 25% since November, leaving "little further downside, as long as datacenter remains strong," Ferragu added. In total, he no longer sees crypto as a reason not to own the stock and argues that any weakness driven by crypto would be "limited, short-lived, and only an opportunity to add to positions" given that the secular outlook for gaming, visualization, and datacenter is "still very strong.|
|Dave & Buster's deal for Main Event 'very positive' for growth, says Jefferies|
|Dave & Buster's announcement last week of a deal to acquire competitor Main Event, which has complementary assets in a similar restaurant/entertainment complex, but with more focus on families with kids, should be "very positive" for growth and EBITDA/EPS "without significantly burdening the balance sheet," said Jefferies analyst Andy Barish. The analyst, who views the roughly 13% pullback in Dave & Buster's since the Mar 29 earnings call as presenting an attractive opportunity, keeps a Buy rating and $60 price target on D&B shares|
And here is what I am watching today: BLK, AVAV, EDIT, VRTX, WOW, REGN, POOL, SITE, SPOT, TWLO and MDB.
Let's have a great day!