Markets closed mostly lower yesterday, with NFLX being partly to blame. The S&P closed down .06% while the Nasdaq fell over 1%. Asia stocks closed mostly lower overnight while Europe indexes are in the green this morning. U.S. futures are pointing to a higher open, the Dollar and Oil are higher while Yields and Gold are lower.
And here is my morning rant from yesterday: JB Pre-market rant – April 20th, 2022
And here is my afternoon rant from yesterday: JB End of Day Rant – April 21st, 2022
It was a rough day for most stocks as Netflix earnings gave folks an excuse to take profits, with names that offer subscriptions like SPOT and Disney falling in sympathy to Netflix. On the flip side, IBM earnings provided a boost to the Dow which closed in the green. The S&P is gapping higher this morning with TSLA earnings helping to pad gains. We were higher yesterday at the open as well, so hoping this holds this time around. I actually prefer red opens where we bounce into the green. The SPY closed back under the 200dma yesterday but is gapping above that level this morning. Would want to see that $446 handle hold into the close which will set up nicely into tomorrow:
IBM opened at $135 yesterday, tested the $133s soon after, before soaring. It neared the $140 handle before closing at $138.32. I was able to close some calls out for 300% and 500% gains on the move and held the rest. I think IBM can test $145 in the coming weeks so may hold the rest for that possible move and will use the $136 handle as a spot I may take the rest of my profits off the table and re-visit:
ISRG broke into the $300s yesterday, hitting $307.37 before pulling back to close at $302.90. I used the move to close some more of my calls for 400%. They report earnings after the close today. Think any decent beat and raise and the stock is into the $320+ level. Will likely hold the last of my calls, though there is risk the company misses and the stock falls back under $300 - though I think that is an unlikely scenario:
I really love ROKU here. Still holding freebies $125 calls and may actually look to add some May strikes into their earnings which will be next week. The company has $2bil in cash, minimal debt, and is still growing top-line over 25%. Also, last quarters margin miss should be an outlier and margins should start to improve. ROKU did $2.7 bil in revenue at 49% margins last year and should be a beneficiary of the competitive environment with streaming services. If you use the ROKU platform that means you stream... ie. NFLX and other streaming services have a targeted base of users on the ROKU platform so would make sense that ad spend will increase. Calls are pricey and there is risk that it may take a few Q's for names like ROKU to get back on track even with strong earnings given the current market environment, but I may take a stab at some May strikes today or tomorrow:
CAR came on my radar yesterday. Not a name I normally look at... ie. Car rental companies, but could be a name that squeezes(as it has done in the past).:
Again, joking aside. Barclays upgraded the stock to equal-weight this morning from underweight and took their PT to $245 from $164 or nearly $95 below current price.
This upgrade seems to have stirred the shorts again to cover IMHO
… or maybe it is nothing https://t.co/aQuOnhERGR
— Option Millionaires (@OMillionaires) April 20, 2022
Obviously risky but maybe someone is caught with their pants down again. Calls are pricey but may nibble some speculative strikes today for a move into the $350+ area:
POOL reported monster earnings this morning while raising guidance. Could see this trading above $450 today and maybe $470 in the coming days. May look to nibble some calls if I can find a decent risk/reward strike:
BPT divy was paid out yesterday and the stock bounced back into the $16s. My June $20s are still solidly green and hoping to get an opportunity to close some out for 100% to cover costs and ride the rest for there move over $20:
Still holding the last of my BIIB calls. It consolidated yesterday, If it holds $220 think the $230s come tomorrow, otherwise will close the last of my calls out.
Still eyeing ULTA, BURL, POOL, and CUTR as well.
Here are the analyst changes of note for today:
| Kornit Digital price target lowered to $155 from $202 at Needham | |
| Needham analyst James Ricchiuti lowered the firm's price target on Kornit Digital to $155 from $202 after its Q1 earnings miss and reflecting the compression in growth stocks amid rising interest rates. The analyst keeps a Buy rating on the shares however and contends that the company's business remains healthy, notwithstanding increased macro uncertainty, also anticipating strong tailwinds in its business in 2022 and 2023 thanks to the positive momentum with its largest customers, the growing near-shoring trend, and the emphasis on sustainability by apparel makers | |
| Carvana price target lowered to $160 from $230 at Truist | |
| Truist analyst Naved Khan lowered the firm's price target on Carvana to $160 from $230 but keeps a Buy rating on the shares. The company's Q1 results and lowered quantitative outlook for the rest of the year suggest "persistent pressure" on Carvana's units and profitability amid multiple headwinds that include COVID, weather, and credit spread fluctuations, the analyst tells investors in a research note. Khan contends however that these headwinds are transitory, with cost initiatives helping operating expenditure and forecasting Carvana to continue to gain share with its "disruptive offering | |
| Tesla guidance comments sound 'more bullish' than last quarter, says Jefferies | |
| Jefferies analyst Philippe Houchois said Tesla's Q1 results beat on "all critical KPIs," or key performance indicators, including gross auto margin, ex-credits, reaching 30% for the first time. The key highlight, in his view, was cost of goods sold per unit being down despite raw materials and logistics inflation, said Houchois, who adds that the company's guidance comments sounded "more bullish" than last quarter. Houchois has a Buy rating and $1,250 price target on Tesla shares | |
| Carvana capital raise 'potentially changes everything,' says Morgan Stanley | |
| Morgan Stanley analyst Adam Jonas noted that Carvana significantly missed Q1 expectations and pushed out EBITDA break-even, while also announcing that it will be raising up to $4.275B of capital in both shares and debt. The size of the combined capital raising is larger than he had anticipated, but this event was a moment both bears and bulls were waiting for and one that "potentially changes everything," Jonas tells investors. While dilutive today, the capital raise helps provide the needed liquidity to grow the business and to alleviate concerns over the company's staying power as an auto retail/fulfillment partner, said Jonas, who has an Overweight rating and $360 price target on Carvana shares | |
| Anthem price target raised to $610 from $590 at Truist | |
| Truist analyst David MacDonald raised the firm's price target on Anthem to $610 from $590 and keeps a Buy rating on the shares. The company's Q1 results were "strong across the board" as robust membership and a "meaningfully better" medical loss ratio helped drive top and bottom-line beats, the analyst tells investors in a research note. Anthem's membership was strong in all key segments and its cash flow remains robust, MacDonald adds | |
| Alcoa cut to Neutral at Citi as commodity team steps off 'aluminum bull train' | |
| Citi analyst Alexander Hacking downgraded Alcoa to Neutral from Buy with an unchanged price target of $84 following the firm's global commodity team, who are "stepping off the aluminum bull train." Aluminum, and by extension Alcoa, remains one of his best long-term ideas in metals, but the near-term risk reward is more balanced and Alcoa seems fairly valued following a 1000% two year rally in the stock and a 50% advance year-to-date, while Chinese smelter restarts and softer demand could put a near-term cap on the price, Hacking tells investors | |
| Electronic Arts price target lowered to $155 from $165 at Stifel | |
| Stifel analyst Drew Crum lowered the firm's price target on Electronic Arts to $155 from $165 and keeps a Buy rating on the shares ahead of the company's fiscal Q4 report due on May 10, noting that he is forecasting an in-line quarter. FY23 guidance is expected and he would expect management to start the year with a more modest outlook, as reflected in his own updated and slightly lower estimate for FY23, but he assumes an uptick in growth for FY24, Crum tells investors | |
| Overstock.com price target lowered to $152 from $161 at DA Davidson | |
| DA Davidson analyst Tom Forte lowered the firm's price target on Overstock.com to $152 from $161 but keeps a Buy rating on the shares. The analyst is updating his sum-of-the-parts valuation model on the stock, lowering the per-share estimate on its namesake retail business to $124 from $131 amid soft growth in the home category as reflected in U.S. retail sales data and the potential for further weakness on home-related items in a rising interest rate environment | |
And here is what I am watching today: POOL, ROKU, CAR, ULTA, BURL, POOL, ALGN and CUTR.
Let's have a great day!
-JB