Futures are pointing to a lower start to the week, resuming the sell-off we saw on Friday, with S&P futures down 1.2% as I write this. Asia markets closed mostly lower overnight while Europe indexes are solidly in the red. The US dollar, Yields, and Oil, are higher while Gold is lower.
Markets are setting up to give back more gains this morning from the rally that started in mid-July. There is no true catalyst to speak of outside of nervousness ahead of Powells speech at Jackson Hole at 10am Friday. Most of the market headlines this weekend wrapped around the recent market bounce off the lows and whether it was the start of a new bull market move or just a bear market relief bounce. Like I have been saying for the past few months, I prefer to play calls for the bounces than playing puts for the pullback. Outside of any black swan event, I do think markets won't breach that bottom anytime soon and there can even be a constructive chop before a possible next leg higher. Would have preferred to see the $420 handle hold into today. If markets can't find a bid above that level in the next few sessions, worry that the $410 level comes back in play. Not going to be doing much in the way of adding anything until we get back above $420... or if we test $410 and hold:
ICPT rallied hard after the open on Friday, breaking into the $21s before finding sellers and/or shorts to completely reverse course and close down nearly 10%. I locked some of my Sept calls in for 100% to cover costs - sure enough 10 minutes later they were up 200%. Will look to hold the rest for the move back into the $20s and may actually look for some later dated strikes. The stock also receive two positive analyst notes this morning:
| Intercept's 'transformational' moves being underappreciated, says B. Riley |
| B. Riley analyst Mayank Mamtani lowered the firm's price target on Intercept Pharmaceuticals to $28 from $30 and keeps a Buy rating on the shares. The company announced entering into privately negotiated agreements to repurchase $327.9M of its secured convertible debt, 2026 notes with 3.5% coupon, using a combination of cash and equity, Mamtani tells investors in a research note. This comes in follow-up to a number of recent strategic choices focused to directly address a "significant balance sheet overhang," says the analyst. He believes the "transformational impact" of 2021 and 2022 debt repurchases, coupled with recent Advanz business monetization in Europe remains relatively underappreciated by the Street. |
Still plenty of earnings this week, with names like SNOW, NVDA, CRM, AFRM, WDAY, and ULTA reporting:
I added the ULTA calls last week and was looking for some premium build before they report Thursday after the close. So far that has not panned out but still hopeful. The stock is gapping lower in the pre-market. Will likely hold the calls with a stop around $390:
I know PTON is a name many despise these days but do think it may offer a surprise report and the stock could find some buyers. It was only a few months ago that folks thought AAPL or AMZN would be buyers in the $30s. PTON reports before the open on Thursday so may use the recent pull to add some speculative calls for a potential move past $15. :
SCVL is another name I will be watching. They report Thursday before the open and have been executing at a high level. FL earnings should bode well for the name. Think any decent report and the stock is $32+. Will be eyeing some calls:
I exited the last of my TRIP calls Friday and will be watching for another entry - especially if it can hold the $25s:
AMLX continues to chop around ahead of its AdCom in September. Will continue to hold my calls.
Still like SAGE, YOU, and SPOT here and may nibble on some calls if the SPY finds any footing today.
Here are the analyst changes of note for today:
| Deere price target raised to $439 from $416 at Evercore ISI |
| Evercore ISI analyst David Raso raised the firm's price target on Deere to $439 from $416 and keeps an Outperform rating on the shares following Friday's Q3 report. Deere remains one of the analyst's "Top 5 Favorites," Raso tells investors in a research note. The analyst raised his EPS estimate for FY23 to $28.33 from $26.31 and for 2024 to $31.70 from $28.28 |
| Workday checks show elongated sales cycles, says BofA |
| BofA analyst Brad Sills lowered the firm's price target on Workday to $200 from $210 and keeps a Buy rating on the shares. Channel checks suggest heightened macro pressure and elongated sales cycles, Sills tells investors in a research note. Q2 activity tracked overall in line to below expectations, a "notable tone shift" from Q1 channel checks, says the analyst. He points out that many partners noted a slowdown in growth in Q2. Sills sees potential downside to his 20% 24 month backlog estimate |
| Wag Labs price target lowered to $11 from $12.50 at DA Davidson |
| DA Davidson analyst Tom White lowered the firm's price target on Wag Labs to $11 from $12.50 but keeps a Buy rating on the shares. The analyst is positive on the company's "stronger than expected" Q2 results and generally stable core services marketplace take-rate, though his price target cut reflects the recent ongoing multiple compression for unprofitable tech growth stocks, White tells investors in a research note |
| Deere's Q3 more challenging than expected but demand strong, says DA Davidson |
| DA Davidson analyst Michael Shlisky keeps his Buy rating and $445 price target on Deere after its Q3 results. While the quarter was more challenging than expected due to supply chain issues, demand for Large Ag machinery appears "very strong" across all major markets, with strong bookings also seen persisting into FY23, the analyst tells investors in a research note. Deere's cash-flow guidance for FY22 was reduced, but the chances of a very strong FY23 making up the shortfall are "high", Shlisky adds |
| Intercept's 'transformational' moves being underappreciated, says B. Riley |
| B. Riley analyst Mayank Mamtani lowered the firm's price target on Intercept Pharmaceuticals to $28 from $30 and keeps a Buy rating on the shares. The company announced entering into privately negotiated agreements to repurchase $327.9M of its secured convertible debt, 2026 notes with 3.5% coupon, using a combination of cash and equity, Mamtani tells investors in a research note. This comes in follow-up to a number of recent strategic choices focused to directly address a "significant balance sheet overhang," says the analyst. He believes the "transformational impact" of 2021 and 2022 debt repurchases, coupled with recent Advanz business monetization in Europe remains relatively underappreciated by the Street |
| Peloton price target lowered to $13 from $15 at Truist |
| Truist analyst Youssef Squali lowered the firm's price target on Peloton to $13 from $15 and keeps a Hold rating on the shares ahead of its Q4 results this week. The company's FY23 guidance is expected to be uninspiring, reflecting the ongoing challenges to turn around its business, the analyst tells investors in a research note. Squali adds that while he sees some positive signs emerging around progress on stabilizing cash flow and supply chain along with new product initiatives, he does not expect profitable growth to return for Peloton until the second half of next year. |
Deere price target raised to $415 from $365 at Oppenheimer |
| Oppenheimer analyst Kristen Owen raised the firm's price target on Deere to $415 from $365 following quarterly results and to reflect her updated estimates and moderate multiple recovery. The analyst notes that the top-line beat demonstrated Deere's execution in ramping production, while bottom-line miss and narrowed net income guidance reflected persistent cost inflation. Execution remains at the fore, but she sees sustained production rates, strong pricing, and improved raw material cost inflation establishing a favorable backdrop coming into 2023. Owen keeps an Outperform rating on the shares |
And here is what I am watching today: SCVL, PTON, TRIP, SAGE, YOU, SPOT, ICPT, and BIIB.
Let's have a great day!
-JB