It was a rough day for stocks on Thursday, with the S&P tumbling .90% while the Nasdaq dropped 2.5%, reversing the gains from Wednesday as folks digested the policy changes from the Fed along with some hawkish moves from the UK and EU. Asia markets fell overnight while Europe stocks are lower this morning. U.S. futures are pointing to a lower open, the Dollar and Gold are higher while Oil and Gold are lower.
And this is what UPB is reading this morning: Friday Morning Reads
It seemed markets had welcomed the news that the Fed was set to raise rates at least 3 times in 2022 while completing the taper at a faster pace on Wednesday - all hawkish commentary in the face of inflation that has been on the minds of many. Stocks rallied after the update from the Fed. Then yesterday morning the UK announced they will be raising rates in a surprise move, while the ECB announced they would be scaling back asset purchase programs. Markets reversed course on Thursday with Tech names taking it on the chin once again. This annoying premium chop continues and will be interesting to see if we can get a bounce off the lows this morning. There has been so much carnage happening underneath a market that has been hitting all-time highs. So many names are down over 50%+... this feels like 2018.
I have been waiting patiently to play bounces on some of those names. DKNG was the most recent, as the stock looked set to break into the $30s. Once it reversed the gap yesterday, and tested $28, I went and closed my December calls for a small loss. It is definitely a name I will be watching for some calls in the coming days for the eventual bounce, likely if it can find a bid over $27.50:
TNDM was mostly rangebound yesterday, until it succumbed to the market pressure at 2pm. My speculative calls expire today so may look to add some later dated strikes for the eventual move into the $150s and $160s:
If the selling continues today in the tech space, may look at some spec puts on some of the stronger names like PANW, NOW, GOOGL, MDB, TEAM, LRCX, ZS, and even NFLX.
Look at NOW yesterday, down over 5%. Maybe a move to $580 or so today on weakness:
LRCX for possible pull to $650 or so - the lottos worked last week:
And even ZS for a move under $280:
Just an FYI, markets are closed next Friday for Christmas. There is no market closure for New Years this year. Normally markets are open for a half-day for xmas evea nd closed for New Years, not this year with holidays falling on the weekend.
Here are the analyst changes of note for today:
| Criteo's Iponweb deal 'looks attractive financially,' says Macquarie | |
| Criteo announced last week it is in exclusive discussions to acquire Iponweb for $380M, Macquarie analyst Tim Nollen said the potential acquisition "looks attractive financially" given what he sees as "some intriguing operational synergies." The analyst, who said he thinks of Iponweb as "the tech behind ad tech, views this as "a smart acquisition if Criteo can make it work," though he adds that he doesn't know to what extent Criteo will be able to expand its take rate and thinks it will be important to execute with transparency to manage any conflicts. Nollen has an Outperform rating and $55 price target on Criteo shares | |
| 1Life Healthcare resumed with an Overweight at Morgan Stanley | |
| Yesterday, Morgan Stanley analyst Ricky Goldwasser resumed coverage of 1Life Healthcare with an Overweight rating and $24 price target. Since the Iora deal was announced in June, shares have lost 53% of their value to reflect the new exposure to risk-bearing revenues and questions on the company's base business and apparent strategic pivot. However, Goldwasser thinks the "pendulum of investor sentiment has swung too far from bullish earlier in the year to bearish," as she believes investors are overlooking the enhanced value creation opportunity, including scale and health systems relationships | |
| Appian price target lowered to $100 from $116 at Truist | |
| Truist analyst Joe Meares lowered the firm's price target on Appian to $100 from $116 but keeps a Buy rating on the shares. The analyst states that he remains confident in the company's ability to monetize the digital transformation megatrend with its differentiated low-code development platform, and also believes that these factors can drive sustained cloud sub revenue growth in the 30%-plus range. Meares adds however that his reduced price target reflects compressed valuation multiples among the stock's peers | |
| Jazz Pharmaceuticals price target lowered to $215 from $220 at Needham | |
| Needham analyst Ami Fadia lowered the firm's price target on Jazz Pharmaceuticals to $215 from $220 but keeps a Buy rating on the shares. The analyst states that following her expert call on Epidiolex earlier this week, she sees its growth rate as likely to continue to slow down relative to past years, even though she continues to see growth potential for the drug. Fadia adds that she is reducing Epidiolex growth expectations from 25% to 18% for 2022 and from 15% to 11% for 2023 | |
| Adobe price target lowered to $652 from $736 at Morgan Stanley | |
| Morgan Stanley analyst Keith Weiss lowered the firm's price target on Adobe to $652 from $736 and keeps an Overweight rating on the shares. The Digital Media segment's performance in the second half of the fiscal year disappointed investors with a 3% beat in Q3 and "modest miss" in Q4, said Weiss, who sees this dynamic leading to caution on the conservatism baked into the FY22 outlook. However, he sees the shares as likely to find support given the company's "rock solid franchise" and an EPS-based valuation "amid a volatile software tape," Weiss tells investors | |
| FedEx price target raised to $312 from $305 at JPMorgan | |
| JPMorgan analyst Brian Ossenbeck raised the firm's price target on FedEx to $312 from $305 and keeps an Overweight rating on the shares following last night's "beat and raise" quarter. FedEx is getting ahead of labor availability issues which will help grow volumes faster than expected, Ossenbeck tells investors in a research note. Further, the accelerated share repurchase, new buyback authorization, and two-day investor event in June 2022 "were all a welcome surprise," says the analyst | |
And here is what I am watching today Calls: SPOT, IQV, BURL, TREE, FUBO, RDFN, Z, TWLO. | Puts: PANW, NOW, GOOGL, MDB, TEAM, LRCX, ZS, and NFLX
Let's have a great day!
-JB