It as another wacky day for markets, with the GME rocket ship adding fuel to other high short interest names, while the underlying market closed slightly in the red. Asia markets closed mixed overnight while Europe stocks are falling this morning with the DAX down over 1.5% as I write this. U.S. futures are pointing to a rough start to the day with the S&P set to open 1% lower. The Dollar is higher while Yields, Oil, and Gold are all lower.
And this is what UPB is reading this morning: Wednesday Morning Reads
And a nice read here from UPB: An Inverted Blow Up
It was another crazy day for GME and other highly shorted names on Tuesday and looks like it will continue again today, though the market is under some pressure. GME tested $365 in the pre-market on the heels of Elon Musk tweeting GameStonk! last night. As much as the talking heads and pundits want to say this GME wreaks and should be investigated, it is at the price folks are willing to pay for it. Should all those who come out with short pieces after they already added puts, then tout a 50% haircut in a stocks price on CNBC or some other outlet,, and sell for a huge profit be investigated as well? Would be a little different if folks were working together on wash sales to create volume...ect. but if it is just folks buying and selling I think it is hard pressed for the SEC to find wrong doing. The worry here is if folks start questioning the market as a pricing mechanism... ect. Hopefully this GME run is somewhat of an outlier, the big shorts learn their lesson, and we can move on to a more rational market. Enough of my quick rant...
I added some OTRK calls as the stock resumed its rally from Monday. It is an under-the-radar name in the tele-health space and should continue to benefit from Covid-19. It also sports a 47% short interest - there are folks who think it is a fraud. I was locked some of my calls in for over 100% and will likely hold the rest as long as it holds $88 or so:
EHTH closed up another 2% on Tuesday. That $88 level is key and could see a bigger breakout about that. Will continue to hold the rest of my calls pending any large sell-off with the market today under $80:
We have the the first Fed statement of 2021 today at 2pm with a 2:30pm Press conference. There are also some huge earnings after the close led by AAPL, TSLA, and FB. Will likely sit on my hands for those reports.
At some point we will have a cloud/SaaS greed reset. Will be watching the VIX today for any confirmation. If the SPY can't hold $380 today I may nibble in some speculative OTM lotto puts in some names like : TEAM, OKTA, TTD, and TWLO.
Also watching MED, AXNX, NTR, FROG, TNDM, REGN, EVBG, BYND, and WB.
Here are the analyst changes of note for today:
| Polaris price target raised to $134 from $126 at Wedbush | |
| Wedbush analyst James Hardiman raised the firm's price target on Polaris to $134 from $126 and keeps an Outperform rating on the shares. The analyst notes that Polaris was able to pull off the "Q4 trifecta," beating the quarter significantly, guiding well ahead of the Street, and leaving plenty of room for quarterly outperformance during the upcoming year. Retail sales re-accelerated from Q3 to Q4, while strong overall margin continues to be the biggest driver of upside in his model, Hardiman contends. The analyst also highlights that guidance crushed expectations and that he sees further opportunity for upside if the company has even a modicum of success on the tariff fron | |
| Positive deliveries guide could be catalyst for Tesla stock, says Credit Suisse | |
| Ahead of Tesla earnings report, Credit Suisse analyst Dan Levy notes that he is ahead of consensus on Q4 EPS and on 2021. A positive guide on 2021 deliveries, combined with commentary that will reinforce the growth narrative, could serve as a positive catalyst for the stock, even despite its robust valuation, Levy contends. He has a Neutral rating with a price target of $800 on the shares | |
| 3M price target lowered to $197 from $208 at Credit Suisse | |
| Credit Suisse analyst John Walsh lowered the firm's price target on 3M to $197 from $208 and keeps an Outperform rating on the shares. Solid Q4 execution and a conservative initial 2021 EPS guidance construct set up 3M for positive earnings revisions in 2021 as vaccine deployment accelerates the economic reopening, the analyst contends. Walsh continues to see a path to 200bps-300bps of margin expansion through 2023, albeit at the lower end of the range | |
| Stamps.com assumed with a Buy at Maxim | |
| Maxim analyst Allen Klee assumed coverage of Stamps.com with a Buy rating and $415 price target. The analyst notes that low cost postage solutions should be a long-term positive trend with online buying, and he sees the company being levered to shipping solutions with best in class offerings. Klee further cites Stamps.com's high profitability and cash rich balance sheet that should support its organic growth and potential M&A | |
| American Express price target lowered to $115 from $120 at Credit Suisse | |
| Credit Suisse analyst Moshe Orenbuch lowered the firm's price target on American Express to $115 from $120 and keeps an Underperform rating on the shares. The analyst notes that while American Express reported Q4 EPS of $1.76, beating his estimate of $1.28 and consensus of $1.30, the beat was primarily driven by negative provision, primarily due to lower loss and reserve release. Orenbuch views the quarter as negative, as profitability weakened | |
| Lockheed Martin price target lowered to $334 from $351 at Credit Suisse | |||
| Credit Suisse analyst Robert Spingarn lowered the firm's price target on Lockheed Martin to $334 from $351 and keeps a Neutral rating on the shares. The analyst notes that Lockheed Martin reported Q4 sales/EPS of $17,032m/$6.38 versus Street of $16,953m/$6.42. It was a largely in-line quarter with few surprises apart from a discretionary pension contribution of $1.0B, Spingarn adds. The analyst points out that 2021 guidance was similarly in-line and unlikely to cause much movement in Street estimates apart from OCF which was raised by $200M | |||
| With GameStop shares trading at $213.50, BofA raises price target to $10 | |
| BofA analyst Curtis Nagle raised the firm's price target on GameStop to $10 from $1.60 and reiterates an Underperform rating on the shares. The stock in premarket trading is up 44%, or $65.52, to $213.50. The shares have risen "spectacularly on what media reports describe as a major short squeeze, in part enabled by extreme retail investor enthusiasm," Nagle tells investors in a research note titled "The gravity of GME's earnings will likely weigh on shares again." The 642% rally since January 12 is despite years of "very weak" performance, including this holiday, says the analyst. He believes enthusiasm over a potential turnaround helped in part by new board member Ryan Cohen "will not be nearly meaningful enough to offset structural pressures that will likely accelerate in this console cycle." Nagle, who remains skeptical on GameStop's potential for a turnaround, admits that the recent share price momentum is likely to provide support in the near-to-medium term. However, he thinks fundamentals "will again factor into valuation" at some point. COVID has helped accelerate GameStop's online sales to 30% of total from under 10%, but a higher mix to online is a negative for earnings, says Nagle. The more business that shifts from in-store transactions, the more difficult it will be for GameStop to sell high margin pre-owned and collectibles merchandise, the analyst contends | |
| Microsoft price target raised to $275 from $260 at Oppenheimer | |
| Oppenheimer analyst Timothy Horan raised the firm's price target on Microsoft to $275 from $260 and keeps an Outperform rating on the shares. The analyst notes that Microsoft reported an "impressive" December quarter driven by increasing cloud demand. Horan believes "we are only in the second inning of adoption" and that cloud-based revenues will soon represent a majority of revenue and support consolidated 10%-plus revenue growth | |
And here is what I am watching: MED, AXNX, NTR, FROG, TNDM, REGN, EVBG, BYND, WB, TEAM, OKTA, TTD, and TWLO.
Let's have a GREAT DAY!
-JB