Futures are pointing slightly green this morning with the S&P set to open .10% up as I write this. Asia markets closed mostly higher overnight while Europe indexes are in the green this morning. The US dollar is lower while Yields, Oil, and Gold are all higher.
Here are the implied moves for earnings this coming week: Some implied moves for earnings next week(Jan 31st. – Feb 4th)
Earnings season ramps up this week. Of all the names reporting, ALGN is the name that catches my eye. It has a history of large moves and think its recent massive pull offers a decent risk/reward to play for some speculative calls. Premiums are high so will be selective on what I add:
$ALGN with earnings after the close on Wednesday… 10.8% implied move
Closes after the last 4 reports:
+4.53%
+8.86%
-1.47%
+12.62% pic.twitter.com/p1orXnMgw7— Option Millionaires (@OMillionaires) January 29, 2022
The S&P closed back above its 200dma on Friday and the Nasdaq posted a monster reversal to end the week in the green. Is the bottom in or is it just a bear flag forming? We will get more clarity this week for sure. A great slide here from Marketwatch on returns after a correction:
The Good news is unless we are headed into a recession, a bear market is unlikely. The bad news is the avg. correction is 15% so could have more to go here. I remain on the cautious side and will be open to put hedges if the SPY fails to hold $440 today:
RIVN staged a 16% reversal on Friday, testing the $50 handle before staging a bounce to close at $57.12. Normal price discovery(sense my sarcasm). RIVN has negligible revenues and a $50+ bil valuation. A name that should see more pressure if the market fails to find a bid. Not sure I will add anything today but will be looking for more put opportunities this week if the market is weak:
SPOT received an upgrade at Citi this morning and also addressed some concerns in regards to artists leaving the platform. Could help put a bid in the name this week with a possible retest of the $200s coming. May look at some calls at the open:
IRTC held the 50dma on Friday, may look to enter calls again here for a move back into the $120-$130s:
Still love my Top 5 stocks and watching APPS for an entry:
And KRNT:
CTXS finally announced its buyout offer of $104... seriously disappointing considering the stock closed at $105.55 on Friday and the stock was trading in the $130s last year. Happy to take that name off my watchlist.
Will be on the audio after the open, stay tuned.
Here are the analyst changes of note for today:
| Chevron selloff on Friday overdone, says Morgan Stanley | |
| Morgan Stanley analyst Devin McDermott said he sees Chevron's (CVX) 4% selloff on Friday as overdone given that its headline Q4 miss was largely due to timing effects and one-time items and that the company's "attractive" free cash flow, "disciplined" investment framework, and "strong" cash returns are all unchanged. While he maintains an Overweight rating and $166 price target on Chevron shares, McDermott retains a preference for Exxon Mobil (XOM), where he sees greater upside to 2022 consensus estimates for earnings and cash flow, the analyst tells investors. Looking ahead to Exxon earnings this week, he expects the company to offer a narrower capex range as well as updates on its debt reduction and cash return outlook. McDermott has an Overweight rating and $95 price target on Exxon share | |
| Boeing price target lowered to $270 from $300 at Jefferies | |
| Jefferies analyst Sheila Kahyaoglu lowered the firm's price target on Boeing to $270 from $300, citing near-term free cash flow outlook, and keeps a Buy rating on the shares. The 787 and 737 MAX continue to be key catalysts, with free cash flow largely tied to deliveries of the two programs, but FAA approval to restart 787 deliveries and China's "long-awaited" recertification of the MAX are outside of Boeing's control, said Kahyaoglu, who argues that an 80% advance for deliveries of 612 in 2022 points to an ability to generate $3.5B and $11.3B of free cash flow in 2022 and 2023, respectively | |
| Scientific Games price target lowered to $61 from $74 at Stifel | |
| Stifel analyst Jeffrey Stantial lowered the firm's price target on Scientific Games (SGMS) to $61 from $74 and keeps a Hold rating on the shares. He is forecasting a Q4 earnings beat, but said his proprietary lottery tracker suggests growth in lottery sales decelerated modestly, though still remaining well-ahead of 2019 adjusted levels. His survey results were "mixed" for Scientific Games, as implied shipments of 3,135-3,325 are about 15% to 20% below consensus, Stantial tells investors in a preview note for the Gaming Tech group. His lower target factors the recent re-rating in SciPlay (SCPL) and a more conservative Digital multiple in light of rising interest rates, the analyst noted | |
| Match Group price target cut to $140 at Jefferies ahead of 'disappointing' Q4 | |
| Jefferies analyst Brent Thill lowered the firm's price target on Match Group to $140 from $175, telling investors that he expects "disappointing" Q4 results and sees short-term risk to Q1 guidance given the unexpected surge in COVID cases and weak third-party user data in the APAC region that makes up 23% of revenue. However, Thill keeps a Buy rating on the shares and said he would view guidance of about 20% revenue growth for FY22 as "enough to support the stock | |
| Roblox price target lowered to $110 from $134 at Stifel | |
| Stifel analyst Drew Crum lowered the firm's price target on Roblox to $110 from $134 and keeps a Buy rating on the shares as he has trimmed his Q4 estimates to reflect more conservatism with December assumptions ahead of the company being expected to report Q4 results in late February. He now forecasts Q4 bookings at $743M, up 16% on both a year-over-year and quarter-over-quarter basis, versus $787M previously | |
| Align Technology upgraded to Buy from Neutral at UBS | |
| UBS analyst Kevin Caliendo upgraded Align Technology to Buy from Neutral with a price target of $620, down from $800. The analyst states that the UBS Evidence Lab data, coupled with channel checks, suggest that the company will beat Q4 consensus estimates by about 4% and also grow revenue by about 22% in 2022. Align Technology may also announce incremental investments, which have historically led to increased growth and returns, Caliendo tells investors in a research note, adding that following a market sell-off, he sees a positive risk-reward set-up on the stock | |
And here is what I am watching today: ALGN, SPOT, IRTC, RIVN, APPS, KRNT, OPRX, CMG, and DRV.
Let's have a great day!
-JB