Futures are pointing to a higher start to the week, coming off one of the markets best performances in years on Friday... not to mention it was also a huge week that saw the S&P add 6.46%. Asia markets closed higher overnight while Europe stocks are mixed this morning. The US dollar is lower while Oil, Gold, and Yields are higher.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-49/
Markets look to open in the green this morning in a week that will see the end of the first half of the year, which will likely be the worst performing first half in over 50 years. The most watched item this week will be the PCE data coming out on Thursday - that is the Feds preferred gauge of inflation. Will certainly be something to watch and could move markets. Last weekend it was all about crypto, with Bitcoin getting smashed and under $19k. It was hard not to think the market was set to crash last Tuesday if you had read all the fear mongering tweets and headlines. Instead, markets rallied. Not going to sit here and call a bottom, but I do think there is more upside here, maybe to $400 at least, and maybe even $410 on the SPY:
There definitely have been some names that have been thrown out with the bath water... ie. sold off indiscriminately. I like names that have cash, no debt, and some possible tailwinds. TRIP and TZOO are two that fit that bill. I added some Aug TRIP calls on Friday. The company should report earnings the first week of August which should provide a catalyst and think the market would react positively on any turnaround signs from the new CEO. Think this trades into the lows $20s in the coming days and will look to close some of my calls out to cover costs when I get the chance, and hold the rest:
BHC, aka the company formerly known as Valeant, has been working to right its ship for years now. They were extremely debt laden and still had a long ways to go in regards to restoring shareholder confidence, amongst other things. They finally spun off their Bausch & Lomb business which brought in more cash, and on Friday they announced that Joe Papa resigned from their Board... he was one of the last remaining symbols of their previous failures. Sure enough the stock rallied on the news and I think it will continue to move higher in the coming weeks. I added some July calls and will look to close some out to cover costs when I get the chance and ride the rest for $11+:
IBM is looking great again but will need to break and hold the $145 handle:
ROKU closed higher for the 5th session in a row on Friday. Next resistance looks to be at $104. Will be watching for the opportunity to close some of my calls out to cover costs and ride the rest:
MDGL presented some positive data from their Phase 3 study over the weekend. I was looking to add some calls Friday and will be watching again today. If the stock breaks $85 will look for some strikes above that $100 handle:
Still eyeing SPOT, U, and SAGE as well.
Here are the analyst changes of note for today:
|Spirit Airlines price target raised to $28 from $25 at Evercore ISI|
|Evercore ISI analyst Duane Pfennigwerth raised the firm's price target on Spirit Airlines to $28 from $25 and keeps an In Line rating on the shares as he is adjusting estimates for his airline coverage primarily lower on higher assumed refining margins|
|PPG upgraded to Buy from Hold at Vertical Research|
|Vertical Research analyst Kevin McCarthy upgraded PPG to Buy from Hold with a $139 price target, citing what he sees as "compelling value," even on the basis of lower normalized earnings|
Tesla price target lowered to $1,150 from $1,300 at Mizuho
|Mizuho analyst Vijay Rakesh lowered the firm's price target on Tesla to $1,150 from $1,300 and keeps a Buy rating on the shares. The analyst "conservatively lowered" June quarter and second half of 2022 unit delivery estimates to reflect Shanghai shutdowns and supply chain constraints. However, Rakesh sees strong electric vehicle demand despite higher prices, with longer lead times, as production and new models ramp. Despite elevated macro risks, battery electric vehicles could see strong second half of 2022 ramps as China reopens and demand improves, Rakesh tells investors in a research note|
|Merck price target raised to $102 from $95 at Cowen|
|Cowen analyst Boris Peaker raised the firm's price target on Merck to $102 from $95 and keeps a Market Perform rating on the shares. The analyst sees pros and cons of Merck (MRK) buying Seagen (SGEN), but views cons as outweighing pros. He prefers to see Merck seek a less risky acquisition(s) to achieve the diversification investors view as necessary|
|Okta not seeing backlash from security breach, says William Blair|
|William Blair analyst Jonathan Ho has an "incrementally positive view on the story" after hosting investor meetings with Okta (OKTA) CEO Todd McKinnon. The company addressed investor concerns around slowing growth in its workforce business, the Auth0 acquisition, Microsoft (MSFT) competition, and handling of the Lapsus breach, Ho tells investors in a research note. The analyst says Okta is seeing little impact from inflation and the macro environment on its demand or pipeline and has not seen customer backlash from the breach. He believes the company is still in the early stages of penetrating a "very large" market opportunity in the identity access management space. The market continues to grow and Okta has not seen a significant shift in competitors such as Microsoft, contends Ho, who keeps an Outperform rating on the shares|
|William Blair sees 'some likelihood of higher bids' for Zendesk|
|It is not out of the question that a higher takeover bid for Zendesk could still come, especially from other financial sponsors, William Blair analyst Arjun Bhatia tells investors in a research note. The deal multiple of 4.8 times revenue offered by Permira and Hellman & Friedman appears on the low end of the spectrum, especially when considering the fast-growth software group is currently trading at 7.6 times, says the analyst. Bhatia believes "there is still some likelihood of higher bids" and keeps an Outperform rating on Zendesk shares|
|Micron price target lowered to $85 from $115 at BMO Capital|
|BMO Capital analyst Ambrish Srivastava lowered the firm's price target on Micron to $85 from $115 but keeps an Outperform rating on the shares. The analyst says the company's major end markets - from PCs to handsets - are decelerating more than he had expected, though he remains positive on the stock given the risk-reward at current levels of 5-times expected forward earnings. Longer term, Micron should be able to continue to drive higher profitability through cycles, Srivastava tells investors in a research note|
And here is what I am watching today: MDGL, IBM, BPT, NTR, SPOT, U, ROKU, EXPE, and SAGE.
Let's have a great day!