Investors are pivoting from technology stocks towards value sectors as the Dow approaches new record highs, while the Nasdaq anticipates a softer start. Futures for the S&P 500 remain largely unchanged following the index’s record closure yesterday. The CNBC Investing Club is set to host its December Monthly Meeting livestream exclusively for members at noon ET.
Lululemon Athletica’s quarterly earnings report revealed mixed results. Although the retailer experienced substantial revenue growth, the execution faced challenges, particularly due to tariffs. In a major shakeup, CEO Calvin McDonald announced he would depart at the end of January after over seven years with the brand. Jefferies has since upgraded Lululemon stock from “sell” to “hold,” reflecting market reactions that saw shares rise more than 10% pre-market.
In the tech sector, shares of Broadcom dropped approximately 5% after a quarterly earnings report that was initially thought to be misunderstood. Despite surpassing expectations and raising future guidance, concerns arose from CEO Hock Tan’s comments about potential in-house chip development by customers. Analysts contest this interpretation, qualifying the quarter as strong overall.
Costco’s quarterly results exceeded expectations thanks to increased income from membership fees, improved gross margins, and elevated net sales. However, these figures did not appease Wall Street, causing shares to decline early in trading. Despite the drop, optimism remains for a rebound; the Club has maintained a buy-equivalent rating yet adjusted the price target down to $1,050 from $1,100 due to recent performance.
In another sector, Citi has named Linde, a Club holding, as a top pick following a favorable investor meeting. Despite a 6% decline over the past month, analysts argue that this recent pullback is unwarranted, underlined by Linde’s robust project backlog.
RH, formerly known as Restoration Hardware, showcased its plans to launch an RH Paris store during its post-earnings conference. The luxury furniture retailer reported year-over-year growth in the third quarter, overcoming a challenging U.S. housing market. Nevertheless, earnings per share missed expectations, and revenue guidance fell short, prompting analysts to lower price targets and Stifel to downgrade the stock to a hold.
Meanwhile, Bristol Myers Squibb received an upgrade from Guggenheim, moving from hold to buy ahead of 2026. This change reflects a more attractive valuation and heightened potential from the company’s pipeline. While the stock has improved since dipping in late October, it remains down by 9.5% for the upcoming year.
Fermi shares saw a steep decline of nearly 44% this morning to $8.5 each after announcing that its first tenant terminated a $150 million funding agreement. Co-founded by Republican former Texas Governor Rick Perry, Fermi traded as high as $37 shortly after its October 1 debut, when the IPO was priced at $21.
On another positive note, JPMorgan has raised its price target for Alphabet from $340 to $385, reaffirming its buy rating. The analysts highlight Alphabet as one of their top picks for 2024, alongside Club holdings Amazon, DoorDash, and Spotify.
Ciena, a high-speed connectivity provider, delivered impressive quarterly results, leading to numerous analysts increasing their price targets. Ciena’s stock has surged nearly threefold this year, with Barclays notably raising its target from $138 to $279, while maintaining a buy rating.
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