On Friday, the S&P 500 was anticipated to open lower, but stocks managed to recoup some losses following President Donald Trump’s nomination of Kevin Warsh as the new chair of the Federal Reserve. This appointment is expected to alleviate worries regarding Fed independence, leading to a decline in soaring gold and silver prices. Warsh’s new role presents the challenging task of balancing employment growth with price stability. The morning also revealed that the producer price index for December had risen higher than anticipated, indicating inflationary pressures.
In corporate news, Apple delivered solid earnings, buoyed by strong demand for the iPhone and a robust performance in its services sector. The company reported impressive growth in China, while the Indian market presents future potential. However, there are concerns about a memory shortage that could impact production, which could affect not only Apple but also competitors without subsidies. Nevertheless, Apple’s stock was on track for a significant recovery, breaking an eight-week losing streak.
SanDisk’s shares surged by 22% following impressive quarterly results, marking a remarkable 175% increase year to date. Analysts from Goldman Sachs raised their price target to $700 from $320, while Bernstein significantly upgraded its target to $1,000, citing strong guidance that exceeded expectations.
Wolfe Research upgraded Broadcom to a buy from hold, setting a price target of $400, driven by anticipated growth in revenue from artificial intelligence by 2027. The shift in focus to the company’s tensor processing units signals a positive outlook after a period of underperformance.
Honeywell was also a focus, receiving a price target boost from Barclays, which increased it to $259 from $250, maintaining a buy rating. With the aerospace division’s separation approaching, analysts predict increased scrutiny on the company’s valuation.
Caterpillar attracted multiple price target increases following its strong quarterly performance, particularly the high sales of power generators for data centers. Bank of America raised its target to $735 from $708, reaffirming their buy rating based on a promising future outlook supported by a strong backlog.
In retail news, Goldman Sachs lifted its price target on Gap to $32 from $29, anticipating buoyant results for the holiday quarter despite predicting a difficult beginning to the current quarter due to seasonal weather and consumer confidence issues.
UBS raised Starbucks’ price target to $100 from $94 after the company’s Investor Day, maintaining a hold rating. Analysts expressed cautious optimism about CEO Brian Niccol’s efforts to revitalize the brand but emphasized the need for further improvements before becoming more bullish.
Deckers Outdoor, known for its UGG and Hoka brands, saw its shares jump over 12% in premarket trading after reporting strong quarterly results and raising full-year guidance. Barclays increased its price target to $143 from $113, while Goldman Sachs raised its target less aggressively, to $92 from $81, but maintained a sell rating.
Lastly, Citi analysts viewed the recent downturn in online used car retailer Carvana’s stock as a buying opportunity, despite a recent report from a short-seller that raised concerns about subsidies from a related business. After a 14% drop, the stock rebounded by 4.7%, with analysts expressing skepticism about the allegations and maintaining a $550 price target.
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