On November 10, the S&P 500 was poised for a positive start amid encouraging developments from the Senate, which has moved closer to a deal aimed at ending the ongoing U.S. government shutdown. This proposed agreement could see the government reopening in January and rescinding many of the sweeping federal layoffs that have been a cause for concern in recent weeks. In a previous column, this reopening was highlighted as one of several potential positive influences on the stock market.
In the tech sector, shares of Nvidia rebounded with a rise of more than 3% following a substantial 7% drop last week that saw the company’s market cap dip below the $5 trillion mark. Citi boosted its price target for Nvidia from $210 to $220, citing optimistic forecasts for quarterly sales and forward guidance that surpass analysts’ expectations. The company is scheduled to release its earnings report next week, which may further impact its stock performance.
In semiconductor production, Taiwan Semiconductor Manufacturing Company (TSMC) reported its slowest monthly sales growth in 18 months for October. Despite this, the company remains on track with its targets, although concerns are beginning to surface regarding a potential slowdown in data center demand, alongside questions about the sustainability of the current artificial intelligence boom.
In the pharmaceutical realm, the competitive bidding for Metsera, a developer of obesity drugs, has reached a conclusion. Pfizer, an American pharmaceutical giant, emerged victorious with a $10 billion deal that enables entry into the promising GLP-1 market, traditionally dominated by Novo Nordisk and Eli Lilly. Following this news, Leerink upgraded Eli Lilly’s rating from hold to buy, raising its price target from $886 to $1,104, bolstered by a surge in the adoption of obesity medications due to expanded Medicare and Medicaid coverage linked to a pricing agreement from the Trump administration.
Conversely, negative sentiment is building around Bristol Myers, especially as Piper Sandler reduced its price target from $66 to $64 for the schizophrenia drug maker, raising concerns about future prospects. In a contrasting move, Piper also increased its price target on Illumina to $195, attributing this to better-than-expected earnings and guidance.
Zimmer Biomet faced a downgrade from Canaccord, with its price target lowered from $101 to $93 following disappointing quarterly results. The analysts highlighted management’s decision to tighten guidance as a factor affecting their outlook.
In the gaming and sports betting sector, DraftKings’ recent third-quarter earnings report elicited mixed reactions. Deutsche Bank adjusted its price target downward to $33 from $37, while Stifel also reduced its target from $50 to $46. Despite this, there are positive developments as DraftKings has entered a partnership with ESPN, hinting at potential growth opportunities as more sports betting content becomes available through platforms like Amazon and NBC.
Finally, JPMorgan amended its price targets for major retailers, increasing Walmart’s target while decreasing the targets for Target, Lowe’s, and Home Depot, signaling the challenging landscape for consumer stocks as earnings reports loom for these companies next week.
