My top 10 things to watch Friday, March 3
1. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq are looking to close out the week on a possible note, building on Thursday’s rally. A slight decline in Treasury yields from multiyear highs is helping stocks Friday. But, watch out for Fed speak galore, with three central bankers giving speeches during market hours.
2. Club holding Costco (COST) was a little disappointing Thursday evening, with an earnings beat overshadowed by some softer February trends. A membership fee increase is still a when, not if, situation. The same goes for a special dividend. Inflation coming down to about 5% to 6% range. The stock drops more than 2% early Friday as the retailer catches some price-target cuts.
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3. JPMorgan upgrades Kroger (KR) to overweight from neutral (buy from hold); downgrades Hormel (HRL) to underweight from neutral (sell from hold).
4. Marvell Technology (MRVL) sinks 9.5%, the morning after revealing it’s still working through some inventory corrections in data center storage and enterprise. That led to a below-expectations guide. Marvell’s time will come, but it’s not there yet. We used to own Marvell, but felt Nvidia (NVDA), Advanced Micro Devices (AMD) and Qualcomm (QCOM) give us enough exposure to semis.
5. Broadcom (AVGO) up modestly after beating on earnings thanks to strength in Networking, Server and Storage, and Broadband businesses. Software was down year over year, but management expects it to rebound. Broadcom guided the current quarter above estimates, prompting many analysts to raise price targets.
6. Club holding Procter and Gamble (PG) catches its second upgrade of the week, this time for JPMorgan which moves to an overweight (buy) rating, with a $155-per-share price target. The analysts put P&G on their Positive Catalyst Watch, with the key event being the company’s fiscal 2023 fourth-quarter and fiscal 2024 results.
7. Eli Lilly (LLY) and Novo named catalyst-driven ideas at Morgan Stanley. The event is Novo’s upcoming obesity Phase 3 Select trial evaluating their weight loss drug Wegovy’s ability to lower the risk of cardiovascular events in people with obesity. Club holding Eli Lilly has a similar weight loss drug under review called Mounjaro, and Morgan Stanley believes what’s good (or bad) for Wegovy will be good (or bad) for Eli Lilly.
8. It must be a day of catalysts because Morgan Stanley raises its Apple (AAPL) price target to $180 per share from $175. Analysts outline five “underappreciated catalysts” that they think will drive a re-rating of the Club holding in the next twelve months.
9. Pioneer Natural Resources (PXD) gets an upgrade at Wells Fargo. The analysts move to equal weight from underweight (hold from sell) after a period of underperformance. But they trim their price target to $220 per share from $225. By the way, PXD’s big $5.58 quarterly base plus variable cash dividend goes ex-dividend Friday.
10. Other big calls of the day: UBS upgrades First Solar (FSLR) to buy, Jefferies upgrades Marathon Petroleum (MPC) to buy, Goldman Sachs goes to no rating on crypto bank Silvergate (SI).
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